A project company will be established within the next 10 days for the construction of Unit 7 at the country’s only existing nuclear power plant in the Danube town of Kozloduy, the country’s Economy and Energy Minister Delyan Dobrev said Monday.

Currently, a working group is developing a road map for the project. Once the working group has created a project company, the project company will start looking for a strategic investor.

The project company will have an initial capital of several millions of BGN, Dobrev has explained.

Bulgaria’s government recently decided to start the construction of a new reactor in Kozloduy after it gave up on the construction of what was supposed to be the country’s second nuclear power plant in Belene. Thus, the Bulgarian government decided to install in Kozloduy the 1000 MW reactor that the Russian state company Atomstroyexport already produced for the Belene NPP.

On Monday, Dobrev pointed out that the establishment of a project company will guarantee the Kozloduy NPP‘s safety and financial stability. He noted that a project company that would have been responsible for investment risks was not created when the Belene project was launched.

The Kozloduy NPP has started the first phase of the procedure to extend the life of its two 1000 MW reactors by 20 years.

After the installation of Unit 6, the newest one, in 1991, the Kozloduy NPP reached a total production capacity of 3 760 MW. Currently, however, the capacity of the plant is down to 2000 MW after Bulgaria shut down the 440 MW reactors 1-4 in 2002 and 2006 at the insistence of the EU as part of the country’s EU accession negotiations.

Unit 5‘s life is to end in 2037, and Unit 6‘s – in 2019, but these dates are to be pushed back by 20 years if the program is implemented successfully.

Bulgaria’s only operational nuclear power plant in the Danube town of Kozloduy has started the first phase of the procedure to extend the life of its two 1000 MW reactors by 20 years.

The Kozloduy NPP has made a contract with a consortium of RosenergoatomRussia and French company EDF formally called Consortium OAD “ConcernRosenergoatom” (Russia) – EDF (France) for complex surveying and appraisal of the resources and equipment of the two operational reactors, Units 5 and 6, announced the CEO of the plant Alexander Nikolov at a joint news conference with Bulgarian Prime Minister Boyko Borisov and Finance Minister Simeon Djankov.

Back in 2011, the Bulgarian government started a tender to extend the life of the reactors, at least until 2035. Back then reports said the most likely winner of the tender for the modernization of the Kozloduy NPP is a consortium ofRosenergoatom Russia and French company EDF.

After the installation of Unit 6, the newest one, in 1991, the Kozloduy NPP reached a total production capacity of 3 760 MW. Currently, however, the capacity of the plant is down to 2000 MW after Bulgaria shut down the 440 MW reactors 1-4 in 2002 and 2006 at the insistence of the EU as part of the country’s EU accession negotiations.

Nikolov made it clear that the plant is now to comply with the conditions of the licenses of Units 5 and 6 issued by the Bulgarian Nuclear Regulation Agency, and will draft and implement a program for preparing to extend the life of the two reactors.

Unit 5‘s life is to end in 2037, and Unit 6‘s – in 2019, but these dates are to be pushed back by 20 years if the program is implemented successfully.

The program in question is to be implemented based on the results of the survey to be conducted by Rosenergoatom and EDF. Once it is implemented, the KozloduyNPP will be able to request from the Nuclear Regulation Agency in Sofia new licenses for the operation of Units 5 and 6.

The issue about extending the life of the two reactors has become especially acute as the Borisov Cabinet decided in March 2012 to abandon the project for the construction of a second Bulgarian NPP, which was supposed to be located in another Danube town, Belene. It has already moved to install in Kozloduy (as Unit 7) the Russian made 1000 MW reactor that was destined for Belene.

www.novinite.com

Russian nuclear energy company Rosatom‘s price offer for Bulgarian Belene NPP is spectacularly low and Bulgaria should hasten to accept it, said Rosatom‘s vice-director Kirill Komarov.

“Taking into account the raging economic crisis in Europe, we have made a very attractive proposal for Belene. It is hard to believe that we will ever make such a unique proposal to another country,” said Komarov as reported by the Bulgarian National Radio Tuesday.

The Bulgarian and Russian parties have been long disputing the final price for the Belene NPP, with Bulgaria arguing that Russia‘s proposal of EUR 6.3 B is way to high, and setting a ceiling of EUR 5 B.

