Russia will build a Bulgarian NPP at its expense

Within two years 1.9 bln EUR will be invested into the NPP. For this, Russia may receive up to 80% of shares of the plant. Bulgaria will have option to buy out this share, but if Sofia does not use it, Russia will finish construction of the NPP and retain it as its property. These investments may be repaid if the plant will sell its power at free market.
The Russian party within the nearest two years will invest funds into the NPP construction in Belen, Bulgaria, noted on Friday in Sofia head of «Rosatom» Sergey Kirienko. Now project of construction of two power units of total output of 2 GW is suspended due to absence of investor. Mr Kirienko noted that Russia is ready to provide the financing. In 2010–2011 investment of 1.9 bln. EUR is planned. Partially the money can be contributed «on temporary basis», this money should be repaid by investor which should be found by Government of Bulgaria. Russia is also ready to become shareholder in Belen, holding amount should be determined by Sofia which now controls 51% of shares of consortium for construction of the future NPP.
Money for construction of NPP in Belen should have been invested by Bulgaria and German RWE which held 49% of shares. «Atomstroyexport» (part of «Rosatom») acts as general contractor. The contract value made 3.99 bln EUR, but the price should have been adjusted according to inflation. However, RWE in autumn of 2009 left the project, and Bulgaria now is not ready to finance the project. Russia offered to Sofia loan for 2 bln EUR for continuing of construction, but Bulgaria rejected it.
Sergey Kirienko emphasized that he is sure in payback and profitability of the project. But, according to him, the construction should be started as soon as possible, since closedown and further re-opening of the site will need expenses. Bulgarian energy holding announced competition for selection of financial advisor which should within one and half or two years determine new scheme of financing and find the investor. But head of «Rosatom» declared that work can be started in March when «technical tuning» on conditions will be finished.
The new scheme will allow Russia to obtain control in Belen. Unless a new investor will be found and Bulgaria will manage to finance the construction, Moscow is ready to invest its funds, as reported by the source close to the negotiations. A variant is offered to Sofia in which for the period of construction Russia will receive up to 80% of shares of NPP in Belen. In case of failure to attract an investor, the rest 20% Bulgaria will finance at the end of the construction. Sofia will receive option to buy out the Russian share. But if it does not use it, Russia is ready to keep the plant in ownership.
In the bargain, Russia acts as a bank which provides funds to a company subject to loan conversion into shares in case of non-repayment of the funds, notes senior analyst of FC «Otkrytie» Pavel Popikov. Payback of the project, adds the analyst, depends on that whether the NPP will participate in electric power market. Current cost of NPPs is lower than that of heat power plants, that is why at equal market conditions margin of nuclear generation will be higher, explains Pavel Popikov. In September of 2009 Sergey Kirienko said that in 2015–2016, when the NPP should start functioning, price of kilowatt-hour in Bulgaria «according to the most pessimistic forecast» will make 6 eurocents, but he considers forecasts of European Union of 8 to 12 eurocents as more realistic.
Now 40% pf power balance of Bulgaria is provided by NPP Kozloduy of 2 GW output built under Soviet project in 1988–1993. In the nearest years closing of old power units is not planned, moreover, energy surplus in the country mat grow. Minister of economy, energy sector and tourism of Bulgaria Traycho Traykov in February said that construction of new power unit of 1 GW output in Kozloduy «was possible» and the country intended to study investors’ interest to this project. Senior analyst of IFC «Metropol» Sergey Beyden notes that Bulgaria will liberalize energy market since 2007. The country already has energy surplus, facilities reserve in 2008–2009 made about 37%, adds he, and the new NPP may export electricity.
But for Russia this project is also profitable because it will provide «Rosatom» with outlet market for fuel, adds Sergey Beyden. Source «Ъ» in nuclear branch says that negotiations on price of the fuel in Belen will continue during 2010 year. The price of fuel contracts for NPP is not disclosed, nut according to data from TVEL (produces fuel for domestic design reactors), in 2008 sales at markets of Eastern and Central Europe brought $400.6 mln. to the company.