Russia Suspicious of Murky US Investor for Bulgaria's Belene NPP

Rosatom spokesperson Sergey Novikov has expressed suspicions over the alleged potential US investor for the Belene NPP. Photo by BGNES

Russia's state nuclear corporation Rosatom has expressed suspicions that the proposal of a previously unknown US consortium to revive the dead project for Bulgaria's Belene NPP might be somewhat of a theatrical performance.

"Rosatom is ready to return to the realization of the Belene NPP but we first need to discuss the details on the offer of the private US investor," stated Thursday the spokesperson of the Russian state corporation Sergey Novikov.

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.

Immediately after Reddy's announcement on Wednesday, Rosatom's subsidiary Atomstroyexport denied being in talks with it for taking over the abandoned project for Bulgaria's Belene NPP.

Novikov did stress on Thursday that the alleged appearance of a private investor interested in the Belene NPP project proves that the project is "economically feasible, profitable, and absolutely realistic".

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

However, Rosatom's spokesperson refuted once again the information that the Russian nuclear corporate is currently negotiating with the so called Global Power Consortium.

He left the door open by stating that the fact that there are no talks at present "doesn't mean that they can't be started".

"Once again we are learning important news from the media but we would really like to know the details and to be made aware of what is actually offered," Novikov said, while hinting of Rosatom's suspicions that the offer of Global Power Consortium might be a chapter of the "Belene Performance" of Bulgaria's Borisov Cabinet.

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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