Bulgaria pours 300M leva in Belene nuclear plant

Friday, October 17, 2008

Bulgaria's Cabinet plans to inject 300 million leva into the National Electric Company (NEK) to cover the costs of the transitional stage of building the nuclear power plant at Belene on the Danube River, the Government press service said in a statement.

The cash would be given as an equity hike in NEK, which is now part of the Bulgarian Energy Holding (BEH) that the Cabinet created in September 2009 by integrating Maritza Iztok mines, Maritza Iztok 2 thermal power plant and NEK into the holding structure of gas provider Bulgargaz.

The transitional stage vital for the succesful completion of the project and will end in December 2009, according to the statement. With the allocation of the 300 million leva, the transition stage of the development of Belene has been assured until its financial completion by December 2009.

The cash injection is meant to persuade banks that, with the Government fully backing the project support for the project, it was a safe bet to lend money for the construction of the future power plant. By the end of 2009, NEK will have to assume the expences of 450 million euro for the plant's equipment, Dnevnik daily reported.

Some funding will come from Germany's RWE, which was picked earlier in October to buy a 49 stake in the company that would build and operate Belene after offering to pay 1.275 billion euro for the stake, rising to two billion euro by the time the power station is finished in 2014. It also offered NEK, which has had trouble finding banks willing to lend the money for Belene in the current global credit squeeze, a loan of 550 million leva to finance the project.

The deal is expected to be signed by end-November, by which point the terms of the contract would be finalised.

NEK will own the remaining 51 per cent in Belene, which, Bulgarian authorities hope, would once again make the country a major electricity exporter in South-Eastern Europe, after it had to shut down Soviet-built reactors at its Kozloduy power plant before joining the European Union in January 2007.

Belene's twin 1000-MW reactors would be built by Russia's Atomstroyexport, controlled by gas company Gazprom, with France's Areva and Germany's Siemens as subcontractors. The construction costs have been set at four billion euro but the total outlay on the project is expected to be closer to seven billion euro, if not more, given the rising global commodity prices.

The nuclear plant faces strong opposition from environmental NGOs who argue that the site at Belene is not safe.

Posted in |