Bulgarian EconMin Faces Tough 'Belene' Talk in Moscow

Business » ENERGY | March 30, 2012, Friday // 09:14
Bulgarian EconMin Faces Tough Belene N-Plant Talk in Moscow: Bulgarian EconMin Faces Tough 'Belene' Talk in Moscow According to Russian media, Bulgarian PM, Boyko Borisov (l) and Energy Minister, Delyan Dobrev (r), face Moscow's wrath over the scraped joint nuclear plant project. Photo by Sofia Photo Agency

Atomstroyexport, the Russian contractor selected to build the Belene NPP, will not give up on the lawsuit for EUR 58 M against Bulgaria's National Electric Company (NEK) at the International Court of Arbitration in Paris.

The information was published Friday by Russia's business daily "Vedomosti," just in the eve of the arrival in Moscow of Bulgaria's Economy and Energy Minister, Delyan Dobrev. Dobrev is set to ask the Russian side to agree on stopping the joint project to build a second Nuclear Power Plant, NPP, in Bulgaria's Danube town of Belene, without the country having to pay penalties.

Russian Energy Minister, Sergey Shmatko, already declared that Russia will insist on Bulgaria adhering to its contract responsibilities.

Russia's state-owned nuclear corporation Rosatom is yet to comment officially on the issue of compensations for the failed Belene project, however, Moscow-based "Komersant" daily writes, citing own sources speaking off the record that the corporation's expensed amount to EUR 1 B and this could be the bill Bulgaria would face.

The sources, said to be insiders in the Belene negotiations, further inform that the decision of Bulgaria's government to scrap the project is political and was, most likely, influenced by the position of the US. The daily notes that the whistle-blowing site WikiLeaks has published documents exposing the US Embassy in Sofia and the American company Westinghouse of pressuring Bulgarian officials.

The unidentified energy expert also slams the idea to use the Russian reactor at the existing Bulgarian NPP Kozloduy as more unprofitable for the country than Belene, adding it would take between 7 and 12 years to finalize it, while inflation can increase the price by 30%-40%.

On Thursday, Bulgaria sent a note to Russia asking it to launch negotiations on the cancellation of the two countries' nuclear power plant project.

Bulgaria's Parliament has already adopted a decision to terminate the construction of the 2000 MW nuclear power plant, a project conceived back in the 1980s.

The construction of the 2000 MW plant by Rosatom subsidiary Atomexportstroy had been delayed with annexes 15 times.

At the end of last week, Bulgaria's Prime Minister Boyko Borisov said in a TV interview that Belene would never remain just a Russian-Bulgarian project and would not go forward without a European or American investor.

A few days ago, his Deputy, Finance Minister Simeon Djankov, admitted that Bulgaria has "almost given up on the project."

Rosatom had made it clear it is ready to agree on yet another extension of the contract with the Bulgarian government for the construction of the Belene nuclear power plant.

The currently active extension of the 2006 deal between Bulgaria's National Electric Company NEK and Atomstroyexport was set to expire at the end of March 2012.

In October 2011, Bulgaria and Russia reached an agreement to extend the negotiations over Belene nuclear project by another six months as of the beginning of October amidst continuing haggling over its price and feasibility.

The greatest issue over which Bulgaria and Russia had been haggling for the past two years under the Borisov Cabinet was the price of the project, with Russia insisting it should be no less than EUR 6.3 B, while Bulgaria was demanding a price of no more than EUR 5 B.

After selecting Atomstroyexport 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 Sergey 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.

In November 2010, 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.

According to the non-binding memorandum expiring on March 31, 2011, Bulgaria's NEK would have had a share of 51% in the Belene NPP, Rosatom – a share of 47%, Finnish company Fortum - a share of 1%, and French company Altran Technologies - a share of 1% with an option to increase it. Serbia had expressed interest in acquiring a share of 5%-10%.

In mid-March 2011, apparently acting on concerns caused by the situation in Japan's Fukushima NPP after the recent devastating earthquake there, the European Commission confirmed that it wanted to reexamine the Belene NPP project - once Bulgaria finds an investor for it - even though it already approved it back in 2007.

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Tags: lawsuit, Economy Ministry, Atomstroyexport, equipment, arbitration court, Arbitration, International Arbitration Court in Paris, BEH, Belene, Belene NPP, Nuclear Power Plant, NPP, Rosatom, Atomstroyexport, Economy Minister, Traicho Traikov, Prime Minister, Boyko Borisov, Siemens, Areva, Rosatom, Atomstroyexport, Belene, Nuclear Power Plant, National Electric Company, Fortum, altran, NPP, Altran Technologies, Russia, Belene, Moscow, Nuclear Power Plant, Sergey Shmatko, Kozloduy, Russia, Delyan Dobrev
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