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News 26 Oct 16

Bulgaria, Russia Agree to Cut Belene Debt Bill

Russia's Atomstroyexport has agreed to write off the interest that Bulgaria owes on its debt for the Belene project - if Bulgaria pays off its obligations in full by December 15.

Mariya Cheresheva
BIRN
Sofia
The Belene power plant. Photo: Atomstroyeksport

A debt settlement deal was signed by Bulgaria’s state-owned National Electric Company, or NEC, and the Russian nuclear producer Atomstroyexport on Wednesday, the Bulgarian Energy Ministry announced.

An arbitration court in Geneva ordered the NEC to pay the Russian firm 601,617,133 euros for the production of two nuclear reactors for the cancelled Belene power plant.

Until Bulgaria covers its debt, it also has to pay 130,000 euros per day in interest, the court ruled in June.

However, if the NEC pays off the total amount owed to Atomstroexport before December 15, the Russian company will write off the interest incurred since June 14, which is a total of 23.8 million euros, the two state firms have now agreed.

If the debt is covered by December 25, Russia will cancel 55 per cent of the accumulated interest payments.

The NEC paid 5 million euros to Atomstroyexport on Wednesday, which will be deducted from the principal sun, the Bulgarian Energy Ministry explained.

The Belene nuclear power plant project dates from the 1970s, but was set as a priority and restarted during the cabinet of Stanishev, now a leader of the Party of European Socialists.

In 2013, the first government of current Prime Minister Boyko Borissov abandoned the project due to lack of funds and lack of interest on the part of investors.

 In June, a court in Geneva ordered Bulgaria to pay over 550 million euros in compensation to the Russian firm for the production of two nuclear reactions intended for the aborted project. 

Bulgarian MPs in September backed a bill that allows the state budget to cover the debts owed to Russia's Atomstroyexport, but Brussels still needs to approve this

The Bulgarian government announced in June that it would seek buyers for the two nuclear reactors produced by the Russian firm, but has not dismissed the option of looking for private investors to revive the Belene project, either. 

On Monday, Delyan Dobrev, an MP from Bulgaria’s governing GERB party, surrendered his parliamentary immunity after the state prosecution pressed charges against him over the Belene project.

Prosecutors accused Dobrev of willful neglect of the work of the NEC, while he was Minister of Economy and Energy between 2009 and 2013, costing the state over 560 million euros.

Petar Dimitrov, who was in charge of the economy ministry under the Socialist-led government of Stanishev between 2007 and 2009 was also indicted for failing to apply the necessary controls over NEC during his mandate. 

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