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Bulgaria seeks solution for costly blowout for Belene nuclear power plant

Bulgaria seeks least worst outcome for Belene nuclear fiasco BME IntelliNews,  By Clare Nuttall in Bucharest August 25, 2016 More than two months after an international court ruled Bulgaria must compensate Russia’s Atomstroyexport for work carried out on the Belene nuclear power plant, Prime Minister Boiko Borissov’s government is still struggling to find ways to minimise the financial damage from the project, which was cancelled back in 2013.

A Geneva-based court under the auspices of the International Chamber of Commerce ruled on June 16 that Bulgaria’s state National Electricity Company (NEK) must pay €550mn to Atomstroyexport, a unit of Rosatom, for the nuclear reactor the Russian company has already produced.

While the figure is lower than the €1.2bn sought by Atomstroyexport, it is a substantial sum for Sofia, when taken in combination with the €708mn Bulgaria has already sunk into the project. In addition, Bulgaria faces a bill of around €170,000 in penalty interest per week.

In an analyst note issued after the ruling, Timothy Ash of Nomura wrote that the order to pay compensation was a “significant blow to Bulgaria, with a cost of well over 1% of GDP eventually likely to fall on public finances”.

The options for the Bulgarian government are limited; far from finding the optimal solution for the country, it is a case of searching for the least costly and damaging outcome……..

White elephant

The third option put forward by Sofia is instructing the country’s privatisation agency to sell the project to private investors, who would then complete it with the help of the state. Again, it is questionable how realistic this is – there have long been doubts as to whether Bulgaria needs additional generation capacity. However, on August 24 Novinite reported that Energy Minister Temenuzhka Petkova had met with representatives of China General Nuclear power Group (CGN) to discuss Belene, reportedly at the request of the Chinese company………

Reviving the project could therefore be a case of throwing good money after bad, as Sofia invests yet more money only to end up with a costly white elephant power plant. This is the argument put forward by Greenpeace Bulgaria, which campaigned against Belene together with several other environmental NGOs.

“The government is trying to find a pretty way out of the situation but in reality there is no accountability for the over €1bn spent on this project,” Greenpeace Bulgaria spokesperson Denitza Petrova told bne IntelliNews. She claims that Belene “has never been economically viable … There will be no private investor in it as it is risky and useless, and will not pay off the investment.”……..http://www.intellinews.com/bulgaria-seeks-least-worst-outcome-for-belene-nuclear-fiasco-104739/

August 26, 2016 - Posted by | Bulgaria, business and costs, politics

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