Chinese investors eye property, airport and a lead mine in Bulgaria

Chinese companies are considering investments in luxury property developments, an airport and a metals mine in Bulgaria that could amount to more than 2 billion euros ($2.2 bln) in total, an advisor to the projects said on Monday.

Bulgaria, the EU's poorest country, badly needs to boost foreign direct investment which has dropped significantly to about 1-1.6 billion euros a year after the global financial crisis in 2008-09 put an end to a construction and real estate boom.

The Balkan country is yet to take advantage of China's plans to expand its presence in central and eastern Europe under its "One Belt, One Road" strategy to carve out new export markets between Asia and Europe as its domestic economy slows.

To attract Chinese capital, Bulgaria needs to structure projects worth over 100 million euros that can be launched within a year, Ilian Scarlatov, a managing partner at Sofia-based financial advisory Mane Capital said.

"Chinese are here not because we made an effort, but because they have a long-term strategic thinking and see value in the geopolitical situation of Bulgaria and the region," Scarlatov said in an interview at Reuters office in Sofia for the Reuters Eastern Europe Investment Summit.

"They would like to see feasible, large-scale business projects that can be started within 6 to 12 months and which do not hold political or administrative risk."

A group of Chinese and Hong Kong investors is buying land for a large entertainment complex near the capital Sofia, to be called St Sofia, which they announced two years ago with an estimated investment of 1.5 billion euros. Scarlatov, an advisor to the venture, said he expected construction to start next year.

A Bulgarian-registered company has issued warrants on the Bulgarian stock market to raise funds for the project, which will comprise a 2,000-room hotel, a large aqua park, an exhibition centre and an arena 20 kilometres east of Sofia.

One private and one state-owned Chinese company are considering investing 100 million euros to transform a private airport, 60 km southwest of Sofia, into an international cargo hub, Scarlatov said. An additional 100 million may be invested at a later stage to build a new terminal, a railroad link and a cargo zone. He expected the deal to be sealed by the end of this year and declined to name the prospective investors until then.

Several private Chinese investors have also signed a memorandum of understanding to redevelop an idle lead and zinc mine in southwestern Bulgaria with total ore reserves of 87 million tonnes. Scarlatov said he expected the deal to be finalised by the end of this year.

Separately, several Chinese companies are considering spending 200 million euros to building luxury hotels, a 100-berth marina port and a casino in the Thracian Cliffs golf resort on the Black Sea, he said.

Chinese investment in Bulgaria is currently less than 100 million euros and mainly in agricultural and light industry ventures.

Earlier this year, Bank of China joined a consortium of banks that lent 535 million euros to Bulgaria's state energy holding company BEH - a move seen by analysts as sign that China was ready to fund energy and infrastructure projects.

$1 = 0.8981 euros