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RWE withdraws from Bulgarian nuclear plant project

RWE withdraws from Bulgarian nuclear plant project

German utility RWE AG has announced its withdrawal from a joint nuclear plant project due to problems with its financing, Bulgarian energy officials said on Wednesday.
Galina Tosheva, head of Bulgaria's energy holding, said that RWE was pulling back because of the global financial crisis and uncertainty about the funding of the project. Deals on the contruction contractor and finance had not been reached.
"The two main reasons are the financial crisis and the failure to complete two of the stages of the project: signing a final agreement with the contractor and financial structuring of the project," Tosheva was quoting a RWE letter as saying and added that "RWE does not owe Bulgaria any penalties for its withdrawal."
Last year, RWE outbid rival Belgian energy company Electrabel, owned by France's GDF Suez, SA, for a 49 percent stake in the Belene Power Company, which will own and operate the new nuclear power plant.
The state-owned NEC power utility was to hold the remaining 51 percent in the 2,000 megawatt plant.
The construction of the plant was scheduled to start this year and its two reactors were expected to come into operation by 2014.
In 2008, Bulgaria signed a nearly ⁈ion ($6 billion) contract with Russia's Atomstroyexport to build the second nuclear plant at Belene, 250 kilometers (155 miles) northeast of Sofia.
Atomstroyexport was supposed to be the main contractor, using France's Areva and Germany's Siemens AG as primary subcontractors.
But Bulgaria's new center-right government, which won July elections, put the project under review due to rising costs which it estimates at up to euro10 billion ($15 billion). Tosheva said that now a consultant will be hired to help decide how to go on.
"We are dealing with a completely new situation and we have the opportunity to reconsider and restructure the project and put it on a new basis," said Tosheva, putting the period for restructuring at a year and a half.
Bulgaria has rejected a credit offer from Russia and has said it was ready to cut its 51 percent stake by more than a half to attract potential investors.
Bulgaria invested more than $1 billion in Belene, but froze the project in 1990 after environmentalists said it could pose a safety risk.
The project was revived to compensate for the closure of two units at its existing nuclear plant at Kozlodui. The closure was part of the requirements Bulgaria had to meet to join the European Union in 2007.


Updated : 2021-06-14 14:38 GMT+08:00