RWE mulls withdrawal from Belene nuclear power plant -Die Welt

Tuesday, April 22, 2008

German energy giant RWE is considering withdrawal from the race to buy 49 per cent in the company that will build Bulgaria´s second nuclear power plant at Belene, German newspaper Die Welt reported on April 20.

The newspaper quoted company sources as saying on April 18 that RWE would re-align the investments earmarked for buying the minority stake in the nuclear power plant to the acquisition of British Energy.

The shift in the energy strategy was reported to have been put up at a meeting of the supervisory board of the company over project safety concerns and doubts regarding the Russian technology, regardless of the fact that it has gained the approval of the European Commission.

Furthermore, German banks have reportedly given up on plans to finance the project because of environmental concerns and the technology´s potential threat. If RWE pulls out, this will be the second company after Electricite de France to withdraw from the tender.

RWE and Belgian Electrabel were shortlisted by project manager - the National Electricity Company (NEC) - as the finalists in the tender to pick the buyer of 49 per cent of the company that will operate the nuclear power plant. The operator is yet to be set up.

Sources close to the deal named RWE as the favourite because it offered to immediately invest 400 million euro and give a substantial premium for RWE´s preferred status. Currently, NEC is finalising negotiations with RWE and Electrabel, but runners-up are Germany´s E.ON, Italy´s Enel and the Czech CEZ.

Bulgaria wants the 2000-MW plant in the Danube town of Belene 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 in January 2007.

Nuclear energy accounts for one third of the country´s power needs and the local Government is among the EU countries, which believe nuclear energy is part of the solution to climate change, as proponents say atomic power emits almost no greenhouse gas emissions.

NEC would retain 51 per cent of Belene,which would be built by Russia's Atomstroiexport, controlled by gas company Gazprom, with France's Areva and Germany's Siemens as subcontractors. The construction costs have been set at four billion euro, but the total outlay on the project is expected to be closer to seven billion euro.

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