Czech energy giant CEZ has started a procedure to exit the project for the expansion of Romania's nuclear power plant Cernavoda.

In a statement released Wednesday, the company said it signed an agreement allowing it to sell its 9.15% stake in the joint venture for building two more reactors at Cernavoda in addition to the two that are already in operation.

The move is said to be in accordance with the company's strategy to consolidate its foreign assets, and to focus on domestic investments. In Bulgaria, CEZ owns one of the country's three power utilities; CEZ Bulgaria is the electricity distribution company in the Western and North-central part of the country.

The news that CEZ plans to quit the Cernavoda NPP altogether was first reported by the Romanian agency Mediafax shortly before the company statement. It cited CEZ Romania's corporate affairs manager Adrian Borotea as saying that the Czech company will be seeking low-risk investments in the region.

The Romanian state holds a 51% stake in EnergoNuclear, the joint company that will build two new units at Cernavoda on the Danube River, which already has two 706 MW reactors that produce about 18% of Romania's electricity.

The other shareholders in EnergoNuclear are Belgium's Electrabel, Italy's Enel, Spain's Iberdrola, a local unit of ArcelorMittal, and Germany's RWE. With CEZ's decision to back out of the project, its 9.15% stake will be up for grabs by some of the other shareholders in the joint venture.

CEZ with market capitalisation of USD 24 B is planning to build two new units at its Temelin nuclear power plant in the Czech Republic, and up to three other units at its Czech Dukovany nuclear plant and Slovakia. Those are estimated to be worth about USD 27 B.

The second operational reactor at Romania's NPP Cernavoda was launched in 2007; the two existing reactors are Canadian-made. The investment into the two new reactors is estimated to cost about EUR 4 B.

In Bulgaria, the Romanian Cernavoda NPP has often been seen as a competitor to the project for the second Bulgarian nuclear power plant at the town of Belene on the Danube. The Belene NPP has been planned to have at least two Russian 1000 MW reactors at first.

The project for its construction stalled over the past year as the new center-right government of PM Borisov revised the estimates for its cost from EUR 4 B to up to EUR 10 B because of the economic crisis.

The Borisov Cabinet has made it clear that it is going to construct the Belene NPP only if it finds a "strategic European investor". The originally selected strategic foreign investor, the German company RWE, which also has a stake at Romania's Cernavoda NPP, backed out of the Belene project in the fall of 2009. It was supposed to invest some EUR 2 B in exchange for a 49% stake in the future plant.

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