Country Studies

3.1 Bulgaria

In the past, Bulgaria has followed a very intensive development strategy, based on imported fuels and Soviet-designed power plants. Most of these plants did not meet international standards of safety, environmental protection and efficiency. This strategy resulted in heavy dependence on fuel imports, leading, after the collapse of the communist block and a number of external shocks, to widespread energy shortages and unsustainable high energy import bills. In response, the Government partially liberalised petroleum fuel prices and sharply raised the prices of other energy items. It also initiated the preparation of a least-cost programme and several studies on the rehabilitation and safety improvement of the power system. Nevertheless, a number of key issues remain unresolved:

• Inadequate organisation and regulatory set-up of the Bulgarian energy sector
• Monopoly control of the generation, distribution and trade of electricity
• Subsidised energy prices
• Inadequate dispatch and control systems, resulting in a relatively unstable electricity supply and high costs
• Problematic, highly inefficient supply links
• Inefficient end-use technologies
• Urgent need for rehabilitation of a number of power plants
• Concerns over the safety of the Kozloduy nuclear power plant⁽⁴²⁾
• Urgent problems with radioactive waste from Kozloduy

In Bulgaria, the average electricity price covers 83% of domestic production costs and just 32% of the cost of imported electricity.⁽⁴³⁾ Energy subsidies in the electricity sector have had a distorting effect on seasonal load curves and have increased the overall costs of the system. In the last two years, energy prices have risen drastically from $0.016/kwh to $0.042/kwh. This drastic increase in energy prices, together with high levels of inflation, appear to be a heavy burden for local governments and citizens.

During the last seven years there have been many changes in the structure of the energy sector. Originally, there was an Association of Energy, then a Committee, then a Ministry and finally, again a Committee. Each had different rights and obligations regarding the country's energy management.

Now, coal mining and some district heating companies fall under the rules of the Committee of Energy. The Council of Ministries is the principal of the NEK (the National Electricity Company), which is the national monopoly in the generation, transmission, distribution, trade, export and import of electricity. Another company, Bulgargas, imports and supplies gas for the industrial and household sectors.

In late 1992, an independent Agency for Energy Efficiency was established, but in the beginning of 1993, the Committee of Energy included that Agency in its structure and later closed it down. In the spring of 1997, the agency was re-established and is now governed directly by the council of ministers. There is also a special committee -the Committee on the Use of Atomic Energy for Peaceful Purposes (CUAEPP)- which implements state policy on nuclear and radiation safety in all its aspects.

On the legislation front, a new energy law is being prepared and was submitted to the Parliament in late 1997. A draft energy efficiency law is in the process of preparation and is to be discussed in Parliament sometime in early 1998. There have been several energy strategies adopted in the last few years in Bulgaria. Different institutions, including successive governments, energy authorities and even companies have prepared their own energy strategies, and there has been no consistency among those strategies. It is expected that soon the present government will submit a new energy strategy for Bulgaria.

In general, there are no legal incentives for energy efficiency in Bulgaria. Legislation in the nuclear energy field is also woefully insufficient: safety procedures in the case of accidents are lacking, and there is no independent organisation taking full responsibility for the radioactive waste from Kozloduy.

3.1.1 Electricity Generation and Use

The total installed capacity of Bulgarian power plants is 13189.4 MW, which includes 4950 in thermal power plants, 3760 MW in nuclear power plants, 2407.2 MW in hydro power plants, 1060,2 MW in thermal power plants owned by industrial companies, and 1012 MW in others (including combined heating plants, or CHPs).

Since 1989, the demand for electricity in Bulgaria has decreased significantly. This is because of a financial crisis for consumers and industry, which resulted from a combination of the unstable political and economic situation in the country, lack of experience with a market economy and a disparity between existing industries and the competitive international economy.

In 1992-1993, energy end-use was about 50% of what it was in 1989. After including Unit 6 of the Kozloduy nuclear power plant in the energy system of the country (1993), the share of nuclear energy increased to approximately 40%. For 1996, this share was 42,7%. The share of energy from thermal power plants decreased from 60% in 1991 to about 47% in 1996. The share of hydro power remained almost the same during the period, at about 7%.

3.1.2 MDBs and Energy Policy

Bulgaria has received substantial financial support from IFIs for re-structuring its energy sector. There are five projects under implementation financed by IFIs in Bulgaria totalling 247,2 m. USD, and five more projects in the pipeline, totalling 675.5 m. USD. The loans are mainly directed towards rehabilitation, upgrading and improving the efficiency and safety of the district system, the Maritza East II coal power plant, the Chaira pump storage plant, the Belmeken and Chaira dams, and the Kozloduy nuclear power plant.

