Bulgaria Caps Belene Nuclear Plant's Cost at $8.8 Billion, Borissov Says

Bulgaria aims to limit the cost of the Belene nuclear plant being built by Russia’s ZAO Atomstroyexport to 7 billion euros ($8.8 billion), Prime Minister Boiko Borissov said.

Borissov met today with Russia’s First Deputy Prime Minister Viktor Zubkov in Sofia to discuss joint energy projects including construction of the 2,000-megawatt power plant on the Danube river, natural-gas supply and the South Stream gas pipeline from Russia to Western Europe via Bulgaria.

“I hope the cost of Belene will not exceed 7 billion euros by the time it is completed, as we agreed with the Russian counterparts today,” Borissov told reporters after the meeting.

The two countries agreed to work out by September the future electricity rates and a detailed financing plan for the project. The two-reactor plant, budgeted at 4 billion euros in 2005, was delayed as funding dried up because of the global financial crisis.

Bulgaria is seeking a strategic European investor in the plant, Borissov said. RWE AG, Germany’s second-largest utility, withdrew in 2008 after the government changed and Bulgaria stopped funding construction.

Gas Negotiations

The first reactor will be built by mid-September for delivery to the site. Bulgaria has to pay an installment of 280 million euros then in addition to 300 million euros already paid, Borissov said. Atomstroyexport was chosen in 2005 to build the plant, with Areva SA and Siemens AG as subcontractors.

Officials from Bulgaria’s dominant gas trader Bulgargaz AD will travel to Moscow on July 8 to negotiate a new supply contract as the current one expires this year, Borissov said. OAO Gazprom sells Bulgaria gas through three units, which the country seeks to eliminate in the new contract.

“We expect a favorable decision on the gas price by Russian Prime Minister Vladimir Putin,” Borissov said.

Gazprom sells Bulgaria gas at an average price of about $339 per 1,000 cubic meters, Zubkov said at the briefing. It is sold in Bulgaria at a higher price, he said.

Bulgaria agreed to speed up work on South Stream, the Gazprom-led pipeline that will cross the Black Sea from Russia to Bulgaria and carry gas to Italy and Austria, Borissov said. A feasibility study on the project is underway, he said.

“There are no open questions left on South Stream,” Borissov said, “In 2015 the pipeline should be a fact.”

To contact the reporter on this story: Elizabeth Konstantinova in Sofia at ekonstantino@bloomberg.net

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