Belene investors framework

01 December 2010

A previous version of this story stated that Rosatom would take 49% of the Belene Power Company. This was not actually stated in the MoU.


Bulgarian and Russian interests have agreed to take major stakes in the two-reactor Belene project, while suppliers could take equity under an in-kind arrangement. 


A memorandum of understanding completed in Sofia on 30 November marks a new phase for the long-running and so-far unsuccessful Belene project.


Almost exactly three years ago Bulgaria's National Electricity Company (NEK) agreed to develop the new nuclear power plant with AtomStroyExport of Russia after a competitive tender process. A contract for engineering, procurement and construction followed in January 2008. NEK and the Bulgarian government tried unsuccessfully to reach terms with RWE as a major shareholder after attracting a strong roster of interested parties from the large utilities or Europe.


The new arrangement will see NEK take 51% of the project company, Belene Power Company. Both it and Rosatom are then required to arrange debt and equity finance and attract other investors. NEK's stake is far beyond the 20% it hoped to have under previous finance schemes.


According to terms in the MoU the project company should be established and registered within six months and construction should start after ten months - by 30 September 2011. The aim is to bring the first reactor into operation by 2016 and the second by 2017.




One notable term in the MoU allows for the inclusion of in-kind contributions from suppliers to the capital of the project company. While NEK will have the negotiated value of the plant site as an in-kind equity contribution, another firm has already taken the in-kind route to involvement - Fortum of Finland.


Fortum announced its own MoU with Rosatom and NEK under which it would supply "competences in nuclear technology and safety." In relation to these services, Fortum noted, it "has reserved an opportunity to obtain a 1% share of the project company and will be the owner of the power plant and the electricity generated by it."


Fortum wanted to build a new reactor at its Loviisa site on Finland's south coast, but was denied the opportunity by the government's decision in principle earlier this year. Instead, Teollisuuden Voima Oyj and Fennovoima were given the chance to build.


A 1% stake in Belene would amount to only about 20 MWe of capacity - enough to produce about 165,000 MWh per year. However, being an equity holder would afford Fortum detailed knowledge of the project and a good chance to invest later when project risks are lower.


The idea of in-kind equity for nuclear equipment and service suppliers is unusual but gives fresh opportunities to find investors outside the usual realms of power and finance. The announcement also goes some way to clarify unsubstantiated reports of interest in the Belene project from the German region of Bavaria. Considering its intention for a long-term partnership with Rosatom, Siemens is likely to supply Belene's two large steam turbines and generators as well as control equipment.
Researched and written
by World Nuclear News