The EBRD's Strategy for Bulgaria gives the power and energy sector an important role: "The Bank's involvement will mainly be directed at:...selective support for the development of power and energy and municipal infrastructure."⁽⁴⁴⁾ The EBRD envisages developing a Demand-Side Energy Conservation Programme to finance energy-saving projects in the public and private sectors.

The World Bank has published several studies on Bulgaria's energy sector. In 1993 a report entitled "Bulgaria - Power Demand And Supply Options" was published. In the study, six nuclear electricity supply scenarios are developed, ranging from immediately shutting down all nuclear units (including VVER 1000s), to running all units to the end of their design lives after safety upgrading.

The main conclusions from the analysis in the study are: (1) It does not appear to be economically feasible to close the VVER 1000 units of Kozloduy (the safer units), although these should undergo safety upgrading. (2) The least- cost electricity supply option for Bulgaria is to run all the nuclear units to the end of their design lives after safety upgrading. (3) It would be technically feasible for Bulgaria to replace some or all of the VVER 440 (the less safe units) with alternative supplies and energy saving measures by the mid to late 1990s.

The World Bank has a Country Assistance Strategy (CAS) for Bulgaria, which has not previously made publicly available. According to Mr Z. Savov, Project Officer Energy & Enterprise Sector, the World Bank Sofia Office, the CAS for Bulgaria was prepared in mid-1996, but in November 1996, it was not in the World Bank's Public Information Center, nor was it in the Bank's local office in Sofia.⁽⁴⁵⁾

CAS's are not public documents, so the Bank is not obliged to make the Bulgarian CAS available through the PIC or its local office. However, this policy has changed during the last year under pressure from NGOs. NGOs have met with World Bank representatives and the new draft CAS was presented to them. Recently, the draft CAS matrix has also been made available to NGOs.

The fact that CASs have not been public documents seems to contradict the World Bank's own policies on public participation in environmental decision-making. The World Bank itself has identified public participation as an important element in environmental management: "Any form of environmental management should include and encourage a variety of procedures for public participation in decision-making, if for no other reason than this participation will encourage public ownership of the enforcement and economic implications of responsible environmental decision-making."⁽⁴⁶⁾ To be effective, public participation in decision-making must also include adequate access to information about environmental and energy policies, and this should include access to Country Assistance Strategies.

The overall objective of the World Bank's energy projects is to assist with financing the Bulgarian electricity subsector's medium-term core investment program. This in turn is designed to enhance Bulgaria's non-nuclear electricity supplies at the lowest cost while reducing associated pollution, as well as facilitating gradual retirement of the four older units at Kozloduy.⁽⁴⁷⁾

The Bank has produced two documents on Bulgaria's environmental strategy: "Bulgaria Environmental Strategy Study"⁽⁴⁸⁾, and "Bulgaria Environmental Strategy Study Update and Follow-Up".⁽⁴⁹⁾ The 1992 document is an overview of the environmental situation in Bulgaria after the fall of the communist regime. Although the study is structured to help the government in its near-future environmental policy, it also includes some elements which are closely related to energy policy. The document identified power plants as major sources for high concentrations of dust particulates and SO₂ in the air. Unfortunately, the study failed to include the Committee of Energy⁽⁵⁰⁾ among the key institutions involved in environmental and health protection in Bulgaria. Nor did it mention energy efficiency as a tool for decreasing pollution.

3.1.3 Energy Prices

The World Bank study also suggested that energy price reform be completed by 1995 as an element of economic policy restructuring. This reform has become perhaps the biggest problem in further negotiations between the Bulgarian government and IFIs about energy sector lending projects.

The pricing mechanism accepted by the World Bank did not relate closely to Bulgaria's inflation rate, dramatically devaluated the currency, and proved to be inadequate for the country's current unstable economic and political situation. The mechanism depended on political circumstances and required formal governmental approval. Prices were set by the Commission for Energy State Regulation without public knowledge or input.

Even now, there is still no public information available on the pricing mechanism, although a special commission responsible for the price mechanism and headed by trade minister has been established. The commission proposes energy prices to the Council of Ministers, who then vote on the commission's proposals.

With the rapid inflation and high exchange rates in 1996 and first half of 1997, electricity prices rose in the Bulgarian currency, but their equivalent in USD decreased. The prices were socially oriented, meaning that prices are kept below real market rates. This pricing practice has precluded re-investments.

