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. Last Updated: 07/27/2016

Moscow Will Fund Bulgarian Power Plant

Moscow is prepared to fund most of the construction of a 4 billion euro ($6 billion) nuclear power plant at Belene in Bulgaria, Energy Minister Sergei Shmatko said Friday, as Russia tries to sweeten a deal that Sofia has put under review.

“We think it is important to ensure steady work on the Belene project in the next year or two,” Shmatko said. “We are considering possibilities to take on the main financial burden, including the option of equity participation. We are interested in the success of this project and are prepared to take certain risks.”

Shmatko was speaking after a two-day session of the Bulgarian-Russian economic cooperation commission, which discussed joint energy projects including the Burgas-Alexandroupolis oil pipe and the South Stream gas link.

RWE, Germany’s second-largest utility, withdrew from the 2,000-megawatt nuclear power-plant project on the Danube River after the country declined to provide state funding. Atomstroiexport was chosen in 2005 to build the plant, with Areva and Siemens as subcontractors.

Construction was delayed as the global financial crisis hindered financing. Bulgaria said it can sell half of its 51 percent stake in the project.

The government of Bulgarian Prime Minister Boyko Borissov, which is struggling to cut spending and bridge a budget deficit, has been re-examining its participation in major Russian-backed energy projects agreed by the previous administration to see whether they matched the national interests and the European Union’s agenda.

Bulgaria will do an environmental impact assessment study of the planned Burgas-Alexandroupolis pipeline, before deciding whether to continue its participation, Bulgarian Energy and Economy Minister Traicho Traikov said. The 1 billion euro oil link running from the Bulgarian Black Sea coast to the Greek port of Alexandroupolis on the Aegean Sea, aims to bypass Turkey’s congested Bosphorus.

Shmatko said Friday that Moscow understood Bulgaria’s environmental concerns and supported its decision to assess its impact.

Earlier this week, Borissov said Sofia would decide whether to stay onboard with the pipeline after the assessment was ready. It could take up to 18 months.

“We show full understanding about how important it is for Bulgaria [to have] an objective environmental assessment,” Shmatko said at the end of a session of a Russian-Bulgarian commission which discussed joint energy projects.

“We have denied talks that the project will be frozen. This will not happen,” Shmatko said, adding Friday’s meeting proved relations between Moscow and Sofia had not cooled.

(Bloomberg, Reuters)