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Enel to complete Slovak nuclear plant as demand grows

Enel SpA, Italy's largest utility and the owner of Slovakia's biggest power company, will finish building two nuclear reactors at the Slovak power plant Mochovce for about $2.4 bln, helping it meet growing demand for electricity in central Europe.

Slovak Prime Minister Robert Fico and Enel CEO Fulvio Conti announced in Bratislava today an agreement to complete Mochovce, a project that began 25 years ago. Enel bought 66% of Slovenske Elektrarne AS in April 2006 and took over two nuclear plants, Mochovce and Jaslovske Bohunice. Slovakia has agreed with the European Union to gradually close down Jaslovske. Economic growth in central Europe, the expected retirement of coal-fired plants and the closing of reactors in Slovakia and Bulgaria are increasing demand for power and driving prices up. Slovak power prices jumped about 18% from last year, in line with gains in neighboring markets. The decision is part of Enel's „need to invest abroad for growth,” said Amit Khanna, an analyst at HSBC Holdings Plc in London. „Enel is getting into a position in the nuclear industry to have low production costs” for future power generation. The stock fell less than 0.1%, closing at €8.225. Slovenske is not traded.

Enel's investment in Slovakia through 2013 will rise to 110 billion koruna ($4.2 billion) from 80 billion koruna, Conti said at the briefing. The investment may make Slovakia „a base” for power exports in the region, he said. „Since the economy is growing fast, the closure of Jaslovske Bohunice requires prompt action from Slovenske Elektrarne so the capacity is replenished,” he said. Mochovce's completion may cost about 63 billion koruna, Conti said. An estimated 20 billion koruna has already been spent on the project, according to earlier estimates by the Slovak government. Work began on Mochovce in 1982. It was plagued by delays, lack of financing and design changes. The design called for four reactors, each with capacity of 440 megawatts. The plant's first reactor was put in operation in 1998 and the second in 2000. Fico said construction for the two reactors could start in the H2 and the plant could be completed in about 5 years. The two additional Mochovce reactors would replace two 440-megawatt reactors closed at Jaslovske Bohunice. One of those reactors was shut last year and the other must close by the end of next year, according to agreements with the EU. Conti said the two new Mochovce reactors may offset shortfall from Jaslovske Bohunice and also produce electricity that can be exported. „We want Slovakia to be self-sufficient in energy production,” Conti said. „Since we are planning such a high amount of investment, there will be a potential to export energy to other countries in central Europe.” Fico said the government supports Enel's investment plan and will provide „maximum possible” assistance. He also said the possibility of Slovenske's building more nuclear plants „can't be ruled out.” (Bloomberg)