Rosatom: Bulgaria Will Not Pay for Belene Nuclear Plant
Russian state company Rosatom has urged Bulgaria to sign another agreement for the construction of the Belene nuclear power plant.
The company announced Sunday that Bulgaria will not have to pay anything from the state budget for the construction of the plant, while at the same time it will be allowed to keep 51% of the project.
The project company can attract independently the insufficient credit resources with a redemption date starting at the time when the first unit of Belene NPP starts selling out energy abroad, and with a redemption period of about 20 years, Rosatom's statement said.
The company has explained that in this way, Bulgaria, without paying anything, will receive a nuclear power plant that will supply the country with electricity at a low cost for the first 20 years, and in the next 40 years the project will work within a steady net profit for the Bulgarian budget as a beneficiary of its National Electric Company (NEK).
Rosatom has also stated that a fixed price was agreed upon with Atomstroyexport, a subsidiary of Rosatom. In this way, Atomstroyexport assumes all inflation risks, given that the construction of Belene NPP is expected to continue until 2017.
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.
Subsequently, in the last months of the Stanishev government in early 2009, Putin offered Bulgaria a Russian state loan of EUR 4 B, which ex PM Stanishev refused.
In late 2009, after the Borisov government took over, Rosatom offered Bulgaria a loan of EUR 2 B so that the construction can continue, in exchange for a stake in the future plant that the Bulgarian government could then buy out by returning the money. The offer was refused by the Borisov Cabinet which also made it clear it would construct the Belene plant only if an European (apparently meaning EU or Western European) strategic investor can be found.
Under Bulgaria's preliminary contract with Atomstroyexport signed in 2008, the construction of the Belene plant with two 1000-MW VVER nuclear reactors is supposed to cost EUR 3.997 B.
As the contract expired on September 30, 2010, Bulgaria and Russia decided to extend it by 6 months until they reach a final agreement on how much the construction of the Belene NPP will cost.
In mid November, the Bulgarian Energy Holding, NEK's parent company, picked HSBC, one of UK's biggest banks, for a consultant to help it decide how to proceed and attract new investors for the planned Belene nuclear power plant.
During his visit to Sofia in November, Sergey Kiriyenko, CEO of Russian state nuclear energy company Rosatom admitted that Bulgaria and Russia had made a mistake by not specifying the exact raise of cost for the construction of the Belene nuclear power plant.
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This plant is useless, too expensive, the environmental still exists (Belene lays in a earthquake active area) and there is no need for the energy, neither in Bulgaria nor in the neighbour states.
Russia uses Belene as a part of their geo strategical plans and to get a step into the energy markets in the EU.
BTW, there ain't nothing like a free lunch.