A Europe-wide NGO campaign recently won a significant victory: German energy giant RWE cancelled its investment into the Belene nuclear power plant in Bulgaria. Over the past three years, environment organizations from Germany, Bulgaria, France, Italy and other countries campaigned against Belene, which they consider to be among the most dangerous nuclear projects planned in Europe.
The site for the Belene nuclear power plant is situated in an earthquake prone zone in the North of Bulgaria and the planned reactors are of a previously untested Russian design. As Albena Simeonova, an organic farmer and leader of the local resistance movement says: “The seismic risk is immense. During the last large earthquake hundreds of buildings collapsed and over 120 people were killed only a few kilometers from the Belene site. Building an nuclear power plant here means playing Russian Roulette with the safety and health of millions of people.”
Although Belene is only one of some 30 nuclear projects on the planning table in Eastern Europe, campaigners attach special significance to this victory. “Belene was the first of the Eastern European nuclear projects to seek financing from Western banks and investors,” says Jan Haverkamp, Greenpeace’s energy expert for Eastern and Central Europe. “The fact that it has failed sends an important signal regarding the financial viability of all of these plans.”
In 2006 and 2007, well before the financial crisis began, over a dozen international banks had turned down loan applications for Belene. In 2008, however, the project seemed revived, when RWE decided to become a major investor and signed a contract to acquire 49% of its equity. RWE, however, had not reckoned with the opposition it would face from the small, but determined German environment organization urgewald.
When it became obvious that RWE’s Management was oblivious to rational arguments, urgewald initiated a broad-based public campaign, which led some 30,000 German citizens to send personal letters and petitions to RWE. However, the company’s CEO, Jürgen Grossmann, proved to be impervious to public opinion. Urgewald thus shifted its campaign focus to the company’s Supervisory Board, which is made up of major shareholders, unions and mayors of three municipalities that hold large amounts of RWE stock. Together with German anti-nuclear organizations, urgewald organized a week of protests in 50 cities, highlighting shareholders’ responsibility for an investment in Belene. This had a strong impact on the mayors and on individual shareholders such as Allianz. As a corporation, whose major business is life insurance, Allianz did not want to be connected in the public eye with a potentially life-threatening project. In addition, urgewald sent a detailed critique of the project to RWE’s 700 largest shareholders, many of which also became concerned about the serious and critical risks that an investment in Belene poses.
Essentially, the campaign in Germany managed to publicly raise so many doubts about Belene that RWE management had to soothe its Supervisory Board by promising to clear all “open questions” before actually contributing its share of the equity for the nuclear power plant. This bought time and time brought a change of Government in Bulgaria. The elections in Bulgaria in July 2009 ousted the post-communists from power and the new government immediately announced its intention to evaluate the large Russian energy projects that its predecessor had lined up. At the time this article appears, this evaluation is still ongoing, but the first results have confirmed what critics have been saying all along:
Belene is not needed to meet Bulgaria’s power needs. It is geared wholly towards export, which makes it financially risky as it is difficult to predict what will be the future market price for electricity in the region. Belene is incredibly expensive: According to the new Bulgarian Government, it will cost at least 10 billion Euros (15 bn US$) to bring Belene on line. The former Government had consistently misrepresented the facts by claiming that the project’s price tag amounted to only 4 billion Euros. Corruption played a major role in the development of the project and the 430 million Euros, which were already sunk into the preparation of Belene have more or less disappeared into dark channels. The new Government has, however, still not canceled the project as its predecessor had already signed a binding contract with the Russian contractor Atomstroyexport for the delivery of the nuclear power plant. This contract foresees a steep penalty of 800 million Euros if Bulgaria steps back from Belene. The Government has therefore announced that it will reduce its own share in the project from 51 to 20% and intends to search for new investors. (see also Nuclear Monitor 695: "Belene nuclear project is sinking")
Just two days after this announcement, RWE, however, notified the Bulgarian authorities that it will renege from its investment plans. Well-informed sources within the company state that this decision was based on RWE’s inability to find further investors and its negative assessment of the project’s profitability. “Better late than never,” comments Heffa Schücking, director of urgewald. “We are, however, still amazed that it took the company 18 months to figure this out. Belene was never an economically viable project and there were innumerable statements from prestigious Bulgarian economists to this effect.”
Schücking states that RWE’s pullout is almost certain to be the final nail in the project’s coffin. After all, Belene is now officially a project without private investors, without financing and missing 80% of its equity. “It’s hard to see how it could come back,” she says, but if it does, NGOs throughout Europe are ready to push it back under the ground.”