Bulgaria's Energy Minister Oscillates between Belene NPP and Kozloduy Expansion

Business » ENERGY | January 18, 2011, Tuesday // 15:33| Views: | Comments: 0
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Bulgaria: Bulgaria's Energy Minister Oscillates between Belene NPP and Kozloduy Expansion Bulgaria's Economy, Energy and Tourism Minister Traikov has toned down his enthusiasm for the Belene NPP. Photo by BGNES

The construction of two new reactors at the Kozloduy Nuclear Power Plant is on the table if Bulgaria decides against the construction of what should be its second NPP at Belene, according to Economy Minister Traikov.

"The option for the construction of a 7th and 8th reactor at the Kozloduy NPP is on the table," Traikov stated during a forum at the Parliament organized by the Sofia-based Center for the Study of Democracy entitled "Energy and Better Governance: Trends and Policies."

On Tuesday, Traikov, who has been actively involved in the negotiations for the prices of the construction of the Belene NPP with Russia, and has generally been much more of a proponent of the project, unlike Finance Minister Simeon Djankov, spoke in a more hesitant way about the future of the Belene nuclear plant.

"I am constantly updated on the talks about the price of the Belene NPP. There has been no change in my position on the project. When something is not economically feasible and is connected with the investment of public funds, then it's effect is not good. We don't want to close any of the options – currently, the Belene NPP project is developing in a way that guarantees the arguments in favor of making decisions at each phase," Traikov declared.

During the same forum, Krasimir Parvanov, the CEO of Bulgaria's National Electric Company NEK, which is the majority stakeholder in the Belene project, said that he expected "more clarity" about the price of the future nuclear plant within two weeks.

"We will carry out an analysis from each point of view about the proposals for the second nuclear plant – the construction works, the construction materials, the spending. Then we will see if what the Russian side demands is updated," Parvanov said.

Bulgaria's Borisov Cabinet declared that it would not provide money from the state budget for the construction, it set out in search of potential foreign investors to fuel the construction of the plant. By the end of 2010, it reached a certain level of progress in talks with Russia and Rosatom's subsidiary Atomstroyexport, and with some foreign companies interested in having shares in the project.

In November, shortly after a visit to Sofia by Russian PM Putin, Bulgaria's National Electric Company NEK and Russian state company Rosatom signed a memorandum providing for a final fixed price for the two reactors of EUR 6.298 B.

This sum is still not final since the document is not binding; a final binding agreement for the establishing of a joint company for Belene is expected to emerge in 4-5 months, according to Rosatom head Sergey Kirienko, who was in Sofia to sign the document.

The other non-binding documents on Belene signed at the same time provided for participation in the project of Finnish company Fortum with a share of 1%, and of French company Altran Technologies with a share of 1%-25%. NEK is to keep a majority share of 51%, while Rosatom is also expected to have a share of 25%.

Serbia has expressed interest in acquiring a share of 5%-10% but the talks for that have not been finalized yet.

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.

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Tags: Traicho Traikov, Economy Minister, Belene NPP, Kozloduy NPP, Nuclear Power Plant, Russia, Rosatom, Atomstroyexport
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