Bulgaria, Russia strike deal on Belene nuclear plant

, Comments 0 comments

Bulgaria and Russia struck Tuesday a surprise 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 late Tuesday on the sidelines of a regional energy forum in Sofia by the head of Russia's state nuclear power company Rosatom, Sergei Kiriyenko, and Bulgaria's NEK national electricity company chief, Krasimir Parvanov.

The completely unexpected deal was agreed earlier Tuesday in talks between Kiriyenko and Bulgarian Prime Minister Boyko Borisov and prepared 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 its strategic investor, the German power giant RWE, which was originally to have held a 49-percent stake.

Russia has long offered to temporarily acquire a stake in Belene until finding a new European strategic investor to enter the project, but Bulgaria was so far 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 up, Traikov said, adding that both companies 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, Kiriyenko confirmed the foreign interest in the plant concerned minority stakes.

He meanwhile reiterated Russia's readiness to participate in Belene with up to a 40 to 45 percent stake while a new investor was found, and hinted that Bulgaria would most likely accept the offer provided that it maintained its majority stake in the plant.

"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," Kiriyenko said.

Kiriyenko signalled that there was also 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 an initial estimate of 3.9 billion euros plus inflation.

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

Kiriyenko hinted Tuesday that Russia was ready to give Bulgaria a fixed total construction price but did not mention figures.

He added that Rosatom was ready to "take the risk" and fully fund the initial stages of the project.

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

0 Comments To This Article