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SOFIA, April 8 (Reuters) - U.S. power companies AES and ContourGlobal agreed to cut the price of electricity they sell to Bulgaria's public power provider NEK on Wednesday, in exchange for NEK making about 700 million levs ($389 million) in late payments by July.
The deals could boost Prime Minister Boiko Borisov's government, as the Balkan country has been struggling to keep politically sensitive electricity costs at bay and cut the huge deficits in its inefficient energy sector.
High electricity prices sparked protests that toppled Borisov's previous government in February 2013.
AES and ContourGlobal sell electricity to state-owned NEK under 15-year contracts, and the energy minister said at a press conference in Sofia that the new deals would slash capacity payments, part of the overall price, by a total of 30 percent.
"This is our contribution for the government's efforts to stabilise the energy sector," said Julian Nebreda, AES Corp.'s President for Europe, Middle East and East Africa.
The cut of the capacity payments for AES's Bulgarian's 670 megawatt (MW) coal-fired plant is about 14 percent, and for ContourGlobal's 908 MW generator it is about 17 percent, Energy Minister Temenuzhka Petkova told reporters after the signing.
The two long-term power contracts, which expire in 2024 for ContourGlobal and in 2026 for AES, will not be extended, and the new arrangements will save about 1 billion levs for debt-ridden NEK.
The two firms' coal-fired plants, both situated in the coal-mining Maritsa East complex in southeast Bulgaria, produce about 25 percent of the country's power.
"The agreement is good for Bulgaria. It is a good compromise," said Garry Levesley, ContourGlobal's executive vice president.
($1 = 1.7984 leva) (Reporting by Tsvetelia Tsolova; Editing by Matthias Williams and Mark Potter)