Currently, the government is keeping prices at 3,5 US cents/kWh. At the same time, government officials continue to call for new loans for nuclear and coal capacities. Instead of encouraging consumers to waste energy by effectively subsidising energy prices, the government should be promoting real prices which would reflect the actual costs of energy production and supply, together with a system of incentives for energy efficiency and energy conservation.

3.1.4 Energy Efficiency and Renewable Sources of Energy

The consequences of Bulgaria's investment decisions in energy efficiency and other aspects of its energy policy are highly dependent on whether it chooses the "basic scenario" of development (following the country's existing energy development trend) or the "energy efficiency scenario" (based on improvements in energy efficiency and consumption reduction.)⁽⁵¹⁾

A 1995 Bulgarian Government study found a potential of more than 10% of projected energy demand could be avoided through energy conservation by the year 2000, and 16% by 2020. The building sector has a large potential for energy efficiency investment. Over ninety percent of residential building stock is privately owned.⁽⁵²⁾ This is an advantage, as private owners have higher incentives to reduce their energy consumption and can do so through building improvements.

According to a Danish-Bulgarian study, energy efficiency improvements in apartments - such as windows seals, insulation, balcony retrofits and improved blinds, would have payback periods from one to four years (assuming heating with electricity). The electricity savings from these measures is estimated to be around 33% of total electricity consumption. As different studies have underlined, there are many possibilities for increasing end-use efficiency.

For specific comparisons, Bulgaria consumes eleven times more energy in its industrial and residential sectors per unit of output than the EU. Bulgarian energy costs as a percentage of GDP amount to around 33 %. About 10 -15 % of energy use could be saved at little or no capital investment (with pay-back periods lower than 6 months) through general housekeeping, simple controls and employee awareness training.⁽⁵³⁾

According to PHARE, the total potential for energy efficiency of the industrial, transport and services sectors is estimated at about 12% of total energy consumption by the year 2000.⁽⁵⁴⁾ The study⁽⁵⁵⁾ concludes that the potential for energy use savings can reach 35 % (i.e. a 35 % decrease in total energy and fuel consumption) simply by decreasing energy intensity in industry, construction, agribusiness and forestry.

3.1.4.1 Some Concrete Examples of Proposed Programmes:

The Household gasification (the installing of gas heating systems) programme, which will result in decreasing of peak load in energy system of 1060 MW and saving of electricity - about 3080 million kWh/year (about 50 m USD/year at net price of 1.88 US cents/kWh and a market price of 3,5 US cents/kWh).

Individual measurement and regulation of heat usage in substances of public buildings. This programme will cost 313 m BGL (about 15 m USD) and will save 793 660 MWh/year at a very low specific cost per kWh saved - 0.39 BGL (0,0156 USD).

The Improvement of operation of heating boilers in public buildings programme will cost 30,3 m BGL/year (1,212 m USD/year). The specific costs per kWh saved are 0,42 BGL (0,0168 USD). The project will result in savings of 71500 MWh/year.

Introducing of individual measurement, regulation and pricing of heat consumption in the households with central heating systems. The required investments are estimated at 1161 m BGL (46 m USD), and the specific costs per kWh saved are 1,35 BGL (0,054 USD). 740540 Gcal/year will be saved by this project.

Improvement of lighting in households and public utilities sector.

• for households: investments are 77,18 m USD and saved energy will be 673 m kWh for 17 m USD/year (under 3,5 US cents/kWh);
• for public utilities: investments are 3,78 m USD and saved energy will be 703,7 m kWh for 21,4 m USD/year year (under 3,5 US cents/kWh);

3.1.4.2 Renewable Sources of Energy

According to a proposal for energy policy by Bulgaria's Minister of Energy, Bulgaria "has a 15 to 19% proved, potentially expedient reserve of renewables".⁽⁵⁶⁾ A study financed by PHARE⁽⁵⁷⁾ asserts that according to different scenarios, renewables could account from 1,9 % (base scenario) to 7,6 % of Bulgaria's total energy. The total energy potential of biomass (wood, agricultural, household) is estimated at 1 668 000 Gcal/year.⁽⁵⁸⁾ According to this study, economic efficiency of renewable energy in Bulgaria will be reached when the average price of electricity becomes 8 US cents per kWh. But that assessment does not include the "ecological" value of renewables.

