On Monday, a key step towards the development of new nuclear capacities in Bulgaria was accomplished. The New Capacities company, a subsidiary of the Kozloduy NPP, signed a contract with the Westinghouse-Hyundai consortium for the first phase of engineering for units seven and eight of the plant. The agreement was signed at the Council of Ministers by the executive director of the state-owned company, Petyo Ivanov, and representatives of the consortium in the presence of caretaker Prime Minister Dimitar Glavchev and Energy Minister Vladimir Malinov. The event was also attended by the ambassadors of the USA and South Korea.
Although the final terms of the contract were not specified, the price was rumored to be approximately 350-370 million levs, or about 700 million levs. "The exact amount is a commercial secret that I cannot reveal. The contract contains two elements - a fixed price, and a price based on the number of hours and time invested", Malinov said. The amount is within the estimated budget and is allegedly better than the price reached during the earlier phases of the negotiations.
According to the new agreement, the initial task of the consortium will be to evaluate the financial model of the project, estimate the future price of the electricity based on that data and evaluate the marketability of the project. It is expected that the results of the techno-economic analysis will be ready in the fourth quarter of 2025 and will be submitted to the National Assembly so that MPs can make a final investment decision on the construction of the new units.
The next step will be the signing of the actual contract for the design of the equipment, its delivery, installation and so on, so that the first of the two reactors will be operational in 10 years - in 2034. The estimated cost of the entire project is between USD 14-16 billion, and the ten-year completion framework is very optimistic for such large-scale projects. As for the business model, it would in all likelihood have to include a government guarantee of returns, as new nuclear plants would find it difficult to compete on a purely market basis.
Stage by stage
"We are confident in our ability to tackle the challenging task of completing the first unit within a fixed price and 60-month construction period," Yoon Young-joon, president and CEO of Hyundai Engineering & Construction, told Capital weekly recently. In his words, the most important step at the moment is to create a good synergy with Westinghouse in order to create an action plan at the engineering level.
According to the head of the nuclear plant, the financing of the new units is more or less secured. "As of now, the initial activities have been secured, the company has more than 1.5 billion levs available to cover the running costs. I think the project to construct new units now has the support of both the public and of the politicians from the National Assembly," Kozloduy NPP CEO Valentin Nikolov told Capital weekly. In his words, the project will be structured on the basis of 30% equity participation and 70% attracted capital. The main subcontractor of the future construction will be Glavbolgarstroy, which is also expected to sign an agreement on the project later this week.
In addition, the US export bank Exim Bank is ready to provide financing of more than USD 8 billion, and financing for the same amount has already been provided by the Korean Export Bank and the Korea Trade Insurance Agency, Malinov said. The US Exim Bank will finance the activities of Westinghouse and Bulgarian subcontractors, Korean state-owned Hyundai and Korean companies that will be brought in to participate in the project.
And what about the Ukrainian Belene equipment deal?
Ukraine has not abandoned the purchase of the old reactors designated for the halted Belene NPP and the proceeds from the deal will be used for the implementation of the project for units 7 and 8 of Kozloduy NPP, Malinov added in response to journalists' questions. He said that he had recently discussed the issue with his Ukrainian counterpart and that, in mid-October, Bulgaria sent Ukraine its final proposal on the general terms of the deal, but the Ukrainian side said it needed more time to be able to finally secure the financing. The procedure must also go through the Ukrainian parliament, which ought to agree the price of the deal and the terms of the payment itself.
In the summer of last year, the National Assembly obliged the minister in charge to start negotiations with Ukraine on the sale of the equipment for the Belene NPP. The deadline for the deal was 60 days, but even today - more than a year later - the process has hardly started. The expectation is that Bulgaria will receive at least 1.2 billion levs. According to the parliamentary decision, Kyiv will have to pay the amount in full even if Ukraine does not want all the equipment.
On Monday, a key step towards the development of new nuclear capacities in Bulgaria was accomplished. The New Capacities company, a subsidiary of the Kozloduy NPP, signed a contract with the Westinghouse-Hyundai consortium for the first phase of engineering for units seven and eight of the plant. The agreement was signed at the Council of Ministers by the executive director of the state-owned company, Petyo Ivanov, and representatives of the consortium in the presence of caretaker Prime Minister Dimitar Glavchev and Energy Minister Vladimir Malinov. The event was also attended by the ambassadors of the USA and South Korea.
Although the final terms of the contract were not specified, the price was rumored to be approximately 350-370 million levs, or about 700 million levs. "The exact amount is a commercial secret that I cannot reveal. The contract contains two elements - a fixed price, and a price based on the number of hours and time invested", Malinov said. The amount is within the estimated budget and is allegedly better than the price reached during the earlier phases of the negotiations.
