US Group Eyeing Belene Admits to Lack of Nuclear Experience

Bulgaria is mulling talks with a US-registered consortium to resume the abandoned Belene nuclear power project as a private endeavor. Photo by EPA/BGNES

The US group, interested in building 2,000 MW nuclear plant in Bulgaria, has no experience in the sector, the investors' representative has admitted.

"We have never owned a nuclear project and have never managed on our own a single project of this scale," Samuel Reddy said in an interview for Capital business newspaper.

Earlier this week the American investment fund Quantum Group expressed interest in taking over the project to install two 1,000 megawatt nuclear reactors at the Danube River town of Belene and build it without state funds or guarantees.

In the interview Reddy described Quantum Group as a project company registered in the US state of Delaware.

He stressed that he has worked with this company on many projects and was invited for this case because of his 30 years of experience in the nuclear industry.

Reddy stated that "at present there is nothing on the table" and negotiations could take "months, two months or even more".

According to Bogomil Manchev, owner of the Risk Engineering company and consultant for the alleged US investors for the project, the investors will provide the so-called own capital of EUR 2 B, while the estimated remaining EUR 8 B, which include the debts of the National Electric Company, NEK, will come from other investors.

The businessman is firm he was the one to attract the Americans, with whom he had joint projects all over the world, such as "Risk Engineering" being a subcontractor for a Quantum Group Middle East job.

Meanwhile, local media reported that the NPP Belene candidate is quite murky, while Ancho Badev, representative of Bulgaria in the Quantum Group consortium, is a failed candidate to privatize the pharmaceutical company Sopharma and the Varna ship yard, and Samuel Reddy, who arrived in the Parliament as a spokesperson for the Consortium, is known in international energy circles as a "participant in lost causes."

"Global Power Consortium had to be registered in the US "offshore" State of Delaware without any listed assets because the government required a federal registration," Manchev, quoted by Trud, says, adding the Cabinet had known for a while about the US company's intentions, despite the fact they were officially announced just days ago.

The US Embassy in Sofia issued an official statement stressing the American government is not a side in any discussions about a possible interest of US companies in the Belene project.

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.

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 2011, 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.

Bulgaria selected the Russian company Atomstroyexport, a subsidiary of Rosatom, to build a two 1000-MW reactors at Belene and signed 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, in February 2010, BNP Paribas SA, France's largest bank by market value, which was hired by the previous Socialist government to help fund the construction of Belene, ditched the project.

RWE's departure from Bulgaria's new Belene Nuclear Plant put extra pressure on the new center-right government to find fresh 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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