October 3, 2008

Bulgaria to Sell 49-Per Cent Stake in Future Nuclear Plant to German Firm

Text of report in English by Bulgarian national news agency BTA

Sofia, 3 October: Germany's RWE Power has been selected to acquire a 49 per cent stake in the Belene Energy Company as a strategic investor in the project to build and operate Bulgaria's second nuclear power plant, Bulgarian Economy and Energy Minister Peter [Petur] Dimitrov told a news conference here on Friday [3 October].

The second ranked bidder, Elctrabel of Belgium, can also share in the project if invited to do so by RWE and subject to compliance with the terms agreed with the Germans. The combined participating interest of the two companies, if agreed, may not exceed 49 per cent, Dimitrov noted. Whether one or both companies will participate will become clear in a matter of days, he added.

The RWE bid includes a 550m leva premium for capital expenditures of the National Electric Company (NEK) under the project, which may be adjusted for the producer price index in the Eurozone.

RWE is ready to contribute 1,275m euro equity to the Belene Energy Company, the minister also said. A shareholding agreement is to be signed before the end of October, and the Belene Energy Company will be registered in November.

The German company has agreed to extend a 300 million loan before the financial completion of the Belene N-Plant project, which will be partially remitted on each maturity date, Dimitrov said. The financial completion is due by 1 January 2010.

RWE will furnish corporate and bank guarantees equivalent to its shareholding for loan-financing of the project. The company has declared its desire for the establishment of a company that will be selling all electricity generated at market prices, consisting of the production cost and a margin meeting the creditor banks' requirements.

"The electricity sale contracts will be concluded for one year ahead, this is a good practice," Dimitrov said.

RWE insists on the establishment of a company to operate the N- plant. "The strategic investor will play a leading role in the operation and maintenance of the N-plant, the company's know-how will be used.

After the registration of the Belene Energy Company, the assets on the site will be valued by independent experts and appraisers of the Recording Agency, the Economy and Energy Minister said. The technical design of the plant will be approved by the Nuclear Regulatory Agency and the construction will actually start in March- April 2009, according to Dimitrov.

Bids for 49 per cent stake in Belene Energy Company were taken from five pre-qualified private investors: Enel, Italy, E.ON and RWE Power, Germany, CEZ, Czech Republic, and Electrabel, Belgium on 17 October 2007. NEK is to hold 51 per cent majority interest in company. Electrabel and RWE Power were shortlisted in the tender for strategic investor on 23 June 2008.

Originally published by BTA news agency, Sofia, in English 1156 3 Oct 08.

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