Construction of the second Bulgarian nuclear power plant at Belene was not expected to start before the end of 2008, as the National Electric Company (NEC) so far was unable to find a bank to finance the construction despite guaranteed returns, Bulgarian daily Klasa said.

Since January 2007, NEC had been looking for a bank to provide a cheap loan of around 3.2 billion euro. Total investment in Belene would be 3.997 billion euro, but NEC had secured 250 million euro through a syndicated loan with BNP Paribas Bulgaria. Another 300 million euro was expected to be provided by Euratom and if needed, NEC would loan a another 300 million euro from the European Investment Bank (EIB).

Where the missing three billion euro would come from was not clear and the team at NEC, responsible for the project was in a panic, Klasa said. The large western banks were demanding high interest rates, which would make the nuclear power plant more expensive than the current almost 4 billion euro. The price of electricity from Belene could reach six eurocent, instead of the promised 3.8 to 4 eurocent, experts said.

"We're hoping that, now that the European Commission has approved the project, more banks would be interested," Klasa quoted an anonymous team member. But according to banks, the situation was not that good, the financial crisis caused by the mortgage loan crisis in the US had encouraged large investment banks to limit funding and to increase the costs of credits.

The selection of a strategic partner for NEC in the Belene project, which should have been made by the end of November 2007, has been delayed as well. New offers for 49 per cent of the shares in the nuclear power plant were expected by the end of June. The offers should include a proposal for the funding of the remaining 49 per cent.

"If an acceptable offer is not found, NEC could be left with no other choice but to accept the offer from Russian Atomstroyexport," Klasa quoted chief executive director of NEC, Lyubomir Velkov as saying.

In December 2006, Atomstroyexport and the Russian Federation offered NEC a state guaranteed credit of 3.8 billion euro. Conditions for the new loan could be discussed as early as January 2008 when Russian president Vladimir Putin would visit Bulgaria.

If that would happen though, it was not expected to be announced earlier than July or August 2008, Klasa said.