Bulgarian government issues Belene construction permit

15 July 2008

Bulgaria's government has given its approval for the construction of the Belene nuclear power plant by Russia's AtomStroyExport (ASE). However, issues with funding the plant's construction remain.
 

Belene 

The planned Belene plant (Image: NEK)

The ministry of regional development and public works has approved the construction of the plant by Russian reactor supplier ASE. It has also issued a construction permit to state-owned utility National Electric Company (NEK) for Belene. A protocol was signed on 10 July under which NEC officially passed ASE permission for the construction of the Belene plant.
 

ASE won the tender in 2006 to supply two 1000 MWe reactors at Belene, scheduled to begin operating in 2013 and 2014. Two AES-92 model VVER units with V466 pressurised water reactors will be designed, constructed and commissioned by the Russian firm following the acceptance of its bid by directors of NEK in October 2006. The units will be similar to the two already built by ASE at Tianwan in China.

 

In December 2006, the Nuclear Regulatory Agency approved the Belene site for construction of a new plant, following 16 months assessment of NEK's proposal. A contract for the Belene reactors was signed between NEK and ASE on 18 January 2008.
 

France's Areva NP and Germany's Siemens will be sub-contractors on the project, while Bulgarian companies will also be involved in the construction. The project is valued at some €4 billion ($6.4 billion). Construction of the two new units at Belene, on the Danube River, is scheduled to begin in the second half of 2008.

 

Financing
 

In December 2007, the European Commission (EC) issued a 'favourable opinion' of financial arrangements to build the two reactors at Belene. EC approval of any nuclear project in the EU is required under the Euratom Treaty, and would be one requirement for a possible loan under Euratom. The EC said any application for such a loan would be evaluated according to its own merits. NEK is now finalising arrangements for the project.
 

The two new reactors at Belene will be 51% owned by NEK. The company is currently selecting a major investor from a shortlist of Belgium's Electrabel and RWE of Germany. Bulgaria's economy minister had set mid-2008 as the deadline to select the strategic partner.
 

Bulgaria's economy and energy minister, Petar Dimitrov, recently conceded during a television interview on Nova TV that funding "could not be secured." He added, "There are some candidates, but the most visible one is Vladimir Putin." During a visit to Sofia in January, Russia's ex-President, now its prime minister, said that Russia had earmarked €3.8 billion ($6.0 billion) in its budget for the construction of the Belene plant, should Bulgaria fail to secure funding any other way.
 

Dimitrov's comments came a few days after BNP Paribas, the French banking group selected to arrange financing for the plant, announced that it would not commit any of its own money to fund the project. The company said that it would act only as an adviser and would not act as a lead arranger in a syndicated loan.
 

Construction began on four reactors at Belene under plans drawn up by Bulgaria's communist government and the Soviet Union. Work on site began in 1987 but ceased in 1991, leaving some infrastructure available for reuse. Impetus to restart the project came when Bulgaria had to shut down two reactors at its Kozluduy plant in order to join the EU in 2007. The cost of the early shutdowns has been estimated at €3 billion ($4.4 billion), partly due to the lack of a surplus of electricity for export to countries such as Greece, Turkey, Serbia and Macedonia.
 

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