Crisis Throws Romania’s Nuclear Project into Doubt

Just one day after Bucharest announced a shortlist of companies interested in building two more reactors at Romania’s sole nuclear power plant in Cernavoda, some of the potential foreign partners have pulled out. 

On Wednesday, US giant Bechtel, a Canadian-Italian consortium and a Russian firm, led by Atomtechnoprom, all expressed interest in a 4-billion-euro project to construct two new nuclear plants in Cernavoda, near the Black Sea.

But on Thursday, Germany’s RWE, French GDF Suez and Spain’s Iberdrola decided to drop out of the Cernavoda nuclear project, citing economic uncertainties.

"Economic and market-related uncertainties, which to a large part stem from the financial crisis, now put into question the necessary investments," a RWE spokesman quoted by Reuters news agency said.

The above-mentioned companies were all part of EnergoNuclear, a joint company formed between Romania and five foreign firms aimed at funding and operating the two new units.

Italy's Enel SpA and Belgium’s Electrabel SA have not withdrawn yet, but it makes little sense for them to stay in the project alone, experts say.

The government currently owns 60 per cent of the venture.

Romanian authorities were taken by surprise by the decision of the foreign partners to quit. "We have not been officially informed. Anyway, we will try to find money to fund the nuclear project," Tudor Serban, from the economy ministry, said. 

The initial deadline to complete the two new nuclear reactors was estimated for 2016 but that will likely be postponed indefinitely.

"Lack of a clear regulatory framework and economic and market uncertainties from Romania put any future investment into the question. Furthermore, the withdrawal of Cernavoda’s foreign partners is a bad signal for any foreign investors," economic analyst Constantin Rudnitchi said.

Cernavoda is a Canadian-designed plant functioning with natural uranium and heavy water. Two reactors have already entered into service, the second in August 2007, together supplying around 20 per cent of the country's electricity needs.

The construction of Cernavoda units 3 and 4 was planned to double Romania's production of electricity from nuclear energy in a move aimed to meet domestic electricity demands but also for exports in the Balkan area.