Bulgaria Secures German Investor for Belene Nuclear Plant

Business » ENERGY | October 24, 2010, Sunday // 15:51| Views: | Comments: 4
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Bulgaria: Bulgaria Secures German Investor for Belene Nuclear Plant Bulgarian Parliament Chair Tsacheva has made promising hints about the fate of the Belene nuclear power plant. Photo by BGNES

Bulgarian will for sure build its second nuclear power plant at Belene, Parliament Chair Tsetska Tsacheva has declared.

After Bulgaria's government of the center-right GERB party has been going back and forth for months on whether the Belene Nuclear Power Plant will be constructed, in the past couple of days both Prime Minister Borisov and Economy Minister Traikov made hints in favor of the nuke.

On Sunday, however, Parliament Chair Tsacheva made more definitive statements.

"After the visit of Prime Minister Borisov to the Free State of Bavaria, we now have more specifics about the availability of a strategic European investor from Germany," Tsacheva stated in Gorni Dabnik, Pleven District, during the celebrations of the 133 years since a Liberation War battle that took place there.

"For the Bulgarian government, it was extremely important to secure the participation of a strategic European investor. We now almost certainly found one," she said.

Tsacheva also revealed that the question about an European investor for the Bulgarian NPP Belene on the Danube was "discussed very seriously" at the dinner that Borisov and German Chancellor Merkel had during the latter's recent visit to Sofia.

"I declare that the Belene project will be realized for certain!" Tsacheva told the people in Gorni Dabnik.

"The thing that is important to know about the Belene NPP is that it will substantially cheaper in comparison with the plans of the previous Bulgarian government," she went on further without clarifying her words, which seem perplexing given that the Borisov government revised the estimates of the previous government of Sergey Stanishev, and came up with twice higher figures.

The Parliament Chair also said the negotiations between the governments of Bulgaria and Russia for the construction of the Belene nuke are in a very advanced phase.

Bulgaria started building its second nuclear power plant at Belene on the Danube in the late 1980s but after the fall of the communist regime in 1989 environmental protests led to the freezing of the project. It was technically unfrozen by the Stanishev government in 2008, which made a deal with Russian state company Atomstroyexport for the construciton of two 1000 MW VVER reactors at Belene for an estimated price of EUR 3.997 B.

Bulgaria's state National Electric Company NEK was supposed to have a stake of 51% in the future plant, and the German company RWE was picked as a strategic investor with a 49% stake in exchange for providing EUR 2 B for the construction.

As the Borisov government took over in the summer of 2009, it said the plant could cost as much as EUR 10 B, and for months was hesitant about whether to even consider the project. PM Borisov claimed the former government used the project to drain funds from the state budget saying that about BGN 1 B had already been squandered on it so far without building anything.

A further blow was the decision of RWE to withdraw in the fall of 2009. Russia offered several times state-guaranteed loans for the construction of Belene of EUR 2-4 B but both Stanishev and Borisov refused those.

Since the spring the Borisov government came up with the position that the Belene NPP will be built only on the condition that the Cabinet finds a "strategic" European investor. The government has made it clear that the state company NEK did not necessarily have to keep a majority stake in the plant, and could settle, for example, for 20%.

The Russian state-owned company Rosatom, the parent of Atomstroyexport, at times has floated the idea of acquiring itself a stake in the future Bulgarian NPP but that has not been taken up by Borisov's team.

In September, China's Prime Minister Wen Jiabao said China was ready to invest in Belene on the condition that the Russian technology is abandoned for Chinese technology – something the Bulgarian government is unable to do as it has a contract with Russia.

Serbia has backed the Bulgarian plans for the Belene nuclear plant, with President Boris Tadic saying that Serbia will like to participate in the project with a 2%-5% stake. There have been reports that the Serbian participation could be funded by Chinese investors.

As the 2-year preliminary contract for the construction of Belene between NEK and Atomstroyexport expired at the end of September, the parties have agreed to extend it by 6 more months in order to have time for negotiations and reaching a final agreement.

The Borisov government is said to be demanding from the Russians a fixed price for the construction of the plant of not more than EUR 7 B, in order to avoid any "escalation costs" triggered by inflation or other factors. According to recent reports, the Russians would offer a price that is about EUR 800 M higher than the one desired by the Bulgarian government.

On Sunday, however, Parliament Chair Tsacheva expressed confidence that the two parties are very close to reaching an agreement.

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Tags: Belene Nuclear Power Plant, Belene NPP, Nuclear Power Plant, Tsetska Tsacheva, Parliament Chair, Russia, Bavaria, Germany, Angela Merkel, German Chancellor, Boyko Borisov, Rosatom, Atomstroyexport, RWE, Foreign investors, NEK
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» To the forumComments (4)
Jan Haverkamp - Greenpeace - 25 Oct 2010 // 09:59:16

I am puzzled why the editors of Sofia News Agency put this article as opening of their daily newsletter. I am puzzled why they saw any news-value in this at all. The chances on a German investor wanting to burn its fingers on a project that is environmentally, technically and economically so dodgy are virtually nil. @DrFaust: UniCredit has a nuclear policy that completely excludes Belene - and that is for any deal around the power plant. Belene is a no-touch project for western financiers and investors alike - and for good reasons. Ms Tsacheva just makes a fool of herself stating this, as did Mr. Ovcharov in the past with coming up with one financier or partner after another. Belene is too expensive, its siting is in a seismic active area where in 1977 120 people were killed in an earthquake, its technology still has to pass regulatory scrutiny.
I hope for the current Bulgarian government it finds fast a way to have to prevent paying Russia compensation payments - that is what seems to keep up any development of closing this murky chapter in Bulgarian history.

DrFaust - 25 Oct 2010 // 08:17:30


"Is the German investor the DZM or KfW?"

As I understand the article says that they 'almost certainly found one' strategic investor. That doesn't really sound to me as if they have already a deal.

Considering previous premature statements regarding a strategic investor from Germany, I am very sceptical.

I don't know a company 'DZM', but I am sure that KfW will not be involved in this project. KfW is state-owned and will not give any money for a project that is so extremely dangerous (constructing a not tested hazardous Russian technology in an area that is highly under risk when it comes to earthquakes) and against any legal standards and procedures in Germany.

My strong guess (if they have really a strategic partner from Germany) is that Hypovereinsbank changed its mind and is willing to finance the project as originally intended.

Hypovereinsbank is owned by UniCredit Group (Milano) who owns also UniCredit Bulbank. Two of the biggest shareholders of UniCredit Group are the Central Bank of Libya and the Libyan Investment Authority.

Jerry - 25 Oct 2010 // 01:34:00

Is the German Investor the DZM or KfW?

Will the real investor stand up!

Dino the Athenian - 24 Oct 2010 // 23:43:19


Big pay day for Bulgaria:


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