On Thursday TASS information agency announced that the International Court of Arbitration in Geneva judged in favor of Atomstroyexport in a dispute with the National Electric Company related to the suspension of Belene NPP project. According to the court’s decision, Bulgaria has to pay Atomstroyexport compensation worth EUR 620 million. Bulgaria’s Premier Boyko Borissov and Bulgaria’s Minister of Energy Temenuzhka Petkova announced that the National Electric Company had to pay the Russian company some EUR 550 million for equipment which has already been manufactured. The equipment for Belene nuclear power plant was ordered back in 2008.

The Belene saga started some 35 years ago. The second nuclear power plant made as a result of the friendship between Bulgaria and the Soviet Union had to make the People’s Republic of Bulgaria and its former leader Todor Zhivkov proud. However, the project was suspended one year after the transition from socialism to democracy and was resumed again in 2002 by former Premier Simeon Saxe-Koburg-Gotha. In 2006 the cabinet headed by Premier Sergey Stanishev decided that Atomstroyexport had to construct a brand new nuclear power plant in Belene, following an international tender. The first problems occurred when GERB party formed a cabinet in 2009. The National Electric Company and Atomstroyexport failed to negotiate the final price of two new 1,000MW nuclear units. Moreover, it turned out that the Bulgarian company was experiencing financial problems, too.

Later, the German RWE energy company, which had to partner NEC in that project and acquire 49% of the shares in the future nuclear power plant, also abandoned the project. Thus, in February 2013 Belene project was officially suspended for the second time. As a result, Atomstroyexport demanded compensations to the tune of EUR 1.2 billion. The International Court of Arbitration in Geneva, however, judged that Sofia had to pay for the manufactured equipment only. It rejected all other claims for compensations linked with cost escalation, lost profits, etc. The National Electric Company has the obligation to pay EUR 550 million for the manufactured equipment and to receive that equipment. The margin amounting to EUR 70 million is formed by a counter claim by the National Energy Company. According to the contract, ASE had to buy the old equipment from Belene, but it only bought part of it. 

The authorities are yet to decide what to do with the manufactured equipment worth half a billion Euros. It has to decide whether to sell that equipment to other countries, or use it in own nuclear power plants.  

Both sides behaved as winners after the decision of the International Court of Arbitration. Bulgaria is satisfied with the fact that it has to pay for the manufactured equipment only and the Russian energy company is satisfied with the fact that it won the lawsuit against NEC. Now the National Electric Company has to find money to pay Atomstroyexport.