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RWE wins 49% stake in Bulgaria nuclear plant

  Bulgaria selected German utility RWE as a strategic investor in its planned €4.0 billion ($5.58 billion) nuclear power plant at Belene, the economy and energy ministry said on Friday.


RWE outbid Belgian energy company Electrabel, owned by France’s GDF Suez, for a 49% stake in the 2,000 megawatt plant, which the country is building to restore its position as a leading power exporter in southeastern Europe.

Bulgaria generates 37% of its power from nuclear energy and believes it is a key part of the solution to climate change as it emits almost no greenhouse gas. “(State power utility) NEK has put RWE on top of the list. It allows the company to invite Electrabel to join the project,” Economy and Energy Minister Petar Dimitrov told a news conference. NEK, which will hold a 51% stake in the plant on the Danube river town of Belene, began construction last month. Dimitrov said RWE would have to decide in the coming days whether to share its minority stake with the Belgian company. The issue should be clear before NEK and RWE sign a shareholder agreement by the end of this month, he added.

RWE is ready to put up to €1.275 billion into the company that will run Belene, out of a likely total of 2 billion, Dimitrov said. Dimitrov did not say whether the investment formed part of the proposed €4 billion capital expenditure of the Belene project.



Sources close to the process have told Reuters that RWE was likely to split the project with Electrabel to hedge the risk on the investment, which may exceed €6.0 billion due to rising building and financial costs. The German company confirmed it would now start talks with the Belgian firm. “We will start discussions with them as soon as possible,” said Holger Bietz, RWE’s head of mergers and acquisitions unit.

The government has contracted French bank BNP Paribas to advise it on raising funding for the project and Dimitrov said it should be structured by end-2009. Analysts say nuclear projects around the world face many hurdles and some may be even be abandoned because of high capital costs, difficulties in persuading banks to give loans to build them and uncertainty about future political support.

Finland’s fifth nuclear power reactor, seen as a test for Europe’s nuclear future, is more than two years behind schedule and well over budget. Sources familiar with Belene have said Bulgaria is also experiencing problems in raising funding for the project.

RWE has offered a loan of €300 million to help run the project before a total financing scheme is completed. The German utility will also give corporate and bank guarantees in line with its stake for the Belene’s financing, Dimitrov said. Dimitrov has said Sofia would prefer European banks to fund Belene but has not ruled out taking advantage of a proposal from Russia to provide a loan from its state budget.

NEK expects Belene’s two reactors to come online in 2013-14. It has contracted Russia’s Atomstroyexport, along with France’s Areva and Germany’s Siemens to build it. (Reuters)