Strategic investor for Belene nuclear power project sought

Bulgaria is seeking a strategic investor for its revived Belene nuclear power project on the Danube River, which is estimated to cost at least €10bn. In a statement last Monday, the Bulgarian energy ministry said that it hopes to select an investor in the next year and has asked potential bidders to file letters of interest in the project to build two 1,000 megawatt nuclear reactors.

In parallel with that, the National Electric Company EAD (NEK EAD) has officially started off a tender for a strategic investor. The invitation to tender provides chances for showing interest in the minority participation in the prospective company and/or for buying out electricity from the future nuclear power station. The aim of the invitation is to provide information to bidders who would like to take part in the tender procedure, energy ministry reported.

Bulgaria will take part in the engineering company exploiting Belene NPP with a contribution in kind of the assets including a licensed site, delivered equipment, approved documents, licenses and other project-related documentation. The procedure envisions a series of conditions aimed at the maximum protection of Bulgaria’s interests.

Via NEK EAD, the Bulgarian State secures for itself the right for a “blocking quota” when taking decisions on certain issues in competence of the general meeting of shareholders in the engineering company. It is also envisioned that the nuclear facility will be built on market principle without conclusion of long-term contracts for electricity purchase by the State and provision of state investment guarantees.

The applications for bidding in the selection procedure for strategic investor and, respectively, for the minority stake in the engineering company may be sent in by both Bulgarian and foreign legal entities as well as associations. The deadline for applications is up to the 90th day starting from the date of the promulgation of the invitation for tender in the Official Journal of the European Union. The indicative term for the conclusion of the procedure is 12 months starting from the publication date of the current invitation.

Russia's state-owned nuclear company Rosatom, China's state-owned CNNC, France's Framatome - a unit of EDF and state-run Korea Hydro & Nuclear Power Co (KHNP) have expressed initial interest in the project. Bulgaria has been sitting on unused nuclear equipment since paying Rosatom more than €620m for scrapping the project seven years ago and in June its parliament ordered the government to revive the Belene project.

Sofia cancelled the project in 2012 after failing to find investors and facing pressure from the United States and the European Union to limit its energy dependence on Russia, which had been under contract to build the plant. Energy Minister Temenuzka Petkova said last year that Sofia would prefer an investor who plans to build the plant within eight years for about €9bn.

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