3.1.5 MDB Lending in Bulgaria

In addition to EBRD, EIB and World Bank lending, there is also a 30 million USD grant under the terms of the NSA, which is not included in the above figures. Bulgaria has also received important support from the PHARE and USAID programmes.

There are four IFI projects currently under implementation in the Bulgarian energy sector. These include the "Energy I" and "District Heating Pilot Project" funded by the IBRD, "Maritza East II" funded by the EBRD with co-financing by the EIB and PHARE, and the EBRD's NSA grant for Kozloduy Units 1-4.

The difficult economic and political situation which Bulgaria has faced for the last 5 years has had a major influence on the process of initiating and implementing projects by IFIs in the country's energy sector. Some of the main objectives of the loans currently under implementation have not been fully met.

These unfulfilled objectives include de-monopolisation and restructuring of the energy sector, real energy pricing reforms, retirement of the first four units at the Kozloduy NPP, and assisting the development of alternative sources of energy. Little has been done to promote demand-side efficiency, or the use of energy efficient and renewable energy technologies. The only project described above which would improve supply-side energy efficiency is the district heating pilot project. In addition, there has been in general very little public consultation regarding the present IFI projects. These unfulfilled objectives should be addressed in planning future IFI- funded energy-related projects in Bulgaria.

3.1.5.1 EBRD

Projects Under Implementation:

Maritza East II Project The borrower and beneficiary for this project is the NEK. Total Project Costs are 140,4 million USD, consisting of a 50,9 million USD EBRD loan, a 56,7 million USD EIB loan, 31,5 million USD from PHARE, and 1,3 million USD from the NEK. Maritza East II is Bulgaria's only energy sector project under implementation which is financed by the EBRD. The environmental category of the project is B/1.

The Maritza East II project was initiated in 1992 by the Bulgarian government. The loan was to help finance the completion of a 215 MW lignite-fired generation unit and the addition of sulphur dioxide removal equipment. During the process of negotiations, the Bulgarian government succeeded in convincing the EBRD to reduce the interest rate for the loan from LIBOR+2,5 %, to LIBOR+1,9 %. Unit 8 (215 MW) was commissioned in December 1995 and since then has functioned as a part of the Bulgarian energy system. The extension of a coal handling facility is also under way, and was supposed to be finished during 1997.

There has been significant delay in the installation of flue gas de-sulphurisation technology. This technology is being used for the first time in Bulgaria. There are concerns about its ecological performance, as low quality gypsum results as a by-product of the process. In addition, the technology would only clean SO₂ from its emissions, but not SO₃ or No_x. This technology does not represent best available technology, as other technologies currently exist which do not have gypsum as a by-product, such as the electronic-radiant process.

The beginning of construction work on flue gas de-sulphurisation at Maritza East II is included in the NEK's 1997 Investment programme. However, the auction for completion of this sub-project has not been held yet. The situation became more complicated after 30 June 1996, when the grace period finished and Bulgaria started to pay back the loan. Now negotiations for extending the project timetable are under way.

NSA Grant Agreement This agreement was signed in June 1993. The grant amount is 30 million USD, to be used for short-term safety improvements for reactors 1-4 at the Kozloduy nuclear power plant. There has been considerable delay due to unanticipated problems with the Kozloduy Project Management Unit (PMU) and the Government. The main commitment of the agreement is the completion of a set of power sector investments which will make possible the transition from unsafe nuclear reactors to other energy sources, assuring an adequate level of energy supply. So far, this commitment has not been met. One of the main reasons for this is strong opposition from the nuclear lobby, which has an interest in halting the development of alternative energy projects.

Despite Bulgaria's commitments under the Grant Agreement, during the past 5-7 years, no attempt has been made to close down Units 1-4 of Kozloduy. To date, little progress has been made on developing replacement capacity, or for supporting programmes and projects for energy efficiency, conservation and renewables. In addition, the National Agency for Energy Efficiency was suddenly closed in 1993, and ongoing discussions about how much the country will soon need a second nuclear power plant have been promoted in the Bulgarian media.

The Bulgarian authorities have adopted the view that the country's energy situation does not allow for the closure of Units 1-4 at the Kozloduy nuclear power plant in the medium term. It is significant that there has been no public involvement in the implementation of the Agreement's requirements.

The nuclear lobby's strategy is based on the following argument: very soon Bulgaria will need more energy for its industrial restoration. This will either require that the old nuclear units are kept in operation, or that the Belene NPP should be completed. The authorities rely on the results of questionable research - for example, on the cores of units 1 and 2 - to argue that the old units are safe enough, and they maintain that with financial support the reactors could reach western standards.

