Russia Ready with Bulgaria's Belene Nuclear Reactor

Energy | March 17, 2012, Saturday // 13:49|  views

Bulgaria began the construction of NPP "Belene" as early as the 80s, but with the collapse of the socialist system the project had been frozen since the beginning of the 90s. Photo by BGNES

Russia's Atomstroyexport has assembled the reactor for the first block of the Nuclear Power Plant NPP to be built in the Bulgarian Danube town of Belene.

The reactor BBEP-1000 has been test-assembled in the Izhor plants, which is one of the final stages before it is to be ready for transportation, the Bulgarian news agency BGNES reported Saturday, citing a press release of the Russian company that is part of the State Corporation Rosatom.

On Friday, Atomstroyexport said it would stop work on the Belene NPP over the "ambiguous position of the Bulgarian government." The company vowed to reduce the number of employees at the construction site.

Also on Friday, Prime Minister, Boyko Borisov, explained that there was an option to install at the existing Kozloduy NPP the first of the Russian-made nuclear reactors slated for the future Belene plant, for which Bulgaria has already paid two-thirds of the price.

The Russian company announced Saturday the reactor will be ready to be transported to Bulgaria in mid-April.

The press release stresses that with this Rosatom has fulfilled all commitments to build a second nuclear plant in Bulgaria while the whole technological operation had been observed by representatives of the Bulgarian National Electric Company, NEK.

"Atomstroyexport proposed to Bulgaria one of the most advanced projects for nuclear plants, which refers to the generation 3 +. The project meets all requirements of the contracting authority and international standards and recommendations of the International Atomic Energy Agency (IAEA)," states the company.

In October 2011, Bulgaria and Russia reached an agreement to extend the negotiations over Belene nuclear project by another six months as of the beginning of October amidst continuing haggling over its price and feasibility.

The contract between Bulgaria's National Electric Company NEK and Russia's Atomstroyexport, a subsidiary of Rosatom, was extended by the end of March 2012.

The greatest issue over which Bulgaria and Russia have been haggling for the past two years under the Borisov Cabinet has been the price of the project, with Russia insisting it should be no less than EUR 6.3 B, while Bulgaria is demanding a price of no more than EUR 5 B.

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.

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.

According to the non-binding memorandum expiring on March 31, 2011, Bulgaria's NEK will have a share of 51% in the Belene NPP, Rosatom – a share of 47%, Finnish company Fortum - a share of 1%, and French company Altran Technologies - a share of 1% with an option to increase it. Serbia has expressed interest in acquiring a share of 5%-10% but the talks for that have not been finalized yet.

In mid-March 2011, 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 April 2011, the Bulgarian government formally signed a consulting contract with UK-based company HSBC (which won the tender in November 2010) for the financial analysis for the project for the construction of the Belene nuclear power plant. Bulgaria will be paying HSBC EUR 2 M for its services plus 0.95% of the end price of the Belene NPP if it is realized. This means that if HSBC declares the Belene NPP project to be economically feasible, and it is constructed, it will get a fee of EUR 47.5 M if the plant costs EUR 5 B.

Another important issue plaguing the Belene NPP project that surfaced in the recent week is the mutual financial claims of the two parties over sums allegedly owed for the delivery of new equipment and buyout of old equipment for the future plant, with Atomstroyexport recently filing an EUR 58 M suit against NEK with the International Arbitration Court in Paris, and NEK responding with an EUR 61 M suit in Geneva.

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