Romanian state-controlled nuclear power group Nuclearelectrica (BVB: SNN), whose shares dropped by 2.4% on July 28 after a report published by the control body of the prime minister questioned the partnership with Nova Power & Gas (NPG) for the small modular reactors (SMR) project at Doicesti, in a note to investors, responded to the government’s report advocating in favour of its decisions. 

In particular, Nuclearelectrica said that the project company RNP has not yet approved a payment of over EUR 20 million claimed by NPG for the improvements to the plot of land sold to RoPower Nuclear (RPN) for EUR 25 million. A forensic report was commissioned before the approval of the payment. 

Regarding the financing of the feasibility studies, provided so far by the state company alone, Nuclearelectrica argued that the association with NPG was made, among others, based on NPG’s availability to provide financing for the project under the same terms as Nuclearelectrica. It remains unclear, however, why then only Nuclearelectrica has provided USD 243 million financing to a project where its equal partners contributed only EUR 1 million capital each.

Regarding the decision of picking up the location of the project, listed as the second-best by the consultant, Nuclearelectrica explained that it did not breach the legislation and, in particular, the Company Law. 

In a response to the government’s report, as cited by Digi24, Nova Power & Gas argued that the value of the land sold to the project company reflects the improvement works estimated at EUR 40 million. 

The company stated that the project company RPN still has the contractual option to opt out of the acquisition of the site. 

"RPN cannot record losses from transactions with Nova Power & Gas, because it had and still has notifications that give it the right to fully reverse the site purchase transaction, to fully recover the payment and not to pay for the additional work. This right of RPN is in force until October 1, 2026 inclusive," the statement said. It also claimed that, after the transaction was completed, the purchased assets were valued at at least EUR 63.5 million.

The prime minister's control body announced on July 27 that the Doicesti project is 20 months behind schedule and costs have increased by USD 3.8 billion. The report also criticised the lack of a comparative analysis that was supposed to substantiate the site selection decision.

On July 15, the Ordinary General Meeting of Shareholders of Nuclearelectrica decided to continue the initial Development Strategy of the SMR project, approved in September 2022.

iulian@romania-insider.com

(Photo source: Nuclearelectrica.ro)