Bulgaria scraps nuclear deal with Westinghouse

By bne IntelliNews April 2, 2015

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Bulgaria has scrapped plans to expand its sole nuclear power plant after it failed to reach agreement with supplier Westinghouse on financing for the project, Prime Minister Boyko Borisov said on April 1.

The previous Socialist-led government signed a preliminary deal on the project with Westinghouse Electric Company in August 2014. However, Borisov’s centre-right government then set March 31 as the deadline to decide whether to go ahead with the plan.

The project envisaged the construction of a 1,000MW reactor at the Kozloduy nuclear plant on the Danube River. The plant currently operates two Soviet-made 1,000MW reactors that supply 30% of the country’s power. Kozloduy’s older reactors were shut in the run-up to Bulgaria’s entry to the EU in 2007.

The Bulgarian government had invited Westinghouse to take a 49% stake in the new nuclear unit but the US-Japanese firm refused to invest in the deal, Borisov told the Bulgarian parliament on April 1. The prime minister said the country cannot afford to finance the deal unless Westinghouse joins as a strategic investor.

“Yesterday the deadline to confirm the contract with Westinghouse for the construction of the seventh block of NPP Kozloduy, which the previous government signed, expired,” Borisov wrote on his Facebook page. “We are ready to work on the agreement if Westinghouse comes in as an investor and the project is profitable,” he added.

Westinghouse announced on August 1, 2014 that it had signed a shareholder agreement on the Kozloduy expansion, under which it would provide equipment, design, engineering and fuel for the plant. The company also announced that it would launch a competitive tender for the plant’s construction within the next year. The plant was due to be operational by 2023.

The cost of the project was not officially disclosed. After the deal was signed in August 2014, Bulgaria’s then interim energy minister Vassil Shtonov said it would cost an estimated $8bn. However, according to the Bulgarian media, a senior Westinghouse official later said the cost was only expected to be around $5.2bn. Westinghouse has not commented on Borisov’s decision to scrap the project.

The Kozloduy expansion is the second major project to increase Bulgaria’s nuclear power generation capacity to have flopped.

Atomstroyexport, a subsidiary of Russia’s Rosatom, agreed back in 2006 to build the new Belene Nuclear Power Plant, and a deal on the construction of the plant was signed during Russian President Vladimir Putin's visit to Sofia in January 2008. However, the start of construction work was repeatedly delayed amid disputes between Bulgaria and Russia over the cost of the project, and the decision of German strategic investor RWE to withdraw.

Belene was finally scrapped by Borisov’s previous government in November 2012. After the government resigned, the decision was confirmed by the Bulgarian parliament, which voted in February 2013 to permanently abandon the project in favour of building a new unit at Kozloduy.

Bulgaria already produces considerably more electricity than it consumes - in 2012 the country generated 43.7bn kWh of power, of which 31.2bn kWh was consumed domestically, according to EIA data. This has allowed Bulgaria to establish itself as one of the Balkan region’s main power exporters, selling electricity to countries including Greece, Serbia and Turkey. 

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