site.btaNational Electric Company, AtomStroyExport Sign Settlement of Financial Relations on Belene N-Plant Project

National Electric Company, AtomStroyExport Sign Settlement of Financial Relations on Belene N-Plant Project

Sofia, October 26 (BTA) - Bulgaria's National Electric Company (NEK) and Russia's AtomStroyExport (ASE) have signed an agreement definitively settling their relations according to an arbitral award on the Belene N-plant project, the Bulgarian Energy Ministry said in a press release on Tuesday.

As provided for by a law passed by the National Assembly on September 28, 2016, this is the agreement on the basis of which payments will be made.

The arbitral tribunal in Geneva ordered NEK to pay ASE principal and interest amounting to 601,617,133 euro, after the tribunal corrected a calculating error totalling 20.9 million euro. Until this amount is paid, NEK has to pay interest of 130,000 euro daily (down from 167,000 euro before the correction). The sides reached agreement that NEK will pay ASE the full amount due on or before December 25, 2016. If the obligation is extinguished in full on or before December 15, 2016, ASE will waive the 23.8 million euro accrued in interest between June 14, 2016 and December 15, 2016. If the payment is effected between December 16 and 25, 2016, ASE will waive 55 per cent of the interest accrued since the arbitral award was rendered. Upon signature of the agreement, as a goodwill gesture NEK effected a voluntary partial payment of 5 million euro, which was deducted from the total amount of principal due.

The arbitration court has informed the parties that the calculating errors in the award will be corrected.

After the full payment to ASE, NEK will have fulfilled all its obligations under the arbitral award. NEK will only owe costs for storage and maintenance of the equipment with long lead time. The Bulgarian party will inspect this equipment by December 5, 2016, during which the related documents kept at the Russian manufacturing plants will be reviewed as well. After full payment of the amounts due, NEK will have the right to take delivery of the equipment, the press release says. The reference is to the two reactors that NEK ordered ASE to build for Belene, of which one is finished and the other is 90 per cent completed, as reported when the arbitration dispute between the two companies was settled.