Mon, Mar
42 New Articles

Large-Scale Energy Projects in Bulgaria

Large-Scale Energy Projects in Bulgaria

  • Smaller Small Medium Big Bigger
  • Default Helvetica Segoe Georgia Times

Currently, two large-scale energy infrastructure projects are being implemented in Bulgaria: the nuclear power plant near the town of Belene (the NPP Belene Project), where  a strategic investor is to be selected soon-, and the construction of an extension of the natural gas transmission system of Bulgaria (the ETSB Project).

The construction of NPP Belene started in 1987, but it stopped in 1990 due to the lack of financing. The NPP Belene Project was revived in 2002; its site was approved by the Nuclear Regulatory Agency of Bulgaria in 2006; an Environmental Impact Assessment /EIA/ was completed in 2004; and a Construction Permit /CP/ was issued in 2008. Then, for a variety of reasons, in 2012 the Bulgarian Government and Parliament imposed a moratorium on the NPP Belene construction. In 2018 the NPP Belene Project was again revived. This time, the Bulgarian Minister of Energy proposed that the project be completed at market conditions, without state guarantees (i.e., no power purchase agreements, feed-in-tariffs, etc.). The Minister of Energy suggested that all assets of NPP Belene be set apart in a separate entity, independent from the National Electricity Company, which is the current owner of the assets, and the supplier of last resort /high voltage/ of electricity in Bulgaria.

The procedure for the selection of a strategic investor started on May 22, 2019, and on December 19, 2019, Bulgaria’s Ministry of Energy invited China’s CNNC, Russia’s ROSATOM through its subsidiary ATOMENERGOPROM, and Korea’s KHNP to submit offers for participation as a strategic investor, and France’s Framatome and the United States’ General Electric, to submit offers as equipment suppliers. Rosatom, Framatome, and GE have since announced they are teaming up for a joint bid.

There are currently discussions about which of the Projects’ permits remain valid and which have expired. It is possible that a new EIA procedure and a new CP will be required. Notifications to the European Commission and renewed licensing for the site and the power plant are also mandatory procedures.

It may be a lengthy history so far, but NPP Belene is at an advanced stage of implementation compared to the NPP projects starting from scratch. Two Russian WWER reactors with capacity of 1000 MW each have been purchased and delivered at the site, along with other significant equipment. Bulgaria also operates another NPP, NPP Kozlodui, which means the relevant expertise and professional staffing are readily available. Observers value the project at some EUR  10 billion. It is expected it will take at least ten more years to complete.

If the strategic investor and supplier selection procedures come to a successful end, and the contract is signed (which was initially expected before the end of 2020, but in the overall COVID-19 emergency this may be pushed back to 2021), the NPP Belene Project promises to be a major project in Bulgaria, the region, and SEE overall, and it will involve a range of additional stakeholders – lenders, insurers, offtakers, and more.

Another large-scale energy infrastructure project in the making is the extension of the Bulgarian natural gas transmission system from the Turkish-Bulgarian border to the Bulgarian-Serbian border. The ETSB Project is carried out by the Bulgarian natural gas transmission system operator Bulgartransgaz EAD. Its forecast value is EUR 1.5 billion. Once completed, it will be capable of transporting 20 billion cubic meters of natural gas per year. The construction of the pipeline is assigned to a consortium formed by Saudi Arabia’s Arkad E&C and Italy’s Arkad ABB S.p.a. The two compressor stations should be delivered and installed by a consortium consisting of Germany’s Ferrostaal and Bulgaria’s Glavbolgarstroy.

As of July 29, 2020, 423.31 km of pipelines out of the total 462.07 km have been welded. The ETSB Project is expected to be completed in the summer of 2021.

In the near future, the pipeline is expected to foster the gasification of the northern part of Bulgaria, where, at the moment, only 15% of the municipalities have access to the transmission system.

By Aleksandar Aleksandrov, Head of Energy, and Irina Tsvetkova, Senior Managing Partner, Tsvetkova Bebov Komarevski

This Article was originally published in Issue 7.8 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Bulgaria Knowledge Partner

Schoenherr is a leading full-service law firm providing local and international companies stellar advice that is straight to the point. With 15 offices and 4 country desks Schoenherr has a firm footprint in Central and Eastern Europe. Our lawyers are recognised leaders in their specialised areas and have a track record of getting deals done with a can-do, solution-oriented approach. Quality, flexibility, innovation and practical problem-solving in complex commercial mandates are at the core of our philosophy.

Firm's website: www.schoenherr.eu

Our Latest Issue