Bulgaria, Russia strike deal on Danube nuclear plant

30th November 2010, Comments 0 comments

Bulgaria and Russia struck on Tuesday a deal to unfreeze a long-stalled project for a new 2,000-megawatt nuclear power plant on the Danube as foreign investors signalled they were ready to join in.

A memorandum for setting up within four months the project company for Belene was signed on the sidelines of a regional energy forum in Sofia by the head of Russia's state nuclear power company Rosatom, Sergey Kirienko, and Bulgaria's NEK national electricity company chief, Krasimir Parvanov.

The surprise deal was agreed earlier Tuesday in talks between Kirienko and Bulgarian Prime Minister Boyko Borisov and put together within hours.

Rosatom's subsidiary Atomstroyexport was already contracted in 2008 to build the 2,000-megawatt nuclear power plant at Belene, in northern Bulgaria.

But the project has been dogged by a dispute over the construction costs and the withdrawal of German investor, the power giant RWE, which was originally to have held a 49-percent stake.

Russia has long offered to acquire a stake in Belene until finding a new European strategic investor to enter the project but Bulgaria had been reluctant to agree.

Bulgaria's Energy Minister Traicho Traikov said on the sidelines of the energy forum in Sofia Tuesday that French consultancy Altran Technologies and Finnish power company Fortum Corporation had expressed interest "in principle" in buying a stake in Belene.

Both companies also signed Tuesday separate memorandums of understanding with Rosatom and NEK.

The exact size of their investments and any further details would be agreed as soon as the joint company was set, Traikov said, adding both firms planned to initially take up stakes of 1.0 percent with a view of later increasing Fortum's share to as much as 25 percent.

In comments to journalists Tuesday, Kirienko confirmed the foreign interest in the plant concerned minority stakes and reiterated Russia's readiness to participate in Belene with as much as 45 percent while a new investor was found.

"The Bulgarian government is not ready to give us a controlling stake in the company. We understand this decision and we are ready to agree with the stake offered by the cabinet -- we speak about 40-45 percent -- which is our participation," he said.

Kirienko signalled there was also certain progress on a second major argument between Sofia and Moscow about the plant's final cost.

Rosatom has recently put the estimated final cost of Belene at at least 6.3 billion euros (8.6 billion dollars), compared to 3.9 billion euros plus inflation indexing initially.

Sofia in turn insisted the cost must be fixed and not exceed 5.0 billion euros.

Belene's first 1,000-megawatt reactor is planned to go online in 2016, followed by the second a year later. The plant will have an operation capacity of 60 years.

© 2010 AFP

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