US Group Sets EUR 8 B Price Tag for Bulgaria's N-Plant

Business » ENERGY | September 30, 2012, Sunday // 19:04| Views: | Comments: 0
Bulgaria: US Group Sets EUR 8 B Price Tag for Bulgaria's 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

The construction of Bulgaria's nuclear power plant in Belene would cost EUR 8 B, according to estimates of the consultant of the alleged US investors in the project.

Earlier this week the recently US-registered Global Power Consortium expressed interest in taking over the project to install two 1,000 megawatt nuclear reactors at the Danube River town of Belene and build it without state funds or guarantees.

The companies behind the consortium however are yet unknown.

The consortium brings together the US investment fund Quantum Group, two large strategic investors, a big US bank and one operator, commented Bogomil Manchev, owner of "Risk Engineering" company and consultant for the alleged US investors for the project.

He however once again declined to disclose the names of the entities included in the tie-in.

In the final assessment, the cost of EUR 8 B will cover the construction of two nuclear units and the adjacent infrastructure on the site, said Manchev.

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.

Immediately after Reddy's announcement on Wednesday, Rosatom's subsidiary Atomstroyexport denied being in talks with it for taking over the abandoned project for Bulgaria's Belene NPP.

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 2011, 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.

Bulgaria selected the Russian company Atomstroyexport, a subsidiary of Rosatom, to build a two 1000-MW reactors at Belene and signed 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, in February 2010, BNP Paribas SA, France's largest bank by market value, which was hired by the previous Socialist government to help fund the construction of Belene, ditched the project.

RWE's departure from Bulgaria's new Belene Nuclear Plant put extra pressure on the new center-right government to find fresh 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: Risk Engineering, Bogomil Manchev, Quantum Group, Rosatom, ASE, Economy Minister, Delyan Dobrev, Russia, Atomstroyexport, Rosatom, Nuclear Power Plant, NPP, NPP, Belene, GPC, Global Power Consortium, Samuel Reddy, NEK
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