Bulgaria, Russia Agree on New Nuclear Project Delay

Business » ENERGY | October 3, 2011, Monday // 07:34| Views: | Comments: 0
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Bulgaria: Bulgaria, Russia Agree on New Nuclear Project Delay A file picture dated September, 2008, showing workers during the construction of the first 1 000 MW unit of the second nuclear plant of Belene, Bulgaria. Photo by EPA/BGNES

Bulgaria and Russia have reached an agreement to extend the negotiations over Belene nuclear project by another six months as of the beginning of October amidst continuing haggling over its price and feasibility.

Bulgaria's National Electric Company NEK and Russia's Atomstroyexport, a subsidiary of Rosatom, signed on September 30 a new annex extending by the end of March 2012 their contract for the construction of two 1,000 megawatt nuclear reactors at Belene, a statement of the Bulgarian state utility said.

The new, fourteenth, annex between the two sides will allow them to take into account the results from the stress tests and the expected developments on the electricity market.

Bulgaria's Economy Minister Traicho Traikov recently commented that the project's consultant HSBC has already come up with its first conclusions, which show that there are ways to make Belene profitable.

Traikov however stressed that the line between "profitable" and "unprofitable" is very thin and a matter of detailed negotiations.

In the middle of July Russia's state nuclear company Atomstroyexport took Bulgaria's NEK to an arbitration court for EUR 58 M over delayed payments for its work on two nuclear reactors.

The next day the Bulgarian company said it is ready to strike back with a EUR 61 M counter claim against Atomstroyexport over delayed payments for purchases of old equipment for the plant, worth about EUR 300 M.

The 12th annex triggered a huge scandal at the beginning of April after the head of the national utility company NEK Krasimir Parvanov signed an agreement with Rosatom's subsidiary Atomstroyexport that potentially threatens Bulgaria's national interests by obliging the Bulgarian government to reach a final agreement with the Russians on Belene by July 1, 2001.

Traikov slammed Parvanov and announced he is going to be fired, but the dismissal was later overturned by Prime Minister Boyko Borisov.

Borisov harshly criticized the Energy Minister's hasty and emotional reaction and threatened him with being kicked out of office.

It turned out that Parvanov has coordinated his actions with Deputy Prime Minister, Simeon Djankov, who oversees finance and economy.

The signed document stirred heated debates in Bulgaria as it came before the two sides agree on the price of the project and conduct safety checks.

Bulgaria and Russia are unable to agree on the major bone of contention - the price for the construction of the 2000-MW Belene NPP.

Russia says the project construction price should be EUR 6.3 B. The Borisov government wants to set the price at as little as EUR 5 B.

After it was first started in the 1980s, the construction of Bulgaria's second nuclear power plant at Belene on the Danube was stopped in the early 1990s over lack of money and environmental protests.

After selecting the Russian company Atomstroyexport, a subsidiary of Rosatom, to build a two 1000-MW reactors at Belene and signing a deal for the construction, allegedly for the price of EUR 3.997 B, with the Russians during Putin's visit to Sofia in January 2008, in September 2008, former Prime Minister Stanishev gave a formal restart of the building of Belene. At the end of 2008, German energy giant RWE was selected as a strategic foreign investor for the plant.

The Belene NPP was de facto frozen in the fall of 2009 when the previously selected strategic investor, the German company RWE, which was supposed to provide EUR 2 B in exchange for a 49% stake, pulled out.

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Tags: HSBC, Russian, Russia, National Electric Company, NEK, Djankov, Simeon, Parvanov, Krasimir, project, plant, power, Russia, Bulgaria, Belene, Moscow, sofia, Belene NPP, Nuclear Power Plant, NPP, Kozloduy NPP, Traikov, Traicho, Rosatom, Atomstroyexport, nuclear, reactor, safety, Japan, Earthquake, tsunami, Fukushima, EU, emergency meeting, Kozloduy, Prime Minister, Borisov, Boyko, Bulgarian Energy Holding, Russians, BEH, Sergey, Kirienko
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