Bugaria PM: Nuclear Plant Loan Disgrace for Former Government

Business » ENERGY | August 28, 2009, Friday // 11:05| Views: | Comments: 0
Bulgaria: Bugaria PM: Nuclear Plant Loan Disgrace for Former Government The former Socialist government hired in 2007 BNP Paribas SA, France's largest bank by market value, to arrange a EUR 250 M loan to help fund construction of a EUR 4 B nuclear power plant at the Danube river town of Belene. Photo by BGNES

There is a total lack of transparency in the way Bulgaria's previous government has spent BNP Paribas-syndicated loan for the launch of the construction of a EUR 4 B nuclear power plant at the Danube river town of Belene, the prime minister argues.

"They best thing for former government can do is admit their shocking incapability to manage the state, a perfect example of which is the loan they took from BNP Paribas," Boyko Borisov told Nova TV channel on Friday morning.

"It was clear from the time the loan was signed that it will become callable. The situation now is that either the interest rate jumps drastically or we pay back EUR 250 M. They have taken the money, splurged it on Belene nuclear power plant but with no clear purpose," he added.

Borisov said he will approach the prosecutor's office over the decisions taken on this issue by former Economy and Energy Minister Petar Dimitrov.

A day earlier Dimitrov defended himself, saying that Bulgaria's state power utility NEK should be held responsible for singing and breaching the conditions of BNP Paribas-syndicated loan, making it callable.

"The liquidity criteria was not met even when the contract was signed in 2007. The bomb, which has now exploded, was planted that early," Socialist Petar Dimitrov told Nova TV channel on Thursday morning.

The former Socialist government hired in 2007 BNP Paribas SA, France's largest bank by market value, to arrange a EUR 250 M loan to help fund construction of a EUR 4 B nuclear power plant at the Danube river town of Belene.

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

Bulgaria's previous Socialist-led government chose last year German power utility RWE to become a strategic partner in the Belene project with a stake of 49%. State power utility NEK, which has a majority stake in the plant, contracted Russia's Atomstroyexport to build the two 1,000 megawatt reactors.

The new Bulgarian government is to decide by the end of September whether to scrap or push ahead the construction of the multi-billion Belene nuclear power plant.

 

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Tags: BNP Paribas, Belene, Petar Dimitrov, Boyko Borisov
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