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Can a No-Name U.S. Company Save Bulgaria's Struggling Nuclear Plant?

It doesn't help that the little-known firm is probably a front -- for the Kremlin.

RTR3D0UQ-615.jpgWorkers walk near the construction site of Bulgaria's second nuclear power plant in Belene. (Stoyan Nenov/Reuters)

SOFIA -- A languishing Cold War saga surrounding an abandoned nuclear plant in Bulgaria is coming to life again, and this time around, its players include an obscure U.S. power company in the middle of an energy-centered standoff between the United States and Russia.

On Sunday, Bulgarians went to the polls to decide the fate of the nuclear power plant at Belene, a town of 10,000 on the Danube, which many locals say has been held hostage to geopolitics in this southeastern European country, and one of the newest EU members. With 70 percent of the vote now in, the Central Elections Commission announced Monday that support for the plant had topped 60 percent.

And even though voters chose to revive the plant, the referendum is unlikely to settle questions over the facility's opaque financing or Bulgaria's energy future.

The plant was initially designed in the 1970s by Russian engineers, and some of the installations were built with Soviet backing in the 1980s.

With the unraveling of the Eastern bloc in 1989, however, the project was abandoned for more than a decade, ostensibly due to a lack of money, although many Bulgarians blame the regional energy competition between Bulgaria, Romania, Turkey, Greece, and several former-Yugoslavia countries backed by the geopolitical interests of Western powers.

"France, which took the lead in Europe after Germany became preoccupied with its unification, threw its weight behind the rival Romanian Cernavoda project," says Veselin Avramov, an independent political analyst in Bulgaria. "This was a considerable blow to Belene and the Bulgarian nuclear program."

The first unit of Cernavoda opened in 1996, or roughly at the same time when Belene was originally scheduled to become operational.

The public debate over whether Belene should be completed resurfaced in the early 2000s when Bulgaria bowed to European and international pressure over safety concerns and agreed to close down its oldest four nuclear reactors at the nearby Kozlodui plant. Many Bulgarians saw the closures as a blow to national pride and to the country's energy independence.

With no prior experience with nuclear power plants, little registered investment capital and no Internet presence of its own, some say Global Power Consortium fits the profile of a straw company.

Before the shutdown of the first two units in 2002, the combined output of the four reactors accounted for some 20 percent of Bulgaria's annual electricity production, and made up the lion's share of Bulgarian energy exports to the region. Belene would compensate for this drop in output, supporters of the proposed plant say.

Still, to many Bulgarians, Belene remains a problematic conduit for Russian influence. Pro-Western forces on the political right oppose the project on grounds that it would increase Sofia's dependence on Russian technology. Bulgaria already imports more than 90 percent of its natural gas from Russia, and Russian firms own the only Bulgarian oil refinery.

Meanwhile, the Bulgarian Socialist Party, a successor to the Communist Party and widely perceived as pro-Russian, has been Belene's main supporter.

In 2006, Bulgaria's Socialist party prime minister, Sergei Stanishev, signed a contract designating the Russian firm Atomexportstroy as the builder. The current center-right government of Prime Minister Boiko Borisov attempted to scrap the deal in early 2012, resulting in the Russian firm filing a €1-billion lawsuit against Bulgaria to pay for parts already ordered.

Over the summer of 2012, the Socialist party collected more than 500,000 signatures in support of the plant, forcing Sunday's referendum on the issue.

In recent years, U.S. companies including Chevron have pushed for developing other sources of energy to create an alternative to the Belene nuclear project, mainly in the form of natural gas extracted by hydraulic fracturing, or fracking.

Still, the proposal has been highly controversial given fracking's potential for environmental damage and the location of underground deposits of natural gas beneath prime agricultural land. A number of protests against fracking took place in 2010 and 2011, and in January 2012, parliament banned such explorations, against the advice of the United States ambassador in Bulgaria.

In June, as a result of intensive lobbying, parts of the ban were lifted, and many Bulgarians believe that eventually it will be withdrawn.

Belene, by contrast, is considered relatively safe. Despite warnings by environmental groups that the plant would be situated in a quake-prone zone, several inspections by the International Atomic Energy Agency have concluded that its designs feature advanced safety mechanisms with multiple redundancies which would protect it against accidents ranging from powerful earthquakes to airplane crashes.

Presented by

Victor Kotsev is a freelance writer based in Sofia, Bulgaria.

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