Bulgaria Undaunted by Russia's Court Battle over N-Plant

Business » ENERGY | September 12, 2012, Wednesday // 10:33
Bulgaria: Bulgaria Undaunted by Russia's Court Battle over N-Plant The Belene nuclear power plant has been de facto frozen since the fall of 2009 when the previously selected strategic investor, the German company RWE, pulled out. Photo by Sofia Photo Agency

Bulgaria will rely on two back-up plans as Russia's Atomstroyexport is seeking EUR 1 B in compensation over the cancellation of nuclear power plant Belene, the energy minister has said.

"We hired the best lawyers, who have repeatedly won court cases against some of the biggest Russian companies. Their opinion is that we have every reason to believe we will win the case," Delyan Dobrev said in the morning broadcast of bTV channel on Wednesday.

In his words Rosatom's claim against Bulgaria's National Electricity Co. of EUR 1 B is "totally unrealistic".

Minister Dobrev explained that the Bulgarian side has offered Moscow a few options on how to settle the scores without resorting to the arbitration court.

"Even if we have to pay something, the sum will be much smaller. But from now on we will pay nothing," the minister stressed.

Minister Dobrev slammed the procedure for the construction of Belene nuclear power plant as "state treason", flawed from the beginning in 2006 by "corrupt politicians with vested interests".

In the middle of July Russia's state nuclear company Atomstroyexport took Bulgaria's NEK to an arbitration court for EUR 58 M over delayed payments for its work on two nuclear reactors.

The next day the Bulgarian company said it is ready to strike back with a EUR 61 M counter claim against Atomstroyexport over delayed payments for purchases of old equipment for the plant, worth about EUR 300 M.

Three months later, on September 11, Rosatom Corp., Russia's state-run nuclear company, increased a claim against Bulgaria's National Electricity Co. from EUR 58 M to EUR 1 B.

Atomstroyexport, a unit of Rosatom, said it increased its claim filed with the International Court of Arbitration in Paris in 2011 to cover construction work and production costs of the two canceled nuclear reactors.

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 has been de facto frozen since 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.

Shortly afterwards BNP Paribas SA, France's largest bank by market value, who was hired by the previous Socialist government to help fund the construction of Belene, ditched the project in February 2010.

RWE's departure from Bulgaria's new Belene nuclear plant put extra pressure on the new center-right government to find new shareholders while it redefines the scope of investment it needs.

NEK initially held a 51% stake in the scheme and Borisov's government planned to cut its shares in the project to 20-30%, which will still allow the country to keep its blocking quota.

Atomstroyexport was contracted in 2005 to build the plant for an initial 4 billion euros, but the costs later rose.

After failing to agree on its cost and find Western investors however in March 2012 Bulgaria decided to abandon plans to build its second nuclear power plant.

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Tags: RWE, HSBC, Russian, Russia, National Electric Company, NEK, Djankov, Simeon, Parvanov, Krasimir, project, plant, power, Russia, Bulgaria, Belene, Moscow, sofia, Belene NPP, Nuclear Power Plant, NPP, Kozloduy NPP, Traikov, Traicho, Rosatom, Atomstroyexport, nuclear, reactor, safety, Japan, Earthquake, tsunami, Fukushima, EU, emergency meeting, Kozloduy, Prime Minister, Borisov, Boyko, Bulgarian Energy Holding, Russians, BEH, Bulgarian
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