Belarus is again trying to obtain compensation from Russia for the untimely construction of a nuclear power plant

For the delay in launching the country’s first nuclear power plant worth $5.4 billion, Belarus is demanding compensation from Russia. In 2020, for the disruption of the commissioning of the first power unit due to the replacement of the reactor vessel, Minsk has already achieved a reduction in the rate on the Russian state loan (for which the nuclear power plant was built) to 3.3%. The shift in the launch of the second unit has already allowed Belarus to agree on an extension of the loan repayment period, and now Minsk is seeking a discount on nuclear fuel. Moreover, according to the Russian side, the delay in commissioning of the second power unit was due to the fault of Belarusian subcontractors. Minsk itself was not interested in commissioning the nuclear power plant on time, Kommersant’s interlocutors say, since now it cannot export energy from the station, and such a volume of power is not required within the country.

Belarus demanded compensation from Russia for the delay in commissioning of the nuclear power plant, President of Belarus Alexander Lukashenko said on October 31. He noted that the deadline for commissioning the station “has shifted slightly,” and the responsibility for this “bears the Russian side.” Mr. Lukashenko clarified that Russia proposed to reduce the cost of nuclear fuel and sell it at a price “the same as for its stations in the country.” Minsk can also receive a five-year warranty period for main components. Rosatom responded to this by saying that the project was last discussed on October 16 at a meeting between the head of the state corporation, Alexei Likhachev, and the Prime Minister of Belarus, Roman Golovchenko. “At the moment there are no unresolved issues,” the state corporation said.

This is not the first time Mr. Lukashenko has demanded compensation from Russia for what he believes is a lengthy construction of a nuclear power plant. The first shift in launch dates occurred due to an incident at the site: summer 2016 The reactor vessel touched the ground during overload due to weakening of the lines. At the request of Belarus, Rosatom provided another reactor intended for the Baltic NPP (Kaliningrad region), the construction of which the company refused. After the reactor incident, Mr. Lukashenko for the first time demanded to improve the terms of the Russian state loan.

Initially, the loan had a “mixed” rate with an average value of 4.11% per annum, but in 2020 Russia reduced it and fixed it at 3.3%.

The loan term was extended until the end of 2022, and the start of repayment of the principal debt was moved to April 2023. The launch of the first power unit is planned for autumn 2019.

However, it was still not possible to launch the BelNPP within this period. First power unit introduced into commercial operation on June 10, 2021, that is, approximately seven years and seven months from the moment the concrete was poured. They wanted to commission the second power unit in the fall of 2021, but in the end it was connected to the network only on May 13, 2023, that is, about nine years after the start of construction. The unit is still in pilot operation.

In 2023, Belarus achieved another change in the conditions for the state loan. Russia has extended the period for using the loan for another year – until the end of 2023.

The start date for repayment of the principal debt was also postponed by a year – until April 1, 2024. As the Ministry of Finance writes in the explanatory note to the new agreement, the total volume of use of the loan, according to Rosatom’s estimates, will be about $5.36 billion, including about $100 million in 2023. The Ministry of Finance did not respond to Kommersant’s request.

Rosatom does not disclose the reasons for the shift in the commissioning of the second power unit, but reminds that “the main stages of the construction of the nuclear power plant occurred during the difficult period of the pandemic and the tightening of the foreign policy situation with increased sanctions risks.” They note that the project “was implemented in a country that for the first time took the path of large-scale nuclear energy.” The explanatory note of the Ministry of Finance notes that “since February 2022, according to Rosatom, the schedule for the commissioning of the second unit has undergone changes, mainly due to the actions of Belarusian subcontractors (about 90% of the project has been implemented).”

Kommersant’s sources have repeatedly reported that the process of commissioning facilities was delayed due to delays by local regulatory authorities.

The fact is that Minsk was interested in delaying the commissioning of the nuclear power plant: in 2011, Belarus expected to sell the power plant’s output to the Baltic states, but the EU states refused this energy. Minsk now says it will increase domestic energy consumption, although it has not provided a detailed plan for this. The most likely option is the start of energy supplies from the BelNPP to Russia under bilateral contracts from 2024 (see “Kommersant” dated April 12, 2022).

Despite the launch shifts, the BelNPP can still be considered the cheapest in the world. If the construction of two BelNPP power units will cost $5.36 billion, then the specific construction costs will be $2.24 thousand per 1 kW of power, calculated Kirill Rodionov from the Institute for the Development of Fuel and Energy Technologies. For comparison: the specific costs of constructing nuclear power plants in the United States in 2022, according to IEA estimates, were $5 thousand per 1 kW, in the EU – $6.6 thousand, and in China and India – $2.8 thousand, the expert notes.

Polina Smertina