The economic predictions on which the government relies to promote nuclear power do not reflect the reality of the country's economic situation. There are several economic forecasts for Bulgaria, and they all differ from the nuclear lobby's forecast. There is currently no clear consensus among officials, politicians and other experts on the country's economic future. However, the economic situation is clearly not as robust as the nuclear lobby suggests in its forecasts.

The government does not even have a short term economic strategy. In addition, all forecasts appear to rely on information from various special interests rather than on objective data. At the same time, since 1993, the government has not yet made the investments required by the grant agreement. To some extent, this is also a result of the work of pro-nuclear persons and companies.

The case of the NSA grant for Kozloduy points out weaknesses in the mechanism of the NSA. It does not take into account such important issues as political and economical pressure (especially from the nuclear industry), corruption, and a lack of transparency and public involvement in the operations of the Bulgarian energy authorities. These in turn have a major influence on the NSA's implementation process.

EBRD Projects in the Pipeline:

Power Sector Refurbishment Project The borrower is the NEK. The beneficiaries are the NEK, and the Maritza East 3 and Varna thermal power plants. Estimated total project costs are 263 m USD, of which the EBRD Loan Amount is 75 m USD. The project will be co-financed with the EIB and Export Credit Agencies. The environment category is determined as B/1. The project aims to:

• facilitate the closure of dangerous nuclear reactors;
• improve supply and demand-side efficiencies;
• improve environmental performance of thermal power plants;
• encourage progress towards a competitive market- oriented industry structure.

The project is to be re-appraised sometime in early 1998 and is still far from implementation.⁽⁵⁹⁾

Energy Conservation Investment Programme - Phase I The borrower for the project is Toplofikacia - Sofia AD. Estimated project costs are 55,244 m USD. The EBRD has not yet determined the project's environment category. The objective of the project is to implement demand-side measures to save energy by modernising and automating substations and by improving the insulation of the pipeline network of the company.

Creating an ESCO (Energy Saving Company) This project is still under negotiation. It is expected that the EBRD, a French company (related to "Compagnie Generale Des Eaux") and the municipality of Sofia will create a joint-stock ESCO. This will be part of a region-wide project in the private sector for such purposes, financed by the EBRD.

3.1.5.2 The International Bank for Reconstruction and Development

The IBRD has financed two projects in Bulgaria's energy sector. Both financed energy projects total 105 m USD and represent approximately 19 % of total IBRD lending in Bulgaria to date.

IBRD Projects Under Implementation:

Energy I Project The Government of Bulgaria initiated the negotiations in 1991. The beneficiaries are the NEK and electricity consumers - industrial and households. The IBRD loan amount is the equivalent of 93 m USD. An additional 33m USD is contributed by the NEK. By the end of March 1997, disbursed moneys amounted to 23,7 m USD.

The project was approved on May 21, 1993 and has been in effect since August 11, 1993. The expected completion date was December 31, 1996, but the completion time of the project was changed twice during a one year period. The first change extended the completion date to December 30, 1997 and a second extension moved the date to December 30, 1998. The initiator for these changes in both cases was the NEK. The project has very ambitious objectives, which were addressed to the needs of the country at the time of initiation.

The main difficulties with the project came from the Bulgarian side during the implementation process and were primarily of a financial nature. They included pricing, funding money for special purposes, and other related problems. There were additional issues of an organisational and technical nature, including the establishment of an independent pricing mechanism and the delay of the completion of the Chaira pumped storage plant.

Considering these difficulties, we conclude that the NEK is an inadequate structure to meet the requirements of the country's new energy policy. The problems of the project show that Bulgaria needs another type of organisation to manage its energy sector. The NEK's role should be limited to being the single buyer, while there should be independent and de-centralised producers and distributors.

District Heating (Pilot Project) At the beginning of 1997, at the request of the Bulgarian government, the World Bank agreed to re-allocate money from a Water Companies and Modernisation Project (Loan No 3739) to a District Heating pilot project.

The borrower is the Ministry Of Energy And Energy Resources (MEER), and the beneficiaries are 15 district heating companies. Total project costs are 12 m USD, all of which is in loans. According to the project summary document, the project is expected to be classified in environmental category B. The District Heating pilot project is designed to provide essential information on district heating consumption. This information would be used to:

• design comprehensive system rehabilitation projects, financed by different IFIs (EBRD, WB) and other sources (PHARE);
• improve system operations;
• provide management control on the customer side;
• provide incentives for reduced heat consumption;
• provide district heating companies bills for actual heat consumed not including losses incurred in the system;
• improve district heating companies' financial performance.

