German firm RWE, which owns npower, bought 49% stake in project cables claimed ‘reeked of side deals’. One of Britain’s biggest energy suppliers, which wants to build half a dozen new nuclear reactors in the UK, helped develop one in Bulgaria which was “dogged by ongoing serious safety concerns”, according to leaked US diplomatic cables.
The German firm RWE, which owns npower and supplies electricity and gas to 6.7 million UK customers, bought a 49% stake in the project in December 2008 and quit as a strategic partner in October 2009. RWE said its decision to pull out of the troubled EUR7bn reactor project was due to the fact that “the project’s financing could not be finalised within the agreed period”. It said “safety issues were not a factor”.
But its involvement in such an apparently shoddy project, which the cables claimed “reeked of side deals” even before RWE bought the 49% stake, could hurt its reputation over safety and cast doubt on its judgment in selecting who to work with on reactor projects.
In December 2007, environmental groups including Greenpeace condemned the European commission’s approval of the project. Approval came despite the former Bulgarian nuclear regulator calling for it to be blocked on safety grounds.
RWE said: “For each project RWE is involved in, safety has the highest priority. The reason for RWE to withdraw from the Belene project was that — because of the international economic and financial crisis — financing of the project could not be clarified in due time.” The release of the cables come amid growing safety concerns over an impending global “nuclear renaissance” with more than 1,000 new reactors expected to be built by 2030, according to the World Nuclear Association.
In August 2008, RWE’s CEO, Jurgen Grossmann, responded to questions about reports of its possible involvement in the over—budget and behind—schedule project: “It is remarkable, isn’t it, that the possible involvement of RWE in the construction of a new nuclear power plant in Belene, Bulgaria, based on state—of—the—art technology is being described as irresponsible.” The cables claim that despite its due diligence, RWE’s confidence had turned to “buyer’s remorse” within weeks. In the cable, the US ambassador cited local contacts as saying there was a rush to start construction so that the project would keep RWE on board. Belene project experts privately expressed “serious concerns” that if safety practices continued to be ignored “it could pose a huge risk”. RWE’s partner, the state—owned Bulgarian electricity company, NEC, which held 51% of the project, declined to comment.
RWE was said to be “in the dark” on most on—site and technical issues. This was despite a previous cable claiming that the company in February had demanded to review all Belene—related agreements.
The same February 2009 cable reported “RWE worries about the project’s lack of transparency and the need to work with Atomstroyexport [the Russian lead contractor]. RWE wants to enforce European business practices”. The cable also reports: “When Bulgarians talk about the Belene nuclear power plant, they increasingly do so in hushed tones. Issues of delays, financing woes, non—transparent horse—trading and side deals, Russian influence ... and the interests of well—connected politicians and energy oligarchs inevitably come up.” RWE’s statement continued: “RWE’s participation in projects guarantees a high degree of ethical business behaviour and openness to concerns of all stakeholders. We ensure that each project is in line with European standards with regard to transparency and information to the public. It is therefore common practice within all our projects that RWE’s or a similar code of conduct will be applied. The same has been true for the Belene project for which a code of compliance was developed and should have been implemented; we would have thereby introduced dedicated instruments against corruption.
“We have raised these issues with NEC and the Bulgarian government and they confirmed that this was a shared mutual understanding. RWE has signed a joint venture agreement with NEC in December 2008 after intense pre—assessment of the project. Under the joint venture agreement the companies involved agreed to jointly continue the project development work, and further advance the project.
“The potential joint construction and operation of the new power plant would not have gone ahead until all relevant safety—related, legal, economic and organisational aspects had been settled during this phase.” Copyright: Guardian News & Media 2010
