Bulgaria's new government to support Belene

21 July 2009

Following the landslide victory of the right-of-the centre Citizens for European Development (GERB) led by Boiko Borisov, the Belene nuclear power plant is expected to come back on track.


"Belene needs to be built, as simple as that," said Boyko Borissov, the new Bulgarian prime minister who will take power on 27 July, despite his party's calls for a freeze on the project while in opposition.


Under the new GERB government, the ministries of energy, transport and communications are expected to be merged, thus enabling Borisov to slim down public spending after breaking down the existing economy and energy ministry headed by Peter Dimitrov. The economy ministry will run as a separate body, but while Borisov has already named most members of his cabinet, the seat of the new energy minister is still empty.


Vladimir Uruchev, a member of the European Parliament and the party's leading energy expert, is one of the candidates for the post in GERB's new government. He said: "The new Bulgarian government is unlikely to extend state guarantees for Belene and will seek private funding for the €4 billion ($5.6 billion) project."


"Belene is definitely a strategic project for our country, which will meet our long-term power demand needs," Uruchev continued. "It should go ahead in a package with the renewable energy sources and should be number one priority of the Bulgarian energy policy, but the government must not hurry to take any loans in times of financial crisis."

The project is to be 51% owned by the National Electricity Company (NEK), with the remainder taken by RWE, but both have struggled to find financial partners. BNP Paribas, which has been among the parties involved in co-ordinating Belene's funding for over two years, has not succeeded in attracting new investors, although Sergei Stanishev's outgoing socialist government secured offers of €3.9 billion ($5.5 billion) from Russian banks.

But according to Uruchev, taking Russian loans to build Russian reactors would not in Bulgaria's interests, given the Black Sea nation's near full dependence on Moscow for its gas and oil. Uruchev believes suitable investors will be found in time to complete the two new reactors by 2014-2015.


Earlier, Galina Tosheva, executive director of the Bulgarian Energy Holding group of the country's top energy assets, said she has requested an increase of the state guarantees to €600 million to polish the project's image and attract risk-averse banks.


"The Bulgarian government already has a €200 million ($285 million) commercial loan from BNP Paribas, 90% of which it has already spent", said Stanislav Georgiev, first secretary of Bulatom, the Bulgarian association of nuclear power companies. "I am very optimistic about Belene," he added, noting that the slated cost includes inflation during construction and is in line with all similar projects across the world.