ECONOMY

Sofia sees keen rivalry among nuclear bids

SOFIA – Bulgaria expects tough competition among foreign energy utilities bidding to win a minority stake in its planned -4 billion nuclear power plant, a senior official said yesterday. The Balkan country is building two 1,000-megawatt reactors at the Danube river town of Belene to meet rising domestic power demand and regain its position as a leading exporter of electricity in Southeast Europe. «We expect difficult talks because the biggest power utilities in Europe are seriously interested… Obviously the competition among them will be serious,» Lubomir Velkov, the head of state utility NETC, which will control the new plant, told Reuters in an interview. Last week, NETC invited Italy’s Enel, Germany’s E.ON and RWE, Czech CEZ, France’s EdF and Belgium’s Electrabel, owned by French utility Suez, to file initial offers for a 49 percent stake in Belene by October 1. Velkov said he hoped a partner would be picked by the end of the year or early in 2008. Bulgaria’s choice of a partner will depend on the economic benefits, financing and management involvement that the successful bidder offers. NETC has also opened the door for Spain’s Endesa, Swiss energy firms EGL and Atel and the Bulgarian unit of Belgian copper refiner Cumerio, which are interested in stakes smaller than 25 percent, to enter the project. This would depend on approval from the key bidders and NETC itself. Financing Bulgaria, which closed two old 440-megawatt nuclear reactors as a requirement of its European Union accession treaty, believes nuclear energy would provide the emerging economy with power while helping it to cut greenhouse gas emissions. «Power consumption has been rising by 4 percent annually. By 2014, we will need at least 1,000 MW. Nuclear is the best option to keep the environment clean, too,» Velkov said. NETC has contracted Russia’s Atomstroyexport, controlled by gas company Gazprom, along with Germany’s Siemens and France’s Areva to build the new plant and it expects construction to start in the first half of 2008. The utility has secured a -250 million loan from BNP Paribas to finance the start of what is the Black Sea region’s biggest infrastructure project since communism fell in 1989. Velkov said the final financing, which could total -5 billion, will be arranged in parallel with choosing a strategic shareholder. NETC has already opened a tender to pick a bank to arrange long-term loans, possibly stretching over 15 years. Bulgaria will not provide state guarantees for the loans. But Velkov said that expected EU approval of the project, participation by a foreign shareholder and planned long-term power purchase agreements should make the financing relatively cheap. Bulgaria also hopes to get a -250 million to -300 million loan from EU’s Euratom agency.