Russia Still Interested in Belene NPP, Medvedev Tells Plevneliev at ASEM Summit

Russia is still interested in the construction of the Belene Nuclear Power Plant in Bulgaria, Russian Prime Minister Dmitry Medvedev has told Bulgarian President Rosen Plevneliev in the capital of Laos, Vientiane.

Russian Prime Minister Dmitry Medvedev and Bulgarian President Rosen Plevneliev discussed on Monday the implementation of the Belene nuclear power plant project with Russian participation, Deputy Prime Minister Arkady Dvorkovich said, as cited by RIA Novosti.

Medvedev and Plevneliev med in Vientiane on Monday as part of the Asia-Europe Meeting (ASEM - 9) summit, taking place Monday and Tuesday in Laos.

"This [nuclear energy] was discussed, in particular, in the course of an informal meeting with the president of Bulgaria where nuclear projects are a subject of controversy," Dvorkovich said, adding, "Nevertheless, the discussion is ongoing and we are still interested in the project."

Bulgaria's center-right Citizens for European Development of Bulgaria, GERB, government scrapped the Belene project in March 2012, declaring it economically unfeasible. The pro-Belene Bulgarian Socialist Party, BSP, then launched a petition for a referendum on the Russian-Bulgarian project. The referendum will take place on January 27, 2013.

Discussions renewed recently on the abandoned project, with Rosatom subsidiary Atomstroyexport upping its claim against Bulgaria's National Electricity Co. to EUR 1 B and a mysterious investment fund emerging with an offer to take over the project. Bulgaria's right-leaning Blue Coalition has challenged the legality of such a referendum.

Rosatom recently said it was open for an out-of-court settlement of the arbitration suit.

In the middle of July 2012, 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.

Three months later, on September 11, Rosatom Corp., Russia's state-run nuclear company, increased a claim against Bulgaria's National Electricity Co. from EUR 58 M to EUR 1 B.

Atomstroyexport, a unit of Rosatom, said it increased its claim filed with the International Court of Arbitration in Paris in 2011 to cover construction work and production costs of the two canceled nuclear reactors.

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 has been de facto frozen since 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.

Shortly afterwards BNP Paribas SA, France's largest bank by market value, who was hired by the previous Socialist government to help fund the construction of Belene, ditched the project in February 2010.

RWE's departure from Bulgaria's new Belene nuclear plant put extra pressure on the new center-right government to find new shareholders while it redefines the scope of investment it needs.

NEK initially held a 51% stake in the scheme and Borisov's government planned to cut its shares in the project to 20-30%, which will still allow the country to keep its blocking quota.