Eleven banks have bid to lend 250 million euro for Bulgaria’s Belene nuclear power station project, but the names of the banks have not been disclosed.
The media office of national power utility the National Electricity Company (NEC) said on March 7 said that 11 bids had been received by the March 5 deadline. The banks had requested that their identities not be disclosed. The Public Procurement Act provides for the names of bidders to be kept confidential, the NEC said.
A decision on the bid for the loan, which is to be used for the design, delivery of equipment, installation and construction of the first year of the nuclear power station project, is expected by the end of March.
Bulgarian daily Dnevnik reported on March 7 that the NEC planned to soon launch a procedure to choose a strategic investor for the nuclear power station project. The newspaper said that Italy’s Enel, CEZ of the Czech Republic, Spain’s Iberdola, Germany’s E.ON and Russia’s RAO EES had shown interest in investing in the Belene project.
Reacting to the NEC announcement, international environmental organisation Greenpeace, a vehement critic of the Belene project, called for transparency about the bids.
It said that over the past year, a “large amount” of banks had withdrawn from the project “because of the high risks involved”.
There was nervousness about facing the facts, a Greenpeace statement quoted Jan Haverkamp, the organisation’s expert on nuclear energy issues in Central Europe, as saying.
Haverkamp said that over the past year, important banks such as UniCredit Group, Commerzbank, Deutsche Bank, Credit Suisse, JP Morgan Chase, Merril Lynch & Co, Societe Generale, KBC and the Bayerische Landesbank had “expressed their concerns about the risks involved in the project” or had withdrawn their interest in the project entirely.
“Greenpeace together with a coalition of Bulgarian and international NGOs, believes that if the NEC would transparently publish the names of the bidding banks, they would get a chance to be also informed about the risks seen by independent experts and civil society,” Haverkamp said.
He alleged that the NEC was trying to sell a high-risk loan without banks getting the chance to see the whole picture.
Towards the end of 2006, the NEC chose a building consortium for the Belene project consisting of Atomstroyexport and French-German Areva NP. The construction contract is reportedly worth just less than four billion euro.
Counting in costs for preparation and planning, infrastructure, a temporary nuclear waste storage and interest costs, the total budget will be reportedly somewhere more than five billion euro.
“Experience in the nuclear sector, however, shows that budgets indicated before building are always heavily exceeded,” Greenpeace said. It said that the most recent completed nuclear power plant in Europe, the Czech Republic’s Temelin nuclear power station, saw an increase of its budget of more than threefold.
The most recently commissioned nuclear power plant project in Europe, Finland’s Olkiluoto, already faced an increase in budget of 25 per cent, less than two years after the start of construction, Greenpeace said.
“Belene will likely cost more than six billion euro in the end,” Haverkamp said. He said that it was doubtful that the sum would be recovered in a time frame acceptable to investors, because Belene would enter an overtraded market.
Petko Kovachev of the Green Policy Institute in Sofia said that the attempt to get the required financing in “small slices”, starting with the current 250 million euro, was caused by difficulties in finding genuinely interested investors.
Kovachev said: “NEC may be able to recover 250 million euro if the project crashes – its owners, the Bulgarian taxpayers will pay in the end because the value of NEC will plummet. Banks don’t care about that, only that they get their money back in time. But if they knew the real risks involved, they might well withdraw their initial interest”.
© TSE