“Given our proposal, Bulgaria will have to invest not a penny more than it already has, getting in return 51% ownership over a brand new NPP,” commented Rosatom‘s vice director.

www.novinite.com

Bulgaria has demanded that Belene nuclear project is frozen for another three months as of July, the energy and economy minister announced on Friday.

“We have proposed a three-month delay so that we have time to catch up with the so-called back office work,” Minister Traicho Traikov said at a conference about the energy infrastructure, which is taking place in Sofia.

“We need additional information about the cost of the project, because what we have received so far from the Russian side has not been satisfactory,” said Traikov.

He added that negotiations for a new contract with Moscow for the construction of Belene can continue even while the project, which has hit a snag over safety, financial and price concerns, is frozen between July and September.

Asked by journalists whether Bulgaria faces the risk of being taken to arbitration by the Russian contractor Rosatom as it is likely to miss the July 1 deadline for signing a final agreement for its construction, Minister Traikov said:

“The arbitration is not a risk, it is an option.”

The 12th annex to the main contract between Bulgaria and Russia on the construction of two 1,000 megawatt nuclear reactors at Belene, in the north, will expire at the end of June.

The Bulgarian side apparently wants to steer clear of rushing for last-ditch effort in the negotiations with the Russian state nuclear corporation Rosatom for the fate of the Belene nuclear power project.

The annex triggered a huge scandal at the beginning of April after the head of the national utility company NEK Krasimir Parvanov signed an agreement with Rosatom‘s subsidiary Atomstroyexport that potentially threatens Bulgaria‘s national interests by obliging the Bulgarian government to reach a final agreement with the Russians on Belene by July 1, 2001.

Traikov slammed Parvanov and announced he is going to be fired, but the dismissal was later overturned by Prime Minister Boyko Borisov.

Borisov harshly criticized the Energy Minister’s hasty and emotional reaction and threatened him with being kicked out of office.

It turned out that Parvanov has coordinated his actions with Deputy Prime Minister, Simeon Djankov, who oversees finance and economy.

The signed document stirred heated debates in Bulgaria as it came before the two sides agree on the price of the project and conduct safety checks.

Bulgaria and Russia are unable to agree on the major bone of contention - the price for the construction of the 2000-MW Belene NPP.

Russia says the project construction price should be EUR 6.3 B. The Borisov government wants to set the price at as little as EUR 5 B.

After it was first started in the 1980s, the construction of Bulgaria‘s second nuclear power plant at Belene on the Danube was stopped in the early 1990s over lack of money and environmental protests.

After selecting the Russian company Atomstroyexport, a subsidiary of Rosatom, to build a two 1000-MW reactors at Belene and signing a deal for the construction, allegedly for the price of EUR 3.997 B, with the Russians during Putin’s visit to Sofia in January 2008, in September 2008, former Prime Minister Stanishev gave a formal restart of the building of Belene. At the end of 2008, German energy giant RWE was selected as a strategic foreign investor for the plant.

The Belene NPP was de facto frozen in the fall of 2009 when the previously selected strategic investor, the German company RWE, which was supposed to provide EUR 2 B in exchange for a 49% stake, pulled out.

In mid-March 2011, apparently acting on concerns caused by the situation in Japan‘s Fukushima NPP after the recent devastating earthquake there, the European Commission confirmed that it wants to reexamine the Belene NPP project – once Bulgaria finds an investor for it – even though it already approved it back in 2007.

The Bulgarian government has signed a consulting contract with UK-based company HSBC for the financial analysis for the project for the construction of the Belene nuclear power plant.

Bulgaria‘s Cabinet and Prime Minister Boyko Borisov in particular have made it clear that the results from HSBC’s financial appraisal of the Belene project, i.e. whether it is economically feasible, will be decisive with respect to the government’s final decision on whether to go ahead with the project whose price has been a bone of contention with the selected executer, Russian state corporation Rosatom.

Bulgaria will be paying HSBC EUR 2 M for its services plus 0.95% of the end price of the Belene NPP if it is realized, according to media reports confirmed later on Tuesday by Bulgarian Economy Minister Traicho Traikov.

This means that if HSBC declares the Belene NPP project to be economically feasible, and it is constructed, it will get a fee of EUR 47.5 M if the plant costs EUR 5 B.

