Bulgaria Doubles State Guarantees for Belene Nuke Construction

Monday, October 22, 2007

18 October 2007, Thursday

PM Stanishev (left) and Finance Minister Oresharski (right) have both backed the project to the hilt so far, and Bulgaria's low foreign debt allows the cabinet to underwrite the loans.

Bulgaria's cabinet decided on Monday to double the amount of debt it is willing to guarantee for the construction of the country's second nuclear power plant at Belene.

The Socialist government agreed earlier to underwrite a EUR 300 M loan from the EU's Euratom agency, but is now willing to guarantee a loan for the same amount from the European Investment Bank (EIB).
The European Commission is still considering its position on Bulgaria's choice of third-generation Russian-make VVER reactors, since the country, which joined the bloc in January, is the first that plans to build the type in the EU.
Bulgaria needs a positive opinion from the European executive, which is expected by end-2007 at the earliest, before it can apply for the loan from Euratom.

But state-owned power grid operator NEK, who will own 51% in the company that will build and operate the nuclear plant, has also asked for state guarantees for the funds it plans to borrow from EIB.

The total construction costs for the plant, which will feature two 1000 MW reactors built by Russia's Atomstroyexport, are estimated at EUR 4 B.

Bulgaria has claimed it has already secured EUR 250 M in funding for the plant from BNP Paribas, and part of the funding is expected to come from the sale of 49% in the future plant, with Czech CEZ, German E.ON and RWE, Belgian Electrabel and Italy's Enel all vying for it.

Bulgaria decided to unfreeze its plans to build the plant in 2004, having mothballed them a decade and a half earlier, to compensate for shutting down four older Soviet reactors at its Kozloduy facility at the request of the EU.

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