Chinese company qualifies for the next phase of the investors’ selection for the Cernavoda project

China General Nuclear Power Corporation (CGN) was declared eligible for continuing the investors’ selection procedure for the project regarding the completion of Units 3 and 4 of the nuclear power plant from Cernavoda. The Chinese corporation was the sole investor submitting the qualification documentation and will be able to access to the data room of this project, Nuclearelectrica announced through a press release.

The selection procedure was launched on August 27, 2014, allowing a two-week period for interested investors to send the required documentation which consists of a letter of interest, identification documents, documents proving the relevant expertise, as well as documents attesting the financial capability.

“The qualified investor fully complies with the requirements provided in the qualification documentation in terms of technical and nuclear safety standards and also in terms of  financing capability for such a project, which is essential for the development of a new nuclear project”, said Daniela LulachE, CEO Nuclearelectrica.

China General Nuclear Power Corporation’s interest in the Cernavoda project was foreseeable given the talks had with delegates of Romania’s Government over the time. In late-June, Constantin Nita, the Minister of Economy met with a Chinese delegation, including representatives of CGN, on projects in the energy industry investors from China are seeking to develop. At that time, Nita said that negotiations on the construction of the nuclear reactors at the Cernavoda power plant are in advanced stage, anticipating that they will be carried out in the second half of 2014.

CGN is China’s largest nuclear energy producer, with 11 operational units as of August 2014, with a total installed capacity of 11.6 GW, to which 15 GW will be added after the commissioning of 13 additional nuclear units which are under construction. Last year, the corporation, with net assets valued at 37.5 billion euro reported a turnover of 4.25 billion euro.

According to the timetable for the investors’ selection, CGN will have to purchase the tender dossier and to submit the participation guarantee worth 100,000 euro in order to have access to the data room which will include information on the project. Subsequently, the company will be evaluated in order to possibly enter the negotiation phase. Afterwards, the designated investor should sign the Memorandum of Understanding for the implementation of the project, which will be followed by negotiations on the articles of incorporation of the project company and investors agreement.       

Nuclearelectrica’s strategy with respect to the continuation of this project supposes the setting up of a joint venture with the private investor selected in which will initially have an interest of 49 percent. Hence, the nuclear company’s initial contribution to the share capital of the project company will amount to maximum 2 million euro. Also, the value of the investment of Nuclearelectrica in EnergoNuclear, its subsidiary established in 2009 for developing the project, will be transferred to the company appointed to run the project, according to the notification in question.

Completion of this project which requires funds of about 5 billion euro, in addition to existing assets owned by Nuclearelectrica, EnergoNuclear and the Romanian state, is part of Romania’s Energy Strategy 2007-2020, being considered a priority for the development of the energy sector.  The two new units will use CANDU 6 technology and are expected to have an installed capacity of at least 720 MW each.