RWE the winner in Belene contest

06 October 2008

German company RWE Power is set to take a 49% stake in Bulgaria's Belene nuclear power plant project following its selection as the preferred strategic partner by Bulgaria's National Electricity Company (NEK).


Petar Dimitrov (NEK) 
Petar Dimitrov makes the announcement
(Image: NEK)
A competition to select a strategic partner for the project was narrowed down to a shortlist of two - RWE and Belgium's Electrabel - earlier this year. According to a statement from NEK, both companies' offers 'significantly' met NEK's expectations, but RWE emerged as the preferred bidder after scoring higher than its rival in an assessment exercise based on criteria ranging from price considerations, through involvement in future plant operations, to decommissioning and waste management. The successful bidder will take a 49% stake in the company being set up to own and operate the Belene plant, with NEK retaining 51%.


According to Bulgarian energy and economy minister Petar Dimitrov, RWE is to invest an equity stake of €1.275 billion ($1.736 billion) in the project, as well as providing corporate credit of €300 million ($409 million). He also noted that RWE Power has offered to take a leading role in plant operation and maintenance. According to NEK board member Ivan Atanassov, RWE's €300 million corporate loan could be made available for the ordering of long lead-time plant components in advance of the financial closure of the deal, expected by the end of 2009.


The terms of NEK's decision permits RWE to invite other companies to become its partner in the project. Discussions with GdF-Suez are in progress and there is speculation a deal could involve that company's subsidiary, Electrabel. Such a move would enable RWE to hedge its risks.


Bulgaria was forced to close two of its four operating reactors at the Kozloduy nuclear power plant in 2006 as a condition of its accession to the European Union, but relies on the other two units to generate some 35% of its electricity. It is firmly committed to building a new nuclear power station at Belene to make up for the loss of capacity and exportable surplus generation from the reactor closures.


A contract to design, construct and commission two AES-92 model VVER units with V466 pressurised water reactors at Belene was signed with Russia's AtomStroyExport (ASE) in January 2008. With ASE as the main contractor, France's Areva and Germany's Siemens will be among the subcontractors for the construction project.


A ground-breaking ceremony at the Belene site was held on 3 September and attended by dignitaries including Bulgarian prime minister Stergey Stanishev as well as representatives of ASE, Areva and Siemens. Technical design approval of the reactors will be needed from the country's nuclear regulatory agency before construction can begin in earnest.