9 Firms Form US Consortium Bidding for Belene NPP - Consultant

Bulgarian financier Emil Harsev has turned out to be the local consultant of new US entity Global Power Consortium. Photo by BGNES

A total of nine companies are involved in the largely unknown US entity called "Global Power Consortium", which has announced its desire to purchase Bulgaria's abandoned Belene NPP project, Bulgarian financier Emil Harsev announced.

Harsev turned out to be the Bulgarian consultant of Global Power Consortium.

"We are talking about 9 companies directly involved in the funding, including the funding of the feasibility study. It is another matter if all of them are going to participate in the offer," Harsev told reporters in Sofia.

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.

Later, Russian state company Atomstroyexport denied a statement of the 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.

Meanwhile, Bulgarian Economy Minister Delyan Dobrev said the Cabinet would need a mandate from the Parliament in order to start new talks with the alleged potential investor interested in the Belene NPP.

Harsev, a popular Bulgarian financier, explained that Global Power Consortium was formally registered in the USA several months ago.

"Some of these companies are among the largest in the world, these are public companies and their status requires that they declare their participation in a project of such scale to the respective stock exchange," he added.

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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