Bulgaria Weighs Russian Dependence Against Suspending Belene

By Jacob Mazer, Assistant Editor, Fuel Cycle Week

Bulgaria must come up with €3.8 billion (US$5 billion) for its planned Belene nuclear power plant in order to avoid falling behind on the project, according to one of Belene's consultants. "The government should close a financial deal as soon as possible," said Djurica Tankosic of architect-engineer WorleyParsons. "We can be on track until the end of the year. After that, without funding, there will be a delay."

State utility NEK is working with 49% partner RWE on the proposed 1,000 MWe twin reactor station, which it hopes will return Bulgaria to its role as a major regional power exporter after the shutdown of two reactors at the Kozloduy plant as a term of accession to the European Union. Current plans call for Belene to begin operations by 2014-2015. Bulgaria awarded a €4 billion (US$5.2 billion) contract to Atomstroyexport to handle the construction, but the money has yet to materialize.

The two financing sources currently on the table are through the French bank BNP Paribas (which has provided loans for construction to this stage along with EURATOM), or using a loan from Russia. Bulgaria ruled out taking a Russian loan last year for fear of high interest and and even greater energy dependence on the larger country, who already provide much of Bulgaria's oil and gas. However, word is that BNP Paribas has little interest in continuing to finance the project in light of current economic conditions and doubts about the viability of the project.

Russia, on the other hand, is as eager as ever to step up. "It is a serious sum, several billion euros, but we will consider this possibility and I think we will be able to resolve this problem," Prime Minister Vladmir Putin said. Russia is eager to secure its hold on Bulgaria (and by extension, the region) through Belene, going as far as to ear-mark money for the project in last year's budget.

Bulgarian right-wing opposition party Union of Democratic Forces claims that putting the project on hold is preferable to taking Russia's money. Chairman Martin Dimitrov called on the parliament to prevent taking loans, claiming it would saddle the country with debt at a time when money is already scarce, as well as subjecting itself even further to Moscow's will. A temporary suspension of the Belene project is also advocated by leading opposition party GERB, who are projected to win July's parliamentary elections.

The argument is not entirely unconvincing. Belene is an important part of Buglaria's future, a fact acknowledged by UDF and GERB. "Furthermore, selling electricity generated by Belene to other countries in the region would strengthen the country's economy." But Russia has so consistently acted the bully, using its influence in the energy sector as a tool for political leverage, that the prospect of even more reliance is seems like a pretty risky proposition.

Bulgarian Prime Minister Sergei Stanishev seems open to taking the Russian loans, and is expected to talk about Belene during his visit to Moscow next week.