Listening to 35-year-old Elina Ivanova, one begins to wonder what beetles got into her head to decide in 2018 to leave Düsseldorf, where she and her husband work in the new technology sector, and move with her two children to her hometown of Pernik in western Bulgaria. This working-class city is certainly not the most attractive place in the country – a former flagship of the ferrous metallurgy under the communist regime, today’s Pernik is an industrial wasteland under the open sky. It’s an ideal setting for a novel or a dystopian film, but it’s hard to imagine it as a place to raise children… Besides, there’s often no water in Pernik; the artificial dam supplying the city is regularly drained by the only two companies to survive after the fall of the regime in 1989, the Steel Factory and the coal-fired Republic Thermal Power Plant, whose smokestacks rise at the entrance to the city. The TPP is also the source of another chronic and much more serious problem – air pollution. “Some days it is literally hard to breathe. One morning I nearly suffocated in the car after dropping the kids off at kindergarten. It was long before Kovid-19…,” says Elina Ivanova. And she describes “a yellow-brown cloud that can be cut with a knife and tastes of Bakelite and burnt plastic” that regularly descends over the city from the power plant. Shortly after their return from Germany, her two daughters, aged four and five, began regularly falling ill with colds, sinusitis and other bronchitis. Sometimes they also had anaemia. Elina’s daughters are not the only children in Pernik who suffer from such illnesses. According to local doctors, these are “allergies,” only these respiratory ailments stop completely when the family goes on vacation outside of Pernik.
Elina has repeatedly contacted the institutions responsible for air pollution, she has written to the town hall, she has requested information directly from TPP “Republic”, and all this to no avail. “I was told that everything is fine. Then they started to ignore me.” So in that same year, 2018, she decided to create the association “Breathe, Pernik” together with other residents of the city. “We are victims of complex pollution,” Elina explains, “as the burnt coal is added to biomass, animal carcasses and household waste. The latter, when poorly sorted, can be particularly toxic.”
Pernicians are not the only people in Bulgaria who suffer from such “complex pollution” mainly due to improper burning of household and other waste. Even further west of Pernik, garbage is also burned in the large TPP “Bobov Dol”, with the fine particles polluting the air as far as Sofia and the Greek border. In the southern part of the country, in the Stara Zagora mining basin, lies the giant Maritsa-East complex. It emits thick black smoke that is visible for hundreds of miles around. Waste is also burned in power plants that supply hot water and heating to a number of “When you open the window in the morning, you can immediately smell that peculiar smell of a burnt garbage bin, only this burning is on an industrial scale,” says Georgi Balulov, an eco-activist from Sliven in central Bulgaria. “When we protest, we are told: ‘Do you want an increase in the price of heating?'” he says. “These power plants have always polluted. But at least during communism we knew what was burned there – coal,” says Elina from Pernik. ”Whereas today we don’t know if it’s plastic, household waste, medical or other hazardous materials,” she says. A resident of Bobov Dol showed us a photo of his car taken early this morning. The car is covered in ash, and he has written three letters on it with his finger – SOS. Stefan Nikolov, a young municipal councillor from the opposition in Galabovo, a town of about 10,000 inhabitants located near Maritsa-East, spoke of “genocide” because of the carcinogenic particles released into the atmosphere by the Brickel thermal power plant and the adjacent coal briquette factory.
The practice of burning garbage in these old thermal power plants, formerly state-owned but now mostly privatised, is a scourge for Bulgaria. The first contracts with Italian companies to import garbage date back to 2014, and the country is even becoming a sort of El Dorado for waste from rich European Union (EU) countries. Some of this waste is burned in old thermal power plants without any pollution control, others are burned in cement plants which are much better suited for this type of operation because they can develop very high temperatures allowing the complete combustion of the waste, and a third and quite significant part seems to be simply “stored” here and there in nature. Authorities only took an interest in the problem at the end of 2019, when Italian carabinieri seized some 850 tonnes of toxic waste from a freight train bound for Bulgaria. Several investigations have been launched, hundreds of tons of waste have been seized and incineration permits have been suspended, the economic police, the judiciary and even intelligence have been mobilized to clarify the activities of the many (over a thousand) companies in the country specializing in waste treatment. Deputy Environment Minister Krassimir Zhivkov was arrested in early 2020 for inaction on illegal waste imports from Italy. It has also been found that his ministry has allowed the Bobov Dol power plant to “experimentally” burn up to 10,000 times more waste than the law allows, and that much of the Italian garbage is imported from companies linked to the southern Italian mafia and its Ndrangheta and Camorra organisations.
