Bulgarian EconMin Asks Mandate for Talks with US Investor over Belene NPP

Business » ENERGY | September 26, 2012, Wednesday // 18:00| Views: | Comments: 0
Bulgaria: Bulgarian EconMin Asks Mandate for Talks with US Investor over Belene NPP Bulgarian Economy Minister Dobrev (right) with PM Boyko Borisov. Photo by BGNES

Bulgarian Economy Minister Delyan Dobrev has confirmed that a US enterprise called "Global Power Consortium" has expressed interest in buying the terminated project for the construction of the Belene NPP.

Dobrev commented, however, that for talks to be held with the largely unknown US consortium, the Bulgarian Parliament will need to authorize a government mandate.

"There is an investor that has expressed interest in the Belene NPP project but we need to have a parliamentary mandate for talks, and these talks need to be completed with a final offer that has to be presented then to the Parliament," Dobrev explained, as cited by BGNES.

He did remind that the Bulgarian Parliament has already adopted a decision to give up on the Belene project.

"The mandate for talks must be given with certain limitations – not to be bound in with state or corporate guarantees, or long-term electricity purchase contracts as well as having the investor assume all project spending by NEK (Bulgaria's National Electric Company – editor's note) in order to acquire its assets and liabilities," Dobrev explained.

"If we start talks with this company, we will be asking for guarantees that it has sufficient funding and the capacity to realize such a project in Bulgaria. We terminated the project because the state had no funding to make it happen," he added.

The Bulgarian Economy Minister further noted that there are many NPPs around the world that are 100% privately-owned.

"If we resume the talks with a private investor, this wouldn't mean that we won't form a parliamentary commission to investigate the Belene NPP in order to reveal the truth to the public about how these contracts were made. I don't know whether we can make the contract public if we accept a new offer because it may have to remain between Atomstroyexport and this new company," Dobrev elaborated apparently referring to the claims of the Borisov government that its predecessors signed unfavorable deals with Russia for the Belene plant.

Dobrev did note also that if the Belene NPP project gets realized after all, then Bulgaria most likely will not be building a seventh reactor at the Kozloduy NPP – where it is now planning to install the first of the two reactors built by Atomstroyexport for Belene.

Earlier, Russian state company Atomstroyexport denied a statement of the little known US consortium, Global Power Consortium, which claimed to be in talks with it for taking over the abandoned project for Bulgaria's Belene NPP.

The largely unknown US enterprise Global Power Consortium's interest in the construction of the 2000 MW Belene was made public in Sofia on Wednesday by a representative of the entity, Samuel Reddy, who said he had presented an offer to Bulgarian Minister of Economy, Energy, and Tourism Delyan Dobrev.

According to Samuel Reddy, the alleged Global Power Consortium is currently negotiating with Russian state company Atomstroyexport, which was supposed to build the NPP in Belene.

Bulgaria's government is currently tangled up in a EUR 1 B dispute with Russia over the termination of the Belene project. It is unclear how the GPC offer to "build" the NPP will affect the dispute.

In the middle of July 2012, 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: Samuel Reddy, Global Power Consortium, GPC, Belene NPP, NPP, Nuclear Power Plant, Rosatom, Atomstroyexport, Russia, Delyan Dobrev, Economy Minister
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