Nuclearelectrica welcomes the adoption of the Law approving the signing of the Support Agreement between the Romanian State and Nuclearelectrica for the development of the National Strategic Project Units 3 and 4 of the Cernavoda NPP

Press release

Bucharest, 14 March 2023

“We welcome the adoption of the law approving the signing of the Support Agreement for the development of the Cernavoda NPP Units 3 and 4 Project. We thank the President of Romania, the Government and the Parliament of Romania. It is clear that without the involvement of the state and authorities in nuclear energy projects, they cannot be realized. Today’s vote is a concrete signal for the continuation of this strategic project for Romania, by which we will add another 10TWh of CO2-free energy to the national energy system after 2031. I am proud of the Nuclearelectrica team for the efforts they are constantly making to develop this project“, Cosmin Ghita, Nuclearelectrica CEO.

The approval of this draft law is necessary to start the activities related to Phase II of the Project, which will allow: the conclusion of contracts for the development of critical engineering necessary to update the Project; the updating of the Project budget; the structuring and contracting of the financing and the agreement of an appropriate contractual architecture for the implementation of the Project; obtaining the favourable opinion of the European Commission following the notification of the Project according to Art. 41 of the EURATOM Treaty and a positive decision in accordance with the relevant European provisions on State aid; obtaining the Nuclear Safety Authorisation for the Construction phase and taking the Final Investment Decision to proceed to Phase III (Construction).

The support agreement implies the commitment of the Romanian State to take the necessary steps to finance the Project including through: The granting of state guarantees to the financiers of the Project, within the framework of any intergovernmental support agreements or memoranda or outside such agreements; the implementation of the “Contracts for Difference” scheme and the adoption of administrative and/or legislative measures to ensure the fulfilment of the technical criteria set out in the European Commission’s Complementary Delegated Act; the contribution in kind through the quantity of heavy water and uranium octoxide related to the first load of nuclear fuel, the cooling water for the operation of the 2 nuclear units and the completion of the electricity transmission lines necessary for the purpose of connection to the National Power System and the discharge.

“The Units 3 and 4 project is an essential part of Nuclearelectrica’s investment strategy to re-energize Romania through clean energy, together with the refurbishment of Unit 1 and the Small Modular Reactors Project. Efficient, safe and clean nuclear energy will make Romania an example at regional and global level, through various support partnerships associated with major investment projects. We are investing both in the development of large capacity units, Units 3 and 4, and small modular reactors. Large-scale reactors can provide baseload, clean and affordable electricity, while SMRs can provide grid flexibility, complementarity with renewables, non-power applications such as heat and hydrogen. Both are needed to ensure security of supply and decarbonisation. The more timely we develop more capacities, with direct impact on the decarbonisation strategy, but especially on energy security, the more we will increase the balance of the system and consumer security.”-Cosmin Ghita, CEO Nuclearelectrica

The strategy for the continuation of the Cernavodă Nuclear Power Plant CANDU Project was approved by SNN shareholders in 2021 and will be implemented in three stages, in line with international experience in nuclear power plant construction.

Stage 1, the current one, started at the end of 2021, represents the preparatory stage, initiated by the capitalization and operationalization of the project company, Energonuclear S.A. This stage will last up to 24 months, during which time a set of engineering and safety documentation required for the start of the Project will be prepared/updated (update of basic licensing documents, safety guidelines, project modifications related to nuclear safety, reassessment of existing civil structures, etc.), necessary to substantiate a preliminary investment decision.

As part of this phase, on 25 November 2021, Energonuclear S.A., the project company, signed the first contract with Candu Energy, a member of the SNC-Lavalin Group and the Candu Design Authority and OEM (the original manufacturer of Candu technology) for the Project. Under the contract, CANDU Energy will provide engineering services to develop and update the documentation required for the initiation of the Project for CANDU Units 3 and 4. The target completion date for this phase is Q2 2023.

Phase 2 of the project (Preliminary Works) consists of preliminary works and is estimated to take up to 30 months. This phase will consist of the preparation of the Critical Engineering (“Limited Notice to Proceed – LNTP”) for the definition of the Project, structuring and contracting of the financing and agreeing on an appropriate contractual architecture for the implementation of the Project, obtaining the Nuclear Safety Licence for construction, reassessment of the feasibility of the Project based on updated technical and economic indicators and adoption of the Final Investment Decision (FID), to proceed to Phase III (Construction).

Stage 3 of the Project, estimated at 69-78 months, consists of mobilising the site, starting construction, commissioning and starting commercial operation of Unit 3 in 2030 and Unit 4 in 2031.

The intention of the Romanian State and SNN, in line with the new strategy, is to carry out this project in a Euro-Atlantic consortium on the basis of the Agreement between the Government of Romania and the Government of the United States of America on cooperation in relation to nuclear energy projects at Cernavodă and in the civil nuclear energy sector in Romania.

At COP 27, the US Exim Bank announced the issuance of two letters of interest for the financing of technical services provided by the US in connection with the Cernavoda Units 3 and 4 project, developed by the subsidiary of Societății Naționale Nuclearelectrica S.A