“Since the 1980s , the Ndrangheta has been trafficking toxic waste,” explains Italian university professor Antonio Nicasso, a specialist in organized crime. Earlier the directions were to Southern Italy, then to Africa, and now increasingly to countries like Bulgaria in Eastern Europe. In this business, there is a lot to gain and little to risk.”
Almost a year later, except for the deputy minister who is still behind bars, things have not changed much. Large quantities of waste are still stored at the sites in Bobov Dol, Sliven and Galabovo and are to be incinerated. They are often in a sorry state, damp and patchy. “This usually happens at night or on weekends when the institutions that are supposed to look after air quality are not working. When we warn them, they tell us that everything is normal,” says Stefan Nikolov from Galabovo. An employee at the Bobov Dol site, which is the main destination for the “Italian waste”, confirms this practice on condition of anonymity, explaining that the garbage is an integral part of the “energy mix” (waste, hay and coal) used to fire the furnaces. “Like almost everywhere in Bulgaria, we use lignite coal, low-quality coal with very low calorific value. Waste and what is called ‘biomass’ increase their efficiency,” he says. This is not at all the waste treatment procedure that the EU recommends (however, waste can circulate freely from one country to another within the Union). According to European directives, they must be burned at a very high temperature in suitable installations with fine particle filters. After the revelations last year, the court initially ordered the termination of this practice in Bobov Dol, but then, to the great disappointment of environmentalists and local residents, reconsidered its decision after it was appealed. Afterwards, the plant management explained that in the interest of peace, it would temporarily stop burning waste. A similar decision was taken by the management of Brickel in Galabovo, which even invited representatives of civil society to participate in a “broad debate” on the future of cogeneration. But in mid-November 2020, it became obvious that neither of them kept their promise. Mountains of waste hidden behind haystacks were discovered at a storage site in Galabovo near the briquette factory, and our presence there prompted the immediate appearance of a group of highly nervous and lunging guards.
All these storage sites, TPPs and factories have something in common. They belong to the same energy tycoon, who is considered one of the richest people in Bulgaria – Hristo Kovachki. Kovachki heads an empire that, according to the Sofia business weekly Capital, is valued at 1.5 billion leva. His name is even mentioned in neighbouring Serbia, where in the early 2000s he acquired several local companies before being ordered to return 12 million euros to the Serbian Privatisation Agency, after which he was expelled from the country.
In Bulgaria he is credited with dozens of power plants, coal mines, various factories and until recently a chain of supermarkets where his employees could spend the “vouchers” they received in lieu of salary. In 2007, the oligarch was mentioned in a US diplomatic cable dedicated to the “energy mafia” together with two other Bulgarians linked to the energy sector – Bogomil Manchev and Krasimir Georgiev. Described at the time as a “new player” in this particularly lucrative sector (thanks to its nuclear power plant on the Danube and the Maritsa East complex, Bulgaria is the leading energy exporter in the Balkans), Hristo Kovachki then seemed to have succeeded in establishing himself on the local market.
Several rumours circulate about the origins of his wealth, for example that he made his “first million” from selling necessities in Russia, where he studied after the collapse of the USSR. Others, such as former US embassy diplomat Alex Karagiannis, openly claim that he probably benefited from the successful business of Bulgarian drug lord Konstantin Dimitrov – Samokovets, who was born in Samokov, Kovachki’s hometown.
Others believe that Kovatchky benefits from unlimited bank loans thanks to his ties with Ivaylo Mutafchiiski, one of the owners of First Investment Bank (FIB), identified by another American diplomat, former ambassador to Sofia John Byerly, as “rotten apple” along with six other Bulgarian banks for their alleged links to organised crime and suspected money laundering.
After the appearance of his name in the Italian waste scandal, Hristo Kovachki limited himself to explaining that he was not the owner but a simple “consultant” of all these companies and that he did not import waste from Italy. Then we decided to inquire about the actual owners of all the sites we visited, including Bobov Dol and Brickel in Galabovo. They hide behind hollow companies, mostly offshore, which is a mockery of the Bulgarian anti-money laundering law because it requires declaration of the ultimate economic beneficiaries. According to official documents submitted to the Sofia Commercial Register, the power plant in Bobov Dol belongs to a certain Erlin May Rodriguez, who lives in Belize.
