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RWE favored for Bulgaria nuclear stake-source

German utility RWE is poised to become the key investor in a planned Bulgarian nuclear power plant, a source close to the process said on Monday.

The country short-listed RWE and Belgian Electrabel, owned by France’s Suez for a 49% stake in the €4.0 billion($6.18 billion) plant at the Danube River town of Belene earlier this month. “RWE is the clear favorite for now,” the source, who asked for anonymity, said. “There are talks between the two bidders to see whether they can share the minority stake between them, with RWE having the leading role.”

Bulgaria wants the 2,000 megawatt nuclear plant to make the country a major electricity exporter in the Balkans again after it was forced to shut communist-era reactors as a condition of joining the European Union.

Last week, Bulgarian Economy and Energy Minister Petar Dimitrov said the process is advanced and a winner for a strategic partner in the plant, to be controlled by state owned utility NEK, could be picked within days. He said he expected to see whether the two bidders will sweeten their offers and to determine the stake they would like. The source said RWE has offered about €400 million ($618 million) in investment immediately so that the project to build two 1,000 megawatt reactors starts quickly. The source said the global credit crunch makes the financing of the plant, whose capital cost could reach €6 billion, difficult and RWE’s offer has played a vital role. Another source, who also asked for anonymity said RWE was looking into ways to take a partner. Dimitrov has said that NEK would choose a lead manager for the financing of the plant once it picks a strategic partner or partners for the minority stake.

Two French banks, Societe Generale and BNP Paribas, have expressed interest in structuring the debt for Belene, sources close to the process have said. Moscow had offered to finance the plant, but Dimitrov said the country was not looking into that option. NEK has contracted Russia’s Atomstroiexport, controlled by gas company Gazprom, along with France’s Areva and Germany’s Siemens to build the plant. The reactors are expected to come online in 2013-2014. (Reuters)