Rosatom: Bulgaria's Belene NPP to Cost EUR 8 B, Let's Get It Started

Rosatom executive Kiril Komarov says he hopes the construction of Belene will start in 2011. Photo by BGNES

The project for the construction of Bulgaria's second nuclear power plant "Belene" is completely ready, according to Kiril Komarov, CEO of the nuclear energy complex of Rosatom and director of Atomenergoproekt.

"The project is fully prepared and no outside factors – save for "political emotions" - can affect it substantially," Komarov told a meeting in the Russian State Duma of its committee for cooperation with the Bulgarian Parliament, as cited by RIA Novosti.

The senior Rosatom executive declared that the project for the Belene nuclear power plant is favorable for both Bulgaria and Russia and would help solidify the strategic and business partnership between the two countries.

"We do hope that all necessary decisions will be made shortly, and that this year we will be able to set up the joint venture, and to start building," Komarov said while also admitting that the Bulgarian-Russian talks over Belene are hard because of haggling for the price.

Just last week, Komarov and Sergey Novikov, spokesperson of the Russian state nuclear corporation Rosatom, declared something of an ultimatum for the Bulgarian government – to make a final decision about the construction of the Belene plant – or at least to seal a new agreement for continued talks with Rosatom – by the end of March.

However, with less than a week of left of this deadline, no agreement seems to be in the making, which is why Bulgarian commentators have called the "ultimatum" issued by Rosatom a bluff.

Speaking on Thursday in Moscow, Komarov did stress the economic dimensions of the Belene NPP.

"As of today, Belene is the largest investment project in Bulgaria. It's total cost will be EUR 8 B, which is a colossal investment in the economy of the country. The construction alone will create 5000 jobs, and Bulgaria will get about EUR 1 B in supply orders," Kovarov told the Duma deputies.

It remains unclear how exactly he arrived at the EUR 8 B figure as the final price of the Belene NPP as the current non-binding deal between Bulgaria and Russia is for EUR 6.3 B – the sum that Komarov and Novikov mentioned last week in Sofia – and Bulgaria is said to demand a price of as little as EUR 5 B. He also announced that the construction site in the Bulgarian Danube town of Belene will be ready for the start of the installation of the first 1000-MW reactor about September 15, 2011. The ground for the building of the second reactor will be prepared by July 2012.

"The Belene NPP will be provided with such security systems that are capable of withstanding any extremities without outside power sources, and the participation of people," Komarov said referring to the nuclear safety issue following the situation in Japan.

The only official Bulgarian reaction to the "ultimatum" about the deadline and price offer for Belene issued by Rosatom was a brief comment by Bulgarian Economy and Energy Minister Traicho Traikov, who said that Bulgaria had made it clear it was not satisfied with the price of EUR 6.3 B, and that the talks were continuing.

Later on Wednesday, apparently acting on concerns caused by the situation in Japan's Fukushima NPP after the recent devastating earthquake there, the European Commission confirmed that it wants to reexamine the Belene NPP project - once Bulgaria finds an investor for it - even though it already approved it back in 2007

In February 2011, Bulgarian PM Borisov held talks with the French holding Areva over Belene.

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 2010, 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 was 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.

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