Τρίτη 26 Οκτωβρίου 2010

German investor could join Belene project


25/10/2010
Bulgaria says the long-delayed construction project will receive fresh momentum.
(BTA, Sofia News Agency, Dnevnik.bg, Mediapool, EMportal - 24/10/10; BTA, Dnevnik.bg - 23/10/10; Standart - 22/10/10; The Sofia Echo - 05/10/10)


The Belene nuclear power plant will definitely be built, Bulgarian Parliament Speaker Tsetska Tsacheva said on Sunday (October 24th), confirming recent hints by top government officials that a German investor may soon join the controversial project.
"After the visit of Prime Minister [Boyko] Borisov to the Free State of Bavaria, we now have more specifics about the availability of a strategic European investor from Germany," she said. "For the Bulgarian government, it was extremely important to secure the participation of a strategic European investor. We now almost certainly found one."
Meanwhile, the US ambassador to Bulgaria urged Sofia against rushing ahead with a multi-billion euro project before having assessed its economic viability.
"There are two questions that Bulgaria must ask itself -- if the Belene nuclear power plant is an economically feasible project, and, second, if it provides Bulgaria and the entire region with energy security," James Warlick said in an interview with the Bulgarian National Radio on Sunday. "I am not sure that there are answers to these questions. We are talking about billions of leva here, and the decisions that will be made with respect to Belene will affect Bulgaria's energy system for decades to come."
The project to build a second nuclear power plant on the Bulgarian side of the Danube River, 100km to the east of the existing one at Kozloduy, was launched by the country's former communist regime a few years before its fall in late 1989. Financial problems and pressure from environmental groups forced Sofia to suspend the plan in 1991.
By that time, Bulgaria had reportedly spent over 1 billion euros for the project.
The first step towards its revival was taken in April 2005, when the government of then Prime Minister Simeon Saxe-Coburg gave the green light for construction. About three years later, the coalition cabinet headed by the socialists' leader, Sergey Stanishev, contracted Russian state company Atomstroyexport to build the two 1,000-megawatt VVER reactors for an estimated price of nearly 4 billion euros.
More than 400m euros were spent by July 2009, when Borisov's centre-right Citizens for the European Development of Bulgaria (GERB) came to power after winning parliamentary elections held earlier that month. The new government said it would review all big energy deals with Russia, including the Belene project, before deciding whether to continue implementing them.
"I do not see the economic feasibility" of the Belene project, Finance Minister Simeon Djankov said just days after stepping into office on July 27th last year. "Even if we find private investors, the Belene nuclear power plant will not be a profitable one."
At the time, the stakes in the future plant were split 51% to 49% between Bulgaria's state-owned National Electric Company and Germany's RWE, which was to provide 2 billion euros for construction. After failing to find a partner to split the funding burden and hedge the risk, and amid a deepening economic crisis in Bulgaria and mixed signals coming from Sofia about the future of the project, the Essen-based company pulled out of it in fall 2009.

This led to the freezing of the project until a new strategic European investor is found. Russia has offered several times to extend state-guaranteed loans of up to 4 billion euros to Bulgaria so that construction can continue. Borisov and his predecessor have both rejected such offers.
Meanwhile, the estimated cost of the project has been rising steadily -- from the initially planned 4 billion euros to as much as 10 billion euros, or more.
Bulgaria is said to have recently put a maximum price tag of 7 billion euros on the plant, while the Russians are reportedly planning to offer a price about 800m euros higher than the one demanded by Sofia.
Earlier this month, Sofia and Atomstroyexport agreed to a six-month extension of the contract for construction, which expired on September 30th, so as to allow more time to reach a deal.
This content was commissioned for SETimes.com.


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