Banks urged to pull the plug on nuclear plant’s finances

The five banks suggested as possible backers of Bulgaria's Belene nuclear power station have come under pressure from environmental NGOs which fear that cost cutting and positioning in a region of significant seismic activity will make the plant unacceptably risky to build and operate.

The proposed plant is expected to cost Euro 4 billion to realise and without investment from foreign banks it is unlikely to ever be built.

Campaign groups Greenpeace and CEE Bankwatch have contacted the five banks put in the frame as possible backers by Bulgarian utility company NEK.

The banks still in the running, according to NEK, are BNP Paribas, Credit Suisse, Merrill Lynch & Co, JP Morgan Chase and the Lehman Brothers Bank.

Targeting would-be investors has proved an effective tactic in the NGOs’ fight to block the development.

NEK had hoped to secure significant investment in the project from UniCredit Group, which runs several chains of highstreet banks in Europe, and Deutsche Bank but in early November, both announced they would not support the plant, shortly after speaking with the NGOs (see related story).

In this latest round of lobbying the banks, Bankwatch and Greenpeace stated in a letter to the banks that Belene NPP constitutes a major investment risk. They point to an excessively low estimate of building costs and an underestimation of the construction duration.

The environmentalists also claim outages can also be expected because of the use of untried new technology at Belene.

As even the most optimistic projections do not expect the nuclear power plant to be on-line for another seven or eight years from now, it couls face unfavourable market conditions for new large scale capacity in the region.

Jan Haverkamp, Greenpeace’s energy expert for Central Europe, said: “The Bulgarian government is currently spreading the fear that electricity supply is going to get tight in the region because of the EU-brokered closure of the dangerous blocks 3 and 4 at Kozloduy Nuclear Power Plant.

“It is highly likely that more flexible and cheaper replacement capacity in the form of gas-fired co-generation and renewable energy sources would be able to fill any gap several years before Belene is likely to come on-line.”

He added that energy efficiency also would be able to replace a large part of the national demand if Bulgaria was to take serious steps towards getting itself in line with the average energy efficiency level within the EU.

Currently Bulgaria is notorious for being the most wasteful country in Europe in terms of energy usage.

Sam Bond

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