Economy Ministry Unveils Procedure for Selecting Investor to Build Belene N-plant
114 ECONOMY - BELENE - INVESTORS - PROCEDURE
Economy Ministry Unveils Procedure for
Selecting Investor to Build
Sofia, November 7 (BTA) - Energy Minister Temenouzhka Petkova unveiled a procedure for selecting a strategic investor to build the Belene nuclear power plant at a government session on Wednesday. At a briefing in the Council of Ministers, Petkova said she will enter the procedure in Parliament at first opportunity. She added that the procedure consists of nine stages which are expected to take 12 months to complete.
Parliament had given the Energy Minister until October 31 to draft an investor selection procedure and to propose the project's structuring. The parliamentary decision was for the project to be implemented entirely on a market basis, without a state or corporate guarantee and without long-term contracts for the subsequent purchase of electric energy by the State.
Potential shareholders will also be given an opportunity to participate in the project if they wish to obtain a minority stake in the future project company, said Petkova. Big electricity consumers in Bulgaria can be part of the project as well, through electricity purchase contracts. "This would make the project economically feasible and financially stable," the Energy Minister said.
The first stage of the procedure includes inviting potential investors through an announcement in the EU Official Journal and in two local dailies. According to the Energy Ministry, this invitation must also be sent out to companies that have officially stated their interest in the project. These are China's CNC, France's Framatome, and the South Korean state nuclear company. The project designer will also be invited, Petkova said.
The second stage will involve submission of an application by the aforementioned companies. Next, applications will be discussed, and shortlisted candidates will be invited to present a binding contract.
After that a confidentiality agreement will be signed by the potential candidates, followed by the development and provision of an informational project memorandum.
Then, the investors will submit binding offers and their vision about the development of the project as well as a financial model which will be assessed during the negotiations leading up to the final selection.
The last stage includes signing a shareholder agreement between the potential investors and, if any, between minor participants in the project company.
Legal analysis shows that the most successful way to structure the project would be participation in a separate project company with all shares related to the Belene N-plant project. These shares will be evaluated and their contribution to the new project company will be carried out in parallel with the discussions with the investors.
Conceived in the 1987, the Belene project was first discontinued for lack of funding in 1990, then suspended in 1997 as "technically unsound and economically unviable", revived in 2004 and suspended again as unfeasible in 2012 - but not before hefty investments were made in design and equipment. On June 7, 2018, the government of Boyko Borissov reversed the decision to abandon the project, complying with a parliamentary resolution to resume actions for seeking opportunities to build a second nuclear power plant in this country on a market basis (without government guarantees, preferential prices and power purchase guarantees).
Recent official figures show that as of June 30, 2018, the National Electricity Company, which owns the project, has invested 2.18 billion leva in Belene plus the land and equipment it has contributed (for a total of 78 million leva). LN/TH