Bulgaria Reveals Germany's RWE 2008 Letter on N-Plant, Price Whopping EUR 10 B

Business » ENERGY | January 21, 2013, Monday // 15:33
Bulgaria: Bulgaria Reveals Germany's RWE 2008 Letter on N-Plant, Price Whopping EUR 10 B A file picture dated 03 September 2008 of a worker during the launch of the project for the construction of a building of the first 1,000 MW unit of the second nuclear plant of Belane, some 220km from Sofia, Bulgaria. Photo by EPA/BGNES

German utility RWE abandoned plans to participate in the construction of a 2000MW nuclear plant in the Bulgarian Danube town of Belene after realizing that its price tag has towered to EUR 10 B, according to the prime minister.

This allegedly emerges from a letter by the major German company to Bulgaria's state energy holding company NEK, dated 2008, which Prime Minister Boyko Borisov made public on Monday.

The letter was discovered by accident by Economy and Energy Minister Delyan Dobrev, tucked in a box, holding strictly confidential information, where the previous government hoped it will remain unseen, Borisov said.

In the letter RWE draws attention to the fact that NEK still has not made clear how it ill finance its share of the project worth EUR 5 B. The German company voices strong protest against plans for signing the fifth agreement with Russia for the project and commits to contribute up to EUR 10 M in it in 2009.

The previous Socialist-led government chose in 2009 German power utility RWE to become a strategic partner in the Belene project with a stake of 49%.

The next year however the German utility abandoned plans to participate in the construction of a 2000MW nuclear plant in Belene "due to funding problems".

Speaking on Monday, Prime Minister Borisov slammed the previous government for hiring BNP Paribas SA, France's largest bank by market value, to arrange a EUR 250 M loan to help fund construction of the nuclear power plant, whose price tag has towered from EUR 4 B to EUR 10 B.

NEK's poor results, triggered by a fall in power consumption, however forced it to breach the conditions on the loan, making it callable.

BNP Paribas SA, France's largest bank by market value, ditched the project in February 2010.

"The Socialsit-led government took the loan for the project in 2007 even though they knew they won't be able to provide the funding. They just spent the money for the Russians and their own benefit," Borisov fumed.

Bulgaria's state energy holding company, which groups the country's top energy assets, plans to tap international markets by the beginning of March to repay its debt.

The group aims to issue EUR 400 M worth of bonds, much higher than the initially set targets of USD 300 M or EUR 250 M.

The money will be used for refinancing the existing debt to BNP Paribas for the nuclear power plant project at Belene.

Borisov's statement comes days before Bulgarians head for the voting polls to cast a ballot in the country's national referendum on development of atomic energy.

The voters will receive a white ballot with the question "Should atomic energy be developed in Bulgaria through the building of a new Atomic Plant?" There will be an option to choose "yes" or "no" by using a blue ink pen.

Under current legislation in order to have a valid referendum at least 4 345 500 people must cast a ballot which is equal to the voter turnout at the last general election. A positive answer to the question of the referendum requires 50% of the vote plus 1 ballot.

The referendum on atomic energy, excluding the local one on the Burgas-Alexandroupolis oil line, is the first since the fall of the Communist regime in 1989. Before that national referendums have been held in 1922 – for the punishment of those responsible for the two national catastrophes; in 1946 – to change the rule of the country from monarchy to republic, and in 1971 for the so-called Zhivkov Constitution of Communist dictator, Todor Zhivkov.

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Tags: German, Germany, Wikileaks, Bulgaria, Belene, RWE, Atomstroyexport, BSP, government, BNPP, Bulgarian Energy Holding, NEK
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