Romania to sign agreement with Chinese investors for nuclear plant expansion

Romania’s nuclear power producer Nuclearelectrica is close to signing an agreement with Chinese partner China General Nuclear Power Corporation (CGN) and CGN’s European subsidiary on setting up the joint company that will develop two new reactors at the Cernavoda nuclear plant.

Next week, Nuclearelectrica’s shareholders will mandate the company’s management to sign the contract, Profit.ro reported.

The state holds 80% in company’s shares, with investment fund Fondul Proprietatea as the other significant shareholder.

The Romanian and Chinese partners agreed in January that a key element of the partnership is the Contract for Difference (CfD) mechanism, which will allow the joint company to maintain guaranteed profitability. In March, the Ministry of Energy launched a public document on the general principles of this type of state aid, whereby investors in low-carbon production capacities, such as nuclear ones, are guaranteed an energy sales price, the “exercise price” calculated in line with the guaranteed profitability. An entity is set up to top-up the market price up to the exercise price but also to collect the supplementary revenues generated by the recipients of the programmes in (less likely) case the market price is higher than the exercise price.

(Photo source: Nuclearelectrica.ro)