If Russia’s joint energy projects with Bulgaria are not proceeding as fast as Moscow would like them to, it is not for lack of effort on the Kremlin’s behalf. And while there has been no major breakthrough comparable to the signing of the "grand slam" of agreements during Vladimir Putin’s visit to Sofia in January 2008, compounded by the change of government in Bulgaria raising the prospect of more setbacks than progress in the future, there has been inexorable, if slow, forward movement.

Visits by Russian top-level executives to Sofia in mid-February, have not elicited much in the way of actual progress, but were indicative of the tenacity of the Russian companies involved in pursuing the projects.

First came the trip of Sergey Kirienko, the chief executive of state nuclear company Rosatom, the parent company of Atomstroyexport, contracted to build two 1000MW light-water reactors at Belene on the Danube River for four billion euro.

On February 12, Kirienko met Bulgaria’s Economy and Energy Minister Traicho Traikov to discuss the terms of a loan that would keep the project going while the Bulgarian Cabinet reviews its own approach and seeks new strategic investors.

The global credit crunch and ongoing opposition from environmental groups have thwarted the efforts of French banking group BNP Paribas to raise funding for the project, with reports in France claiming earlier in February that the bank resigned its mandate.

Putin’s offer for a 3.8 billion euro loan, which would have covered all but five per cent of Atomstroyexport’s contract costs, was initially rebuffed, but negotiations on the issue were launched under the tripartite coalition after it became clear that BNP Paribas was unsuccessful in its funding drive.

Having earlier dropped its demands for state guarantees, Rosatom is now reportedly ready to put up two billion euro in funding, which would cover construction costs for two years, during which period Bulgaria is expected to finalise its new strategy and have enough time to pick new investors.

The new strategy will see Bulgaria relinquish its control by keeping less than a majority stake – that figure could be between 20 per cent and 30 per cent. For months after Germany’s RWE pulled out of the deal to buy 49 per cent in Belene, media reports in Bulgaria and Russia said that Rosatom was interested in buying some of the shares that Bulgaria will put for sale. State-owned Bulgarian Energy Holding was expected to call for offers, by end-February, to pick an adviser that would draft the new government strategy and prepare the strategic investor tender.

Following Kirienko’s visit, Bulgarian daily Dnevnik said that Rosatom wanted a stake of between 30 per cent and 35 per cent in return for the loan, quoting unnamed sources familiar with the talks.

Traikov did not offer details on the talks, saying only that the nuclear plant could be built because of the large amounts already invested in it. Bulgarian Prime Minister Boiko Borissov, speaking on February 17, was more forthright, saying that "we continue working on the Belene project and will say whether it can ultimately be turned to profit."
With billions of leva already spent on the project and contract termination damages equally high, Bulgaria had no choice but to continue. "I hate to say it, but the previous government brought us to the point of choosing the lesser of two evils," Borissov said, as quoted by Bulgarian news agency BTA.