The official owner of the Brickel TPP in Galabovo turns out to be an 81-year-old British man who lives in Yorkshire. Probably both of them are fronts. We will have to wait for the next Panama Papers to get evidence to the contrary. Or legal action, if the implicit immunity of Hristo Kovachki falls after a political change at the top of the Bulgarian state.
More digging into Bulgarian commercial registers is needed to trace Kovachki’s ties with numerous players in the energy sector, mining companies, supermarkets and political parties. The same names are always popping up around him, whether it’s in companies he used to own or in ones he now claims to just consult for, like those of
. Men and women with no history, such as
secretary of Kovatchki, manager of a large electricity distribution company that trades in the output of the power plants Kovatchki “consults”. It turns out that she also leads the correspondence of the company Trash Universe, which officially has nothing to do with her or with Kovatchky, reveals the investigative website Bivol. It is this company that buys, mostly from Italy, the waste that is burned in the energy tycoon’s power plants.
At the same time, the Italian companies with which Kovacic allegedly works have
with the local justice system. These are the companies Eco Valsabbia and Ecoexport of Sergio Gozza, who has spent months behind bars in Italy on charges of falsifying documents for waste produced by his companies. His trial, however, became mired in Italian bureaucracy and he never received a conviction. In Bulgaria, the investigative journalism website Bivol untangled the story long before the prosecution investigated the case.
But why would an energy tycoon like Hristo Kovachki get involved in the household waste business? According to local experts, this is a particularly lucrative scheme that allows Kovatchki to profit from recycling waste (around 100-120 euros per ton), to save on carbon dioxide emission allowances from the power plants where garbage is burned (according to the EU, waste incineration is still exempt from allowances), to save coal, while continuing to sell on the market energy defined as “clean” because it is obtained through “cogeneration” and which benefits from state subsidies. Instead, consumers not only pay a high price for this energy, but also breathe air polluted by the burning of waste. Stefan Nikolov showed us the heating invoices of the local municipal hospital in Galabovo. Since 2008, Brickel has invoiced BGN 1.2 million despite promises to supply free heating to this establishment.
In Bulgaria, Hristo Kovachki seems untouchable thanks to all these strings, hollow companies and front men. He is just a simple “consultant” to the offending companies. Kovacic is very discreet, does not flaunt his wealth and very rarely gives interviews to the media, but he is still a very powerful man with serious opportunities to influence local politicians, which he uses to impose his pawns. Even the woman next to the all-powerful Prosecutor General Ivan Geshev serves as a lawyer for a company owned by Kovacic, discovered the BRRD.
“Here we are, in the heart of the Kovachki energy empire. It looks like Mordor, doesn’t it?” says Stefan Nikolov, a rebel municipal councillor from Galabovo, during our visit. He shows us the briquette factory, which looks like it was built at the beginning of the last century, “the only one of its size in the Balkans”, and the thermal power plant, whose black smoke descends like a curtain over the dusk. He also shows us the pile of ashes he collects every morning while wiping his garden table. He is 31 years old, has a small child and a wife who cannot find a job in Galabovo because of his positions. He and two other colleagues from the municipal council, a teacher and a freelance woman, are the only ones who dare to stand up against the mayor, who, according to Nikolov, is “Kovachki’s feeder”. “Ultimately, this is about total feudalism,” he says. It does not seem to be a coincidence that the mayor Nikolay Tonev is from the MRF, a party with strong influence representing the Bulgarian Turks and Muslims, although they are not numerous in Galabovo. Tonev is a fifth-term mayor. A promotional clip for his 2015 election campaign even shows the “businessman” Kovacicki praising the mayoral candidate, stressing that the city manager is working well and “hand in hand” with his pre-drinks. Georgi Balulov from Sliven says that when he complained to the mayor’s office about the poor air quality, the answer was that it was because of the ghetto, where the Roma burn garbage bins and heat themselves with low-quality coal. “We are struggling with a feudal model,” says Elina Ivanova from Pernik, who, despite the frequent lack of water and the bad air poisoning her daughters, ultimately does not regret having returned to Bulgaria. Besides a great job in the office of a multinational computer software company in Sofia, the fact that she has found a “cause” to fight for is even more important to her.
Alexander Levy with the collaboration of Atanas Chobanov and Dimitar Stoyanov (BRRD, BIRD)
PS. We sent a list of questions to Hristo Kovatcki and to the management of the companies related to him. We have not received an official response at the time of publication of this investigation.
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