Financial consultant to be selected within a month for the construction of units 7 and 8 of Kozloduy NPP

Kozloduy NPP – New Power Plants has sent an invitation to select a financial consultant to assist the company in the financial structuring of the project for units 7 and 8. This was stated by the company’s director Petyo Ivanov to journalists. He is participating in the Fourth International Nuclear Conference dedicated to Small Modular Reactors. The event is organized by the Bulgarian Energy and Mining Forum and the Canadian Chamber of Commerce in Bulgaria, and the media partner is 3eNews.

The invitations have been sent to the four major global consultants in the field KPMG, EY, Deloitte and PwC, with binding offers expected by April 17. The nuclear company’s consultant will be clear next month. The consultants themselves will have the difficult task of helping with the financial structuring of the future construction of units 7 and 8 at the Kozloduy NPP, using the AP 1000 technology. The consultants will have to create possible financial models, as well as defend the project before the European Commission, following the example of the Czech Republic and Poland, it became clear from Ivanov's words. Bulgaria will be the first to begin this process of negotiations for the construction of nuclear power. The construction of the units will require a state guarantee, which must also be presented to the EC. At the moment, the guarantee is for 1.5 billion leva and is not enough for the construction of two nuclear units.

For the moment, it is clear that 20% of the future budget for the construction of units 7 and 8 will be the equity of the Kozloduy NPP and BEH, and 80% will be the attracted financing. There is already a letter of intent for support from the American USexim Bank, and one is expected from the Export Bank of South Korea. The financial consultant will propose different options for the remaining part of the financing and whether it is possible to seek bridge financing from international banking institutions. The option of taking bonds from world markets, but on behalf of the Kozloduy NPP, will also be discussed. Negotiations are also underway for the signing of long-term contracts for the supply of the produced electricity (with offtakers, ed. note), Ivanov explained.

According to him, future state guarantees for the new nuclear units will be issued in stages by the Ministry of Finance. They will not affect the budget deficit, because they are an off-balance sheet figure, the financier explained.

Five countries ask about the EIA of Unit Eight

So far, five countries have expressed interest in participating in the environmental assessment of Unit Eight. These are Greece, Austria, Romania, Serbia and North Macedonia, the director of the Kozloduy NPP - New Capacity also explained. Initially, in Europe, Austria and Greece are not supporters of the development of nuclear energy. The environmental assessment itself is expected to be completed in the next year or two, depending on the requirements and regulations. During this period, the project company will apply for construction permits for the construction of accompanying infrastructure around the site of the future two units.

We remind you that it is expected that by the end of this year the cost of construction of the two units, how long they will be built and how much the electricity produced by them will cost will become clear. Then, based on the calculations, a final investment decision is expected to be made next year and an EPC contract for the construction of the new nuclear power plant to be signed. According to the plan, Unit 7 should be put into operation in the middle of the next decade. Hyundai E&C even wanted the first electricity from the new unit to flow to the grid in 2032.

Ivanov added that our country will look for high-tech companies to build data centers and buy electricity from the nuclear power plant on a long-term basis. All options for contracts for difference, long-term agreements for the sale of electricity or participation of private investors in the project will be discussed with the financial consultant. The state categorically seeks to retain the majority stake in the plant for itself.