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Romania looks to UAE to fund $7.3bn nuclear reactors

Utility Pole, Cable, Power Lines REUTERS/Alexander Ermochenko
Romania's energy minister Sebastian Burduja said a final investment decision to build the units was expected in 2026-2027

Romanian state-owned nuclear power producer Nuclearelectrica’s two planned new reactors are expected to cost at least €6.5 billion ($7.29 billion), energy minister Sebastian Burduja said.

He added that Nuclearelectrica was still negotiating, with a view to signing a deal later this year, with the Lavalin group, which owns the Candu (Canada deuterium uranium) technology already used by Romania’s two 706 MW reactors. Together they account for roughly a fifth of Romania’s power production.

The company plans to refurbish one of its existing reactors as well as add two new ones using the same Candu technology that uses deuterium oxide (heavy water) as a moderator and coolant and natural, rather than enriched, uranium as a fuel.

“The aim is to proceed to signing a deal with Lavalin this autumn, with the group committing to designing and supporting the project, including at the European Commission,” Burduja told Reuters in an interview.

As well as negotiating costs to take account of inflation, the ongoing talks concern a financing structure and how to retrofit existing infrastructure in line with requirements following the 2011 Fukushima nuclear disaster.

Prior cost estimates for the units ranged from €6 to €7 billion. Burduja said a final investment decision to build the units was expected in 2026-2027.

Exim Bank US will provide a $3 billion loan for the units, and Burduja said funding will also come through similar mechanisms from Canada and South Korea.

Burduja said it was possible other agreed foreign partners, such as the United Arab Emirates, could help to finance the project.

The new units would increase the share of Romania’s nuclear generation, which is emissions-free, to a third of its energy mix and could also allow it to supply power to neighbouring Moldova.

As a member of the European Union, Romania is seeking to lower its carbon emissions to meet the bloc’s emissions reduction goals and also to shore up security of supply, which has become a more urgent issue since Russia’s invasion of Ukraine led to a fall in Russian gas supplies.

Burduja said the ministry was working on setting up a low carbon energy support scheme based on contracts for difference (CfD), which allow a price for electricity to be set at an agreed level. He said Romania will set up a fund with the help of EU money to implement the scheme.

He also said Romania will tender 5 gigawatts’ worth of wind and solar projects in 2024-2025 to be funded through CfDs, and an additional 5GW at a later date.

Romania’s economy ministry has an 80 percent stake in Nuclearelectrica, which has a market capitalisation of 13.7 billion lei ($3.11 billion).