Subsequently, Vladimir Karolev, an economist, who according to Traikov, is working with HSBC in Bulgaria, explained for the Dnevnik daily that the non-flat fee that HSBC will get will be 0.95% of the foreign investment capital attracted for the project, which can come from anywhere, including from the Russian state corporation Rosatom.

The Bulgarian government’s contract with HSBC itself was sealed late Monday night via fax, according to the Ministry of Economy, Energy, and Tourism.

The HSBC experts will be doing their work on the financial appraisal of the project for Bulgaria‘s second NPP in London but are also expected to visit Bulgaria within the two-month deadline that they have to complete their work as last Bulgaria‘s National Electric Company NEK and Rosatom subsidiary Atomstroyexport signed a 12th annex to their expired agreement stipulating that a decision about the fate of the Belene project should be arrived at by June 1, 2011.

The consulting company is supposed to analyze the project thoroughly and advise the Bulgarian government regarding its final price as well as its potential restructuring. Under the consultancy contract, HSBC is also supposed to participate in the search for strategic investors for Belene as efforts of the Borisov Cabinet have not proven very successful in that regard.

The Bulgarian Energy Holding, the parent company of NEK, picked in November 2010 HSBC, one of the world’s biggest banks, for a consultant to help it decide whether the project is economically feasible.

Six candidates had submitted documents to bid in the tender opened by the Bulgarian Energy Holding for Belene consultant – HSBC, Societe Generale, KPMG in a consortium with McGuire, Rothschild, Argil, and Ernst & Young.

“With this step the project enters a crucial stage. The conclusions of the consultant will be the answer to the question whether or not Belene nuclear power plant will be built,” Bulgarian Economy and Energy Minister Traicho Traikov said on Sunday regarding the signing of the consultancy contract with HSBC.

The statement comes just days after Traikov drew the ire of Prime Minister Boyko Borisov after he slammed and dismissed the National Electric Company head Krasimir Parvanov for signing an agreement with Rosatom‘s subsidiary Atomstroyexport that potentially threatens Bulgaria‘s national interests by obliging the Bulgarian government to reach a final agreement with the Russians on Belene by June 1, 2001.

The plant was originally to be built by Russian company Atomstroyexport for EUR 4 B, plus “escalation costs” including inflation and other factors – a condition accepted by the Stanishev Cabinet (2005-2009); the Borisov Cabinet, however, has demanded a firmly set price from the very beginning apparently afraid that the Russians might demand more money using the escalation costs clause.

The firm had signed a contract with the previous, Socialist-led government, swept from power by Borisov’s conservative GERB party swept in last year’s July elections.

Due to the delays in the launch of the construction works, stalled over price disputes and funding problems, Russia now says the project construction price should be increased to EUR 6.3 B, while Bulgaria‘s government has been haggling for a price as low as EUR 5 B.

Bulgaria‘s new center-right government suspended the construction of the nuclear power plant last year until it finds a new investor and funds to complete the project at Belene, on the Danube, 180 km northeast of the capital Sofia.

In November 2010, shortly after a visit to Sofia by Russian PM Putin, Bulgaria‘s National Electric Company NEK and Russian state company Rosatom signed a memorandum providing for a final fixed price for the two reactors of EUR 6.298 B.

According to the non-binding memorandum expiring on March 31, 2011, Bulgaria‘s NEK will have a share of 51% in the Belene NPP, Rosatom – a share of 47%, Finnish company Fortum – a share of 1%, and French company Altran Technologies – a share of 1% with an option to increase it. Serbia has expressed interest in acquiring a share of 5%-10% but the talks for that have not been finalized yet.

After it was first started in the 1980s, the construction of Bulgaria‘s second nuclear power plant at Belene on the Danube was stopped in the early 1990s over lack of money and environmental protests.

The Belene NPP was de facto frozen in the fall of 2009 when the previously selected strategic investor, the German company RWE, which was supposed to provide EUR 2 B in exchange for a 49% stake, pulled out.

In mid-March 2011, apparently acting on concerns caused by the situation in Japan‘s Fukushima NPP after the recent devastating earthquake there, the European Commission confirmed that it wants to reexamine the Belene NPP project – once Bulgaria finds an investor for it – even though it already approved it back in 2007.

www.novinite.com