Russia Wants to Settle Belene NPP Disputes with Bulgaria 'in Peace'

Energy | June 4, 2012, Monday // 17:17|  views

Russian state company Atomstroyexport is up for the "peaceful settlement" of the counterclaims it has with Bulgaria over the scrapped project for Bulgaria's Belene Nuclear Power Plant, Atomstroyexport CEO Valery Limarenko has stated.

Limarenko told the BGNES agency Monday that Atomstroyexport, a subsidiary of the Russian nuclear corporation Rosatom, which was supposed to construct the 2000 MW Belene NPP dropped by Bulgaria's Borisov Cabinet in March 2012, prefers to settle all issues with talks.

"At present, the constructors and designers are formulating their claims. The aim of these claims is to regulate the relations with Bulgaria. We are ready to reach a peaceful agreement in which the parties negotiate solutions of these problems. This is the mood of the participants," Limarenko declared.

He warned that there should be no hurry in hammering out the claims because "this is some really serious business."

"I think that the main parameters will become clear in June," he added.

After Bulgaria's Economy Minister Dolyan Dobrev went to Moscow in April, Bulgaria and Russia agreed to discuss their counterclaims over the Belene project, and to settle all issues in a joint commission.

After the construction of the 2000 MW plant by Atomexportstroy had been delayed with annexes 15 times, at the end of March 2012, the Borisov Cabinet formally abandoned the project, declaring it economically unfeasible.

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 greatest issue over which Bulgaria and Russia had been haggling for the past two years under the Borisov Cabinet was the price of the project, with Russia insisting it should be no less than EUR 6.3 B, while Bulgaria was 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 Sergey 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 would have had 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 had expressed interest in acquiring a share of 5%-10%.

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 wanted to reexamine the Belene NPP project - once Bulgaria finds an investor for it - even though it already approved it back in 2007.

Even before Bulgaria formally scrapped the Belene project, NEK and Rosatom had claims for one another, amounting to roughly EUR 60 M each over disputes for provided services and equipment deliveries and buy-back agreements that they have taken to international arbitration courts.

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