Bulgarian Energy Minister Temenouzhka Petkova said on October 26 that state-owned electric utility NEK has signed an agreement with Atomstroyexport, a division of Russia’s nuclear corporation Rosatom, to settle damages owed by NEK for the cancellation of the Belene nuclear power plant.
Under the agreement, Rosatom would forego the daily penalties ordered by an international arbitration court, provided that NEK made a full payment by December 15. In case a payment is made on December 16-25, Rosatom would forego 55 per cent of the daily penalties.
The accumulated amount of daily penalties would stand at 23.8 million euro by mid-December. NEK’s agreement with Atomstroyexport also saw the Russian company accept a 20.9 million euro deduction in the original amount of damages ordered by arbitration, following several objections raised by the Bulgarian side to the calculation methodology.
Overall, this would reduce the amount owed by NEK to 601.6 million euro if the payment is made by December 15. At the signing of the agreement, NEK voluntarily made a down payment of five million euro towards settling the debt, the Energy Ministry said in a statement.
Bulgaria’s Cabinet plans to make the necessary funds to settle the dispute available to NEK via a cash injection, under a law approved last month by Parliament. The law stipulated that the money would be made available only upon approval from the European Commission, which needs to rule on whether the cash injection is allowed under the EU’s state aid rules.
Atomstroyexport, a division of Russia’s nuclear corporation Rosatom, was picked to build two 1000MW nuclear reactors at Belene on the Danube River, a project that was shut down by Bulgaria in 2012. The Russian contractor filed for arbitration, asking for 1.2 billion euro in damages for equipment ordered for the nuclear power plant, which NEK never paid for, and won the court action in June, although it was awarded just over half of the amount it claimed.
(Belene nuclear plant site, screengrab from Bulgarian National Television.)