Romanian Nuclear Project Hit by Departures

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Romania's plan to build two nuclear units at Cernavoda have been dealt another blow by the withdrawal of key partners GDF Suez S.A. (EPA:GSZ) (Paris, France), Iberdrola S.A. (MCE:IBE) (Bilbao, Spain) and power giant RWE AG (OTC:RWEOY) (Essen, Germany).

The sudden departure comes just three months after CEZ as (PRG:BAACEZ) (Prague, Czech Republic), the Czech Republic's largest utility, announced that it was ending its involvement in the 4 billion-euro ($5.56 billion) project to expand Romania's Cernavoda nuclear power plant. For related news, see October 11, 2010, article - CEZ Pulls Out Of Romanian and Polish Power Projects.

The three companies issued a joint statement declaring their intent to pull out of the project, citing economic uncertainty as a key factor. They had been working with Romania's state-owned Nuclearelectrica (Bucharest), which had put together a consortium featuring those companies and others, including ArcelorMittal (NYSE:MT) (Luxembourg), Enel SpA (BIT:ENEL) (Rome, Italy) and Electrabel S.A. (Brussels, Belgium).

"GDF Suez, RWE and Iberdrola have decided not to continue to participate in the Cernavoda nuclear project in Romania," the partners said. "Since 2008, GDF Suez, RWE and Iberdrola, among other international investors, have been partners with SN Nuclearelectrica for the development of units 3 and 4 of the Cernavoda power plant. Economic and market uncertainties surrounding this project, related for the most part to the present financial crisis, are not reconcilable now with the capital requirements of a new nuclear power project."

They added: "This decision does not reflect on the technical quality of the project, recently recognized by the European Commission, nor on the commitment of GDF Suez, RWE and Iberdrola to the development of the Romanian energy market."

The two existing units at the Cernavoda nuclear power plant are rated at 706-MW each and currently provide approximately 18% of Romania's electricity. The new additions, units 3 and 4, will double the capacity of the plant by 1,400 MW.

In recent weeks, the Cernavoda 3 and 4 projects received positive feedback from the European Commission (E.C.). After 18 months of analysis, the E.C. claimed that the investment met the objectives of the EURATOM Treaty and would be an important contributor to the development of the region's energy mix. It also expressed its faith in the Romanian authorities overseeing the projects.

New bidders have expressed interest in recent days, including a consortium led by Bechtel International, part of Bechtel Group Incorporated (San Francisco, California), and including SNC-Lavalin Incorporated (TSX:SNC) (Toronto, Ontario), Ansaldo Nucleare (Genoa, Italy) and Elcomex IEA (Cernavoda, Romania). There is also interest from a Russian consortium led by Atomtechnoprom (Moscow, Russia).

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