Russia Grants Bulgaria Belene NPP Loan without State Guarantee

Business » ENERGY | February 19, 2010, Friday // 14:08| Views: | Comments: 5
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Bulgaria: Russia Grants Bulgaria Belene NPP Loan without State Guarantee Bulgaria's Economy and Energy Minister Traikov (left) together with the Russian Energy Minister Shmatko in Sofia, Friday, Feb. 19, 2010. Photo by BGNES

Russia is going to grant Bulgaria a loan for the construction of the Belene Nuclear Power Plant, Energy Minister Traikov announced after meeting his Russian counterpart Shmatko.

Bulgaria’s Minister of Economy, Energy, and Tourism, Traicho Traikov, met with Russian Energy Minister Sergei Shmatko and the CEO of the Russian state company Rosatom in Sofia over the Bulgarian request for a EUR 2 B loan from Rosatom for the construction of the Belene NPP.

Traikov announced after the meeting that the Russian loan will be granted to Bulgaria without any corporate or state guarantees. The aim of the loan is to proceed with the construction phase of the project even though a strategic foreign investor has not been selected yet as the German company RWE withdrew in the fall of 2009.

RWE was supposed to provide some EUR 2 B in funding in exchange for a 49% share, whereas Bulgaria’s National Electric Company NEK kept a 51% share.

We are absolutely sure in the profitability of the Belene Nuclear Plant project, and we confirm our certainty by investing our funds in it,” the CEO of Rosatom, Sergei Kiriyenko declared after the meeting.

“I can confirm that the Belene project is economically feasible. That is why, the major issue before us is how to make the construction of the nuclear plant happen as quickly as possible. Today’s meeting has confirmed that we have the same understanding for the development of the project and the solving of the existing problems,” Kiriyenko said.

He praised the Bulgarian government for selecting the same day to announce the tender for selecting a financial consultant to help it pick a strategic investor in the Belene NPP.

“We are certain that this is the right way to go, the problem is that this way takes about 1,5-2 years. We believe that the construction site at Belene must not be abandoned in the meantime. First, because the equipment has already been produced. Second, because the construction site would have to be conserved and then reopened again in two years,” the Rosatom CEO stated.

According to Kiriyenko, the Russian company constructing Belene, Atomstroyexport, will be assigning up to 40% of its tasks to Bulgarian subcontractors, which will be important for the Bulgarian economy. “It is not of minor importance that today the Belene NPP is the only nuclear power plant under construction in this part of Europe,” he stressed.

“That is why, we are ready to get involved and to provide the funding needed for the period when the Bulgarian government will be seeking a strategic investor. We are ready to provide the necessary funds within a very short time. And we really do not need, as Minister Traikov correctly stated, the guarantee of the Bulgarian government. We are totally convinced of the competitiveness and profitability of the Belene Project,” said the Rosatom CEO only hours after Bulgaria’s Finance Minister Simeon Djankov made it clear the government would not provide state guarantees for any loan the Russian might grant for Belene.

Kiriyenko emphasized that the Russian state company was ready to provide the money for construction “on a temporary basis”, with the understanding that whenever the Bulgarian government selects a strategic investor, it is going to pay back the money the Russians would have invested.

The CEO of Rosatom also expressed the readiness of the Russian government to become a shareholder of the future Belene Nuclear Power Plant.

“To the extent that the Bulgarian government deems appropriate, we are ready to become shareholders of Belene, if that is necessary,” Kiriyenko said.

He made it clear that during their meeting, the two Ministers Traikov and Shmatko had discussed the financial and legal instruments through which the Russian loan could be granted.

They have agreed to complete the technical issues by the end of March 2010, and to continue with the “practical activities” immediately after that.

"I would like to emphasize that Russia and Bulgaria are consistently realizing their ideology of pragmatic cooperation between our countries in the energy field. This is the ideology that we created six months ago, and I am very glad that we have started to realize all agreements we made during the sessions of the bilateral commission at the end of last year,” Russian Energy Minister Sergei Shmatko said.

