US reportedly close to securing Bulgarian nuclear deal

By bne IntelliNews July 3, 2014

Clare Nuttall in Bucharest -

 

US-based Westinghouse Electric is close to sealing a deal worth JPY500bn (€3.6bn) to build a nuclear reactor in Bulgaria, Japanese reports said on July 2.

The subsidiary of Japan's Toshiba is in the "final stages" of talks on the project, the Nikkei business daily reported, without citing sources. The mid-sized reactor is expected to be completed by 2025. Westinghouse may also buy into Bulgarian Energy Holding as part of the deal. 

A Toshiba spokesperson in Tokyo told AFP later that the two sides are closing in on a deal, but added that talks "are still continuing and no details have been decided yet".

Toshiba and Westinghouse entered exclusive talks with the Bulgarian company on the construction of a seventh unit at the Kozloduy nuclear power plant in December. However, the Bulgarian government announced last month that Toshiba had withdrawn from the project, leaving its US unit Westinghouse to go it alone. 

Toshiba and other Japanese engineering companies have been looking for nuclear energy projects abroad, after Tokyo decided to cut its reliance on nuclear energy after the 2011 Fukushima disaster. Since then, Toshiba has received orders for three reactors in the UK, but the Bulgarian project would be its first in eastern Europe. 

While several European countries including Germany have, like Japan, backed away from investment in nuclear power, several eastern EU states continue to look to nuclear energy. Projects are under discussion in the Baltics, Poland, the Czech Republic, Slovakia, Hungary and Turkey. 

Bulgaria wants to boost energy generation and increase its export potential. Bulgaria currently has two nuclear reactors in operation that generate around 35% of its electricity, according to the World Nuclear Association. Although it is still a net exporter, exports have dropped since 2006, when older reactors at Kozloduy were shut down. 

Although progress is slow in most cases, the push to develop nuclear power puts CEE yet again in the middle of competition between the West and Russia for the lucrative projects. Sofia had previously contracted Atomstroyexport - a subsidiary of Russia's Rosatom - to build a 2,000-MW nuclear power station at Belene. However, Bulgaria dropped the €10bn project in 2012 after failing to raise enough investment. Atomstroyexport has since taken Bulgaria to international arbitration, claiming €1bn in compensation. 

In addition to seeking to boost nuclear energy generation, Bulgaria is looking to secure stable supplies of gas. Sofia was dismayed by the EU's recent order for member states to suspend work on the South Stream pipeline, that is planned to carry 63bn cubic metres of Russian gas to Europe, bypassing Ukraine. Despite its protests however, the Bulgarian government has, for the meantime, fallen into line with Brussels' stance.

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