Socialist Chief: Bulgarian-Russian NPP Project Cheapest Ever Counting Inflation

Business » ENERGY | January 23, 2013, Wednesday // 12:16
Bulgaria: Socialist Chief: Bulgarian-Russian NPP Project Cheapest Ever Counting Inflation BSP and PES leader Sergey Stanishev keeps reiterating the alleged benefits of the Belene NPP project contracted with the Russians during his term as a PM. Photo by BGNES

The project for Belene Nuclear Power Plant in Bulgaria, a Bulgarian-Russian venture that was terminated by Bulgaria's center-right Borisov Cabinet a year ago, is the cheapest NPP project, according to Sergey Stanishev, head of opposition Bulgarian Socialist Party and ex Prime Minister.

Stanishev, whose government of the so called three-way coalition (2005-2009) signed the contract for the construction of the Belene NPP back in 2006 for a price of EUR 4 B with Russian state corporation Rosatom and its subsidiary Atomstroyexport, stated Wednesday the original agreement provided for a price adjustment according to inflation.

Bulgaria and Russia have been haggling over the price in question for the past five years, among other issues surround the construction of what was supposed to become Bulgaria's second NPP, with an initial capacity of 2000 MW.

Rosatom has insisted on a price of EUR 6.3 B, while Bulgaria's Borisov Cabinet demanded EUR 5 B at first. Subsequently, however, Bulgarian Prime Minister Boyko Borisov announced that the cost of the Belene project could run up to EUR 10 B, and that the project is prohibitively costly and economically unfeasible for Bulgaria. Its abandonment in March 2012, led Russia's Rosatom to file a suit with an international arbitration court in Paris.

"We know the inflation since 2006 so you can add it up, and you will get the actual price of the Belene NPP – EUR 5.2 B," Stanishev told reporters Wednesday.

He stressed that the Belene NPP project would not use money of the Bulgarian taxpayers and that it would be paid for from its revenues.

Stanishev further accused the government of deluding the public, and reminded that Bulgarian PM Borisov in fact defended the Belene project in a TV show 1.5 years ago.

"Borisov gave no explanation on why he changed his mind," he said, adding that he deems plausible two explanations – Borisov got pressured from the outside, or there are interests of producers of other kinds of energy involved.

Stanishev's reaction comes after on Monday the Bulgarian government revealed secret documents from the Economy Ministry demonstrating why German energy company RWE quit Bulgaria's nuclear project in 2009.

Borisov said German utility RWE abandoned plans to participate in the construction of a 2000MW nuclear plant in the Bulgarian Danube town of Belene after realizing that its price tag has towered to EUR 10 B.

According to Stanishev, he had talks with the RWE CEO back when he was the PM, and he never mentioned such a price.

"Way too many rebuttals have been made already by Mr. Borisov and his government," the Socialist chief said.

He also exposed the ruling GERB party for stating that the European Commission was against the construction of the Belene, while in fact EU Energy Commissioner Gunther Oettinger said that was not the case.

Stanishev further commented on the initiative of the Borisov Cabinet to install the first reactor produced by the Russians for the Belene NPP at Bulgaria's existing Kozloduy NPP.

"In order to bring [the construction site in] in Kozloduy to Belene's current level, you will need 8 years," he alleged.

The proposed price for the construction of two 1000 MW units of what was supposed to become Bulgaria's second nuclear power plant, Belene, was EUR 6.3 B, not EUR 10 B, as Bulgarian Prime Minister Boyko Borisov claims, Russian state company Rosatom stated on Tuesday.

According to Rosatom spokesperson Sergey Novikov, Bulgarian PM Boyko Borisov's statements that the planned price for the construction of the Belene nuclear plant was EUR 10 B are extremely perplexing.

On Monday, Borisov said German utility RWE abandoned plans to participate in the construction of a 2000MW nuclear plant in the Bulgarian Danube town of Belene after realizing that its price tag has towered to EUR 10 B.

This allegedly emerged from a letter by the major German company to Bulgaria's state energy holding company NEK, dated 2008, which Prime Minister Boyko Borisov made public on Monday.

The letter was discovered by accident by Economy and Energy Minister Delyan Dobrev, tucked in a box, holding strictly confidential information, where the previous government hoped it will remain unseen, Borisov said.

In the letter RWE draws attention to the fact that NEK still has not made clear how it ill finance its share of the project worth EUR 5 B. The German company voices strong protest against plans for signing the fifth agreement with Russia for the project and commits to contribute up to EUR 10 M in it in 2009.

The previous Socialist-led government chose in 2009 German power utility RWE to become a strategic partner in the Belene project with a stake of 49%.

The next year however the German utility abandoned plans to participate in the construction of a 2000MW nuclear plant in Belene "due to funding problems".

Speaking on Monday, Prime Minister Borisov slammed the previous government for hiring BNP Paribas SA, France's largest bank by market value, to arrange a EUR 250 M loan to help fund construction of the nuclear power plant, whose price tag has towered from EUR 4 B to EUR 10 B.

NEK's poor results, triggered by a fall in power consumption, however forced it to breach the conditions on the loan, making it callable.

BNP Paribas SA, France's largest bank by market value, ditched the project in February 2010.

Bulgaria's state energy holding company, which groups the country's top energy assets, plans to tap international markets by the beginning of March to repay its debt.

The group aims to issue EUR 400 M worth of bonds, much higher than the initially set targets of USD 300 M or EUR 250 M.

The money will be used for refinancing the existing debt to BNP Paribas for the nuclear power plant project at Belene.

Borisov's statement comes days before Bulgarians head for the voting polls to cast a ballot in the country's national referendum on development of atomic energy.

The voters will receive a white ballot with the question "Should atomic energy be developed in Bulgaria through the building of a new Atomic Plant?" There will be an option to choose "yes" or "no" by using a blue ink pen.

Under current legislation in order to have a valid referendum at least 4 345 500 people must cast a ballot which is equal to the voter turnout at the last general election. A positive answer to the question of the referendum requires 50% of the vote plus 1 ballot.

The referendum on atomic energy, excluding the local one on the Burgas-Alexandroupolis oil line, is the first since the fall of the Communist regime in 1989. Before that national referendums have been held in 1922 – for the punishment of those responsible for the two national catastrophes; in 1946 – to change the rule of the country from monarchy to republic, and in 1971 for the so-called Zhivkov Constitution of Communist dictator, Todor Zhivkov.

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Tags: Belene, RWE, Atomstroyexport, BSP, government, BNPP, Bulgarian Energy Holding, NEK, Belene NPP, Atomstroyexport, Rosatom, Russia, Sergey Novikov, Sergey Stanishev, BSP, Bulgarian Socialist Party, EC, European Commission, Prime Minister, Boyko Borisov
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