In his words, the experts of both Bulgaria and Russia executed a lot of work over the last six months in order to be able to forge a uniform approach allowing both the Bulgarian government as the contracting authority, and the Russian side as the contractor to figure out what exactly is needed to complete successfully the construction of the Belene NPP.

After the RWE company pulled out and the estimated cost of the Belene plant rose from EUR 4 B to EUR 10-12 B, the Bulgarian government has started considering reducing its stake in the future plant from 51% to as little as 20%. In addition to a strategic investor to be selected, the Russian government might also become a shareholder of Belene.

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Tags: Belene, Belene NPP, Nuclear Power Plant, Rosatom, Russia, Sergei Shmatko, Traicho Traikov
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» To the forumComments (5)
#5
DrFaust - 21 Feb 2010 // 17:07:21

"No one will invest in Bulgaria for the same reason no one will invest in Somalia--weak government, no laws, no justice, rampant piracy and crime."

That's a bit exaggerated. There is considerable foreign investment in Bulgaria, but indeed it is less per capita than in any other EC member state, and this has a lot to do with the investment climate in Bulgaria.

Instead of building dozens of nuclear reactors, what about improving the investment climate? That would be much more safe and efficient.

#4
DP - 19 Feb 2010 // 21:12:32

"We had a huge discussion the other day with you and your anarchist (schizophrenic) friend DP when you were bitching against the government of any sort."

No, Gosho, “we” didn't have any discussion about the role of the government. I did not participate in your discussion with Nellie.

You completely lost your composure and became very abusive verbally towards me calling me bitch countless times in one post. Now you switched to calling me anarchist and schizophrenic for no reason at all. You are just proving what a low life you are. A jerk.

Schizophrenia is a mental disease and you should show some sensitivity towards its victims. It is not an insult to me but to all the people that suffer the condition. As far as anarchists go, be my guest...It is downright silly...

So, take it easy. Prestani da se izlagash....

#3
George Zheliazkov - 19 Feb 2010 // 20:45:41

Nella,

“No one will invest in Bulgaria for the same reason no one will invest in Somalia--weak government, no laws, no justice, rampant piracy and crime.”

I’m glad you are finally learning something Nella, the key word here is GOVERNMENT.
We had a huge discussion the other day with you and your anarchist (schizophrenic) friend DP when you were bitching against the government of any sort.

About Bulgaria and all of the Balkans you are HIGHLY exaggerating of course, Bulgaria is NOT Somalia it never was and will never be. Bulgaria at the moment happens to be the most stable financially country on the Balkans.

The problem of Europe and ESPECIALY Western Europe is the snobbish nationalistic animosities, which historically was and still happens to be the main EU problem.

Europe and the whole of Eurasia have the best positioning in the world based on riches, talent pool, labor force etc.

ALL THEY HAVE TO DO IS COLLABORATE!

#2
NellieotAmerica - 19 Feb 2010 // 19:43:13

George

" Bulgaria and the whole Balkans historically wouldn’t be in such a mess if there were any major western investors interested. And this believe me will stay that way forever. "

No one will invest in Bulgaria for the same reason no one will invest in Somalia--weak government, no laws, no justice, rampant piracy and crime.

And that's as it should be. No investors should be swindled into investing in Bulgaria while Bulgarians are criminals, embezzlers, swindlers, pimps, drug traffikers, and drug smugglers. With help from the Bulgarian judiciary and the highest government bureaucrats, I might add.

#1
George Zheliazkov - 19 Feb 2010 // 15:54:31

Traikov,


A friend in need is a friend indeed!

Traikov, where are your investors?

You will learn, it may take you some time but you’ll learn! Bulgaria and the whole Balkans historically wouldn’t be in such a mess if there were any major western investors interested. And this believe me will stay that way forever.

Western Europe and the US is pretty much just cheap talk when it comes to the Balkans and I would never expect any MAJOR investments from any of them.

My advise to all Balkan countries which will need lots of new power capacities for the extremely competitive global markets is:

Build more nuclear power plants! Just make it possible regardless of who is financing it!

Here few helpful hints :-)

http://en.rian.ru/infographics/20100219/157941323.html

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