The Maritza East II plant is one of the largest emitters in the Balkans of the harmful gas which causes acid rain which harms vegetation and water.

EBRD's 11-year loan brings the bank's total investment in the Maritza East power-generation complex to 187 million euros, introducing gas-reduction technology into former "number one sulphur dioxide 'hotspot' in Europe," EBRD said in a statement.

Maritza East II, an independent joint-stock company owned by the Bulgarian government generates approximately 50 percent of Bulgaria's electricity.

The company has pledged to provide 10.1 million euros for the project for building gas purification plants.

A complementary 36.2 million euros comes as a grant from the European Union's pre-accession programme ISPA which supports environmental investments.

The EBRD project supports Bulgaria's efforts to meet European Union environmental standards, a precondition for EU membership which the country hopes to attain in 2007.