Despite lingering uncertainties over the huge investment in new reactors at Kozloduy NPP, Bulgaria is negotiating with an American bank to secure enough funding to start the project. This transpired after an announced agreement reached with the Export-Import Bank of the USA - EXIM Bank for financing two new reactors in Bulgaria.
According to various estimates, between 15 billion and 20 billion dollars will be needed for the new blocks of the American company Westinghouse.
Acting Minister of Energy, Vladimir Malinov, has already visited the USA. "The experience and expertise of the Export-Import Bank of the United States of America will be relied upon in order to build the 7th unit of the Kozloduy NPP within the time frame," he said. He added that he hoped the presence of the American bank in the project's portfolio would attract other financing institutions. Currently, there are no other investors, which means that the hole must be filled by the Bulgarian state. However, the huge size of the investment required gives rise to huge doubts about its feasibility.
After an agreement was reached with Westinghouse some months ago, a memorandum was also signed with the White House. Assistant Secretary of the US Department of Energy Andrew White visited Bulgaria for an intergovernmental cooperation agreement. The event underlined Bulgaria's commitment to working with the US on the new reactors and so avoid a procedure for selecting a strategic investor, as was the case with the Belene NPP project.
The latest news means that the next step is to rely on EXIM Bank, which is the official export crediting institution of the USA handling the implementation of projects of American companies in other countries. EXIM's main target is to provide a market to US companies for projects that are raising capital.
Malinov himself stated that he was following the schedule for the construction of the 7th block, adopted with a decision of the Parliament of Bulgaria. However, one of the obstacles might be the sale of Belene NPP equipment to Ukraine, whose funds are to be used in Kozloduy, but which is delayed.
Where will the money come from?
According to public information from the US bank, "in the nuclear sector, EXIM offers long-term financing to buyers in the form of direct loans and EXIM-guaranteed loans from third-party lenders. These loans can have a repayment term of up to 22 years (after construction)".
The financing of nuclear power is not something new for the bank, which has already decided to pour money into the engineering and design of the new Romanian reactors at the Cherna Voda NPP.
The Bulgarian side has already boosted the capital of "Kozloduy NPP - new capacities" by 500 million levs. The funds were provided as a loan from Bulgarian energy holding, so as not to burden the state budget. And the head of the plant, Valentin Nikolov, told Kapital a few months ago that "as of now, the first steps are secured, the company has more than 1.5 billion levs available."
He also clarified the financing structure, which will probably "be 30% state funds and 70% raised equity." At that time, Nikolov hinted that "a procedure is underway and we will expect, if possible, that the builder himself will offer financing". However, for the time being, the constructor, Hyundai, has not declared such a step, although in their interview with Kapital such a possibility was discussed.
"South Korea has state-backed financial institutions such as the Korea Import-Export Bank (KEXIM) and the Korea Commercial Insurance Corporation (K-Sure). In the past, it was KEXIM that provided over 3.1 billion dollars to support our NPP project 'Baraka' in the UAE," said Yoon Young-Jun, CEO of Hyundai E&C.
Despite lingering uncertainties over the huge investment in new reactors at Kozloduy NPP, Bulgaria is negotiating with an American bank to secure enough funding to start the project. This transpired after an announced agreement reached with the Export-Import Bank of the USA - EXIM Bank for financing two new reactors in Bulgaria.
According to various estimates, between 15 billion and 20 billion dollars will be needed for the new blocks of the American company Westinghouse.
