Russia's ASE Denies Having Talks with 'US Consortium' over Belene NPP

The abandoned construction site of what was to be a 2000 MW NPP near the Danube town of Belene. Photo by BGNES

Russian state company Atomstroyexport has denied a statement of a little known US consortium, Global Power Consortium, which claimed to be in talks with it for taking over the abandoned project for Bulgaria's Belene NPP.

"For the time being, Atomstroyexport isn't holding negotiations over the Belene nuclear power plant," the Russian company said in a statement to the Bulgarian media, reacting to the announcement made by Samuel Reddy, a representative of GPC, in Sofia that his consortium would like to purchase and build the Belene NPP project.

"However, if there is indeed interest on part of a US investor for the purchase of the Belene NPP project, this only comes to confirm that the project is economically feasible, profitable, and absolutely realistic. This is exactly what European energy experts have stated numerous times," Atomstroyexport said Wednesday afternoon, as cited by BGNES.

In this wording, Atomstroyexport apparently referred to the fact that in March 2012 Bulgaria's Borisov Cabinet announced it was ending the Belene NPP, labeling it "economically unfeasible".

The largely unknown US enterprise Global Power Consortium's interest in the construction of the 2000 MW Belene was made public in Sofia on Wednesday by a representative of the entity, Samuel Reddy, who said he had presented an offer to Bulgarian Minister of Economy, Energy, and Tourism Delyan Dobrev.

According to Samuel Reddy, the alleged Global Power Consortium is currently negotiating with Russian state company Atomstroyexport, which was supposed to build the NPP in Belene.

Bulgaria's government is currently tangled up in a EUR 1 B dispute with Russia over the termination of the Belene project. It is unclear how the GPC offer to "build" the NPP will affect the dispute.

In the middle of July 2012, Russia's state nuclear company Atomstroyexport took Bulgaria's NEK to an arbitration court for EUR 58 M over delayed payments for its work on two nuclear reactors.

The next day the Bulgarian company said it is ready to strike back with a EUR 61 M counter claim against Atomstroyexport over delayed payments for purchases of old equipment for the plant, worth about EUR 300 M.

Three months later, on September 11, Rosatom Corp., Russia's state-run nuclear company, increased a claim against Bulgaria's National Electricity Co. from EUR 58 M to EUR 1 B.

Atomstroyexport, a unit of Rosatom, said it increased its claim filed with the International Court of Arbitration in Paris in 2011 to cover construction work and production costs of the two canceled nuclear reactors.

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 has been de facto frozen since 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.

Shortly afterwards BNP Paribas SA, France's largest bank by market value, who was hired by the previous Socialist government to help fund the construction of Belene, ditched the project in February 2010.

RWE's departure from Bulgaria's new Belene nuclear plant put extra pressure on the new center-right government to find new shareholders while it redefines the scope of investment it needs.

NEK initially held a 51% stake in the scheme and Borisov's government planned to cut its shares in the project to 20-30%, which will still allow the country to keep its blocking quota.

Atomstroyexport was contracted in 2005 to build the plant for an initial 4 billion euros, but the costs later rose.

After failing to agree on its cost and find Western investors however in March 2012 Bulgaria decided to abandon plans to build its second nuclear power plant.

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