Банкеръ Weekly



The incantation Second N-Plant may turn out to be the most successful political move of the Premier and leader of the newest Bulgarian party Simeon Saxe-Coburg-Gotha after April 6. And from the site of Kozlodoui N-plant the Head of State Georgi Purvanov clearly stated that units I and II of the Nuclear Power Station should be mandatorily decommissioned by the end of 2002, i.e. as the former government had promised in written back in December 1999. However, Mr. Purvanov gave a chance to the two reactors and advised the Cabinet that after closing down units I and II they should be modernized and rendered safe to a level, complying with European requirements. Afterwards Kozlodoui should apply to the nuclear regulatory body - the Committee for Peaceful Uses of Atomic Energy (CPUAE) - for a new licensing and put them into operation again. The same thing was recommended by the BANKER weekly in the beginning of March. According to the newspaper, however, it would be good to seek also independent audit for the reactors' safety from foreign nuclear experts and require the stance of the International Agency for Atomic Energy (IAAE) after that. But for the success of such an operation, the country should first of all give up the money from the European Union (EU), earmarked for closing the N-plant, President Purvanov recommended.However, in 1993 Slovakia did the same thing, and not only saved its nuclear power engineering but also improved it. And while feelings regarding Belene N-plant were running high, the debate on Kozlodoui's units III and IV seemed to calm down, probably in expectation of April 18 when the national report on Bulgaria's nuclear power engineering will be discussed. The report will focus on these two units, and the available preliminary information gives hopes.Meanwhile, a number of facts on the Belene N-plant, some of them quite contradictory, were made public. The Minister of Power Engineering and Energy Resources Milko Kovachev announced that the Russian company Atomenergoproect, the Canadian ARCL, US and European consortia, were interested in the construction of the second Bulgarian N-plant. Afterwards, however, Mr. Kovachev made the reservation that the talks were only preliminary without any agreements whatsoever.The Government's stance, noisily made public this week, is that the candidates should take the market risk themselves. This would certainly damp the ardour of many of them. The more so, that the energy market in the region has not been studied. The forecasts about the general economic situation in the neighbouring countries are not clear either. The Balkan region as a whole is still a territory with many uncertainties and a deficiency of electricity, 40% of which is presently covered by Bulgaria.After setting up a common electricity market in the region, competition will become severe. Romania has already commissioned a 1,000-megawatt nuclear reactor in Cherna Voda and is preparing a second one by 2004.Russia's and Ukraine's offers for sale of electricity in the region will be guaranteed, at that at several times lower prices than the Bulgarian. In 2002 Russia is exporting electricity to Turkey's Asian part at USD002.2/kWh, while Bulgaria sells it at USD003.5/kWh. This renders any investment in Bulgarian production capacities quite risky.The only possibility for decreasing the risk is to attract buyers as eventual investors or creditors of energy projects. Turkey is the country with the greatest deficiency of electricity in the region. In end-February Romania's Prime Minister Adrian Nastase announced that by 2004 the country would invest USD4BN in power engineering, and afterwards invited Turkish businessmen to credit construction, promising them future supplies at preferential prices. At that background Bulgaria is lagging behind. During the week the former chaiman of the energy committee Nikita Shevarshidze said that only real opportunity for building new nuclear power capacities in Bulgaria is by a Turkish-Russian-German consortium.

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