This emergency project is a good example of how existing sources could be used in a flexible way. The project is oriented toward the basic problems of the district heating sub-sector. These include inadequate or lacking measuring systems, large losses of heat and financial problems. Preliminary results are expected during the upcoming winter season. So far, public involvement has been nil, due to a lack of access to information about the project.

IBRD Projects in the Pipeline

Energy II Project Again, the borrower will be the NEK. Total project costs are 220 million USD, of which 100m USD will come as an IBRD loan, 50m USD from the NEK, and 70m USD must be found from other sources. The project is classified in environmental category "B" (which does not assume major environmental impacts). The overall objective is to assist with financing the Bulgarian electricity sub-sector's medium-term core investment programme, which in turn is designed to enhance Bulgaria's non-nuclear electricity supplies at the lowest cost, while reducing associated pollution.

This includes: (a) rehabilitation of part of the NEK lower cost non-nuclear generating capacity; (b) reducing NEK's currently very large losses in distribution; (c) improving electricity transmission. It is likely that the project will also include a component to replace about 500 000 - 600 000 of Bulgaria's existing electricity meters over 5 years. The environmental categorisation of this project is highly controversial, as it is contains components which will have major environmental impacts, such as the rehabilitation of one or two thermal power plants. Therefore, at least this part of the project should be classified in the higher "A" environmental impact categorisation.

A group of Bulgarian NGOs met in November 1997 with Mr. J. Moose (the task manager of the project) to discuss environmental categorisation and other aspects of the project. At that time, Mr. Moose told the group that the project was still at a very early stage and its exact components were not yet clear. Indeed, according to Mr. Moose, was it not entirely sure that the project would go forward at all.⁽⁶⁰⁾ According to information from the latest update on the project from the WB, the rehabilitation of TEC Varna may not go forward at all, as the plant might be privatised soon.

District Heating Project The borrower is the MEER (The Ministry for Energy and Energy Resources) and the beneficiaries are the Sofia and Pernik District Heating Companies.⁽⁶¹⁾ Total project costs are 475m USD, 100m USD of which come as an IBRD loan. The project is considered to be in environment category "B". The objectives of the project are:

• to rehabilitate the Sofia and Pernik district heating systems, reduce heat losses and increase efficiency;
• to reduce costs in the district heating systems and gradually raise the prices so that the district heating companies can be financially self-sustaining and will no longer have to rely on subsidies; and
• to assist with closing units 3 and 4 at Kozloduy by rehabilitating and converting the district heating plants to combined cycle operation, as specified in the NSA Agreement.

For the Sofia system, the project would involve the replacement of those sections of pipe with the highest heat leakage (around 200 km) and the replacement of most of the older substations. Similar steps would be taken for the Pernik system, which is only 15% as large and not as well studied. The two largest district heating plants in Sofia - "Sofia" and "Sofia East" - and the "Republica" plant in Pernik would be rehabilitated and converted to combined cycle operation.

3.1.5.3 The European Investment Bank

The EIB participates as a co-funder of two projects headed by the EBRD: "Maritza East II" (57 million USD) and "Power Sector Refurbishment" (in the pipeline). The Bank has no office or representative in Bulgaria so far and does not work with the public. It is also not clear what kind of energy policy they follow for the country.

The EIB is also responsible for carrying out economic analyses for the Euratom loan for safety upgrades at units 5 and 6 of the Kozloduy nuclear power plant.

3.1.5.4 Euratom

Euratom is currently preparing a loan for safety upgrades at Kozloduy units 5 and 6. The project will be implemented by a European consortium, including Siemens, Framatom and several Russian companies. The total costs of this modernisation project is expected to be 325 m USD. The Euratom loan would cover a maximum of 50 % of the total costs.⁽⁶²⁾

As of yet, the technical description of the project has not been made available by NEK or by the European Commission. There are serious concerns regarding the quality of the project, as most of the measures and technologies included in it are not those which are most urgently needed, but rather those which will tend to increase the budget.⁽⁶³⁾ The most important and urgent measures for technology replacement are not included in it, and the project is mainly focused on theoretical programs and consultancy work which would mainly profit the companies implementing the project, including Siemens, Framatom and Atomenergo. ⁽⁶⁴⁾

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