Bulgarian PM Woos Areva for Belene Nuclear Plant

(L-R) Bulgarian PM Borisov, Economy Minister Traikov, Bulgarian Ambassador to France Raykov, and Areva CEO Anne Lauvergeon. Photo by Council of Ministers

Bulgaria's Prime Minister Boyko Borisov has met with Anne Lauvergeon, the CEO of French public multinational conglomerate Areva, over nuclear energy cooperation prospects.

The French giant might be included in the project for the construction of Bulgaria's second nuclear power plant in Belene on the Danube, the government press center announced after Borisov's meeting with Lauvergeon in Sofia, which was also attended by Minister of Economy, Energy, and Tourism Traicho Traikov and Bulgaria's Ambassador to France Marin Raykov.

In addition to Areva's potential participation the Belene NPP, the construction of a new reactor in Bulgaria's Kozloduy NPP was also discussed with the Areva CEO, as well as general prospects of strategic nuclear partnership between Bulgaria and France.

The Areva Holding together with Siemens is actually already involved in the construction of Belene as a subcontractor to Russian state company Atomstroyexport.

For the time being, however, the construction of the 2000-MW Belene NPP remains stalled as Bulgaria and Russia are unable to agree on a final price. In addition to the price, the gravest concern of the Bulgarian Borisov Cabinet has been to find a "strategic European investor."

It seemed that progress was achieved on both issues in fall of 2010 but subsequent developments have failed to confirm that.

In November, shortly after a visit to Sofia by Russian PM Putin, Bulgaria's National Electric Company NEK and Russian state company Rosatom signed a memorandum providing for a final fixed price for the two reactors of EUR 6.298 B.

This sum is still not final since the document is not binding; a final binding agreement for the establishing of a joint company for Belene is expected to emerge in 4-5 months, according to Rosatom head Sergey Kirienko, who was in Sofia to sign the document.

The other non-binding documents on Belene signed at the same time provided for participation in the project of Finnish company Fortum with a share of 1%, and of French company Altran Technologies with a share of 1%-25%. NEK is to keep a majority share of 51%, while Rosatom is also expected to have a share of 25%.

Serbia has expressed interest in acquiring a share of 5%-10% but the talks for that have not been finalized yet. It is unclear what share Areva might go for if it ultimately decides to seek participation in Belene.

After it was first started in the 1980s, the construction of Bulgaria's second nuclear power plant at Belene on the Danube was stopped in the early 1990s over lack of money and environmental protests.

After selecting the Russian company Atomstroyexport, a subsidiary of Rosatom, to build a two 1000-MW reactors at Belene and signing a deal for the construction, allegedly for the price of EUR 3.997 B, with the Russians during Putin's visit to Sofia in January 2008, in September 2008, former Prime Minister Stanishev gave a formal restart of the building of Belene. At the end of 2008, German energy giant RWE was selected as a strategic foreign investor for the plant.

The Belene NPP was de facto frozen in the fall of 2009 when the previously selected strategic investor, the German company RWE, which was supposed to provide EUR 2 B in exchange for a 49% stake, pulled out.

Subsequently, in the last months of the Stanishev government in early 2009, Putin offered Bulgaria a Russian state loan of EUR 4 B, which ex PM Stanishev refused.

In late 2009, after the Borisov government took over, Rosatom offered Bulgaria a loan of EUR 2 B so that the construction can continue, in exchange for a stake in the future plant that the Bulgarian government could then buy out by returning the money. The offer was refused by the Borisov Cabinet which also made it clear it would construct the Belene plant only if an European (apparently meaning EU or Western European) strategic investor can be found.

Under Bulgaria's preliminary contract with Atomstroyexport signed in 2008, the construction of the Belene plant with two 1000-MW VVER nuclear reactors is supposed to cost EUR 3.997 B.

As the contract expired on September 30, 2010, Bulgaria and Russia decided to extend it by 6 months until they reach a final agreement on how much the construction of the Belene NPP will cost.

In mid November, the Bulgarian Energy Holding, NEK's parent company, picked HSBC, one of UK's biggest banks, for a consultant to help it decide how to proceed and attract new investors for the planned Belene nuclear power plant.

During his visit to Sofia in November, Sergey Kiriyenko, CEO of Russian state nuclear energy company Rosatom admitted that Bulgaria and Russia had made a mistake by not specifying the exact raise of cost for the construction of the Belene nuclear power plant.

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