Lukashenko demanded compensation from Russia for the delay with the nuclear power plant

Belarus wants to receive compensation from the Russian side for the postponement of the commissioning of the Belarusian Nuclear Power Plant (BelNPP; capacity – 2.4 GW) built by Rosatom. Belarusian President Alexander Lukashenko announced this on October 31, receiving a report from the country’s Ministry of Energy on the completion of construction of the power plant.

“Naturally, according to the agreement, we raised the issue of compensation with them. There was nothing extraordinary there. But such questions were raised due to the fact that the deadlines for commissioning the station were violated, and the Russian side bears responsibility for this,” he said. At the same time, the latter, according to Lukashenko, has already proposed options for resolving the penalty: at the price of fresh nuclear fuel and at the warranty period for the main units and components of the nuclear power plant.

“We, of course, should not unnecessarily strain the Russians – we had enough electricity and still have enough, but an agreement is an agreement,” summed up the President of Belarus. Lukashenko invited the Ministry of Energy to report whether this satisfies the Belarusian side and “whether the concessions made by the Russians are sufficient.”

A Rosatom representative said that the state corporation does not comment on the commercial component of the BelNPP project “taking into account the established trusting relationship with the Belarusian customer.” At the same time, Rosatom’s commentary, written in conciliatory tones, states that the state corporation regularly “synchronizes watches” with the Belarusian side and the last time was on October 16 at a meeting between Prime Minister of Belarus Roman Golovko and Rosatom General Director Alexei Likhachev. “At the moment there are no unresolved issues,” the Rosatom press service said.

A subsidiary of Rosatom and the general contractor for the construction of the BelNPP, Atomstroyexport, signed an agreement on the construction of two power units with VVER-1200 reactors at the Ostrovets site in the Grodno region of Belarus on October 1, 2011. And on November 25 of the same year, an interstate agreement was signed on the provision of Minsk has a targeted loan of up to $10 billion, which will cover 90% of the costs of constructing the station.

Russia has already repeatedly given concessions to Belarus under this contract. For example, the terms of repayment terms and rates for state loans were revised in accordance with the wishes of Minsk. In particular, the mixed rate linked to LIBOR was replaced with a fixed rate of 3.3% per annum. Another $500 million for the project was provided in December 2012 by the Russian VEB.

The cost of the BelNPP project was estimated at $9 billion in 2013, including $6 billion for the construction of units, and $3 billion for the creation of infrastructure and a residential town. In April 2019, Lukashenko estimated the entire project at $7 billion. Russian Ambassador to Minsk Mikhail Babich then considered that the President of Belarus was “misled” about the cost of the project. An Interfax source reported in April 2020 that the projected cost of constructing a nuclear power plant, according to Rosatom, does not exceed $6 billion.

Construction of the BelNPP began in November 2013. But in July 2016, one of the subcontractors, while slinging the reactor vessel of the second unit being moved by a crane, allowed it to fall during lifting. Despite Rosatom’s assurances that, according to the results of the survey, the incident “did not cause damage to the equipment,” Minsk demanded that the housing be replaced, which was done. A reactor was brought to the site in Ostrovets, which was planned for installation at the Baltic NPP (Kaliningrad region), the construction of which was frozen in 2014. The commissioning date of the BelNPP was delayed by a year.

As a result, the first unit of the BelNPP was put into operation on November 7, 2020, but on November 10 the station stopped generating electricity. Then the plant management explained the reason for shutting down the nuclear power plant with tests. And on January 16, 2021, the unit was turned off due to the activation of the protection system. It was put into commercial operation on June 10, 2021. The second unit of the BelNPP, connected to the network in May 2023, reached 100% capacity at the end of September. On October 24, the Ministry of Emergency Situations of Belarus issued a permit to operate the unit.

Commenting on the shift in the timing of the completion of the BelNPP project, the Rosatom representative emphasized that its main stages occurred “during the difficult period” of the coronavirus pandemic and the tightening of the foreign policy situation with increased sanctions risks. “The project itself was implemented in a country that for the first time took the path of large-scale nuclear energy. We have never had the task of speeding up the construction process at the expense of safety requirements,” the interlocutor added.

An expert in the nuclear energy industry and chief editor of the industry portal Atominfo, Alexander Uvarov, believes that delays in the construction of the Belarusian nuclear power plant are explained by the “typical difficulties of a new country” in the construction of such stations. These are, in particular, errors of subcontractors, personnel errors when putting the station into operation, etc., explains Uvarov. In addition, he also considers it important to take into account the factor of the pandemic, which introduced “some organizational confusion” at the final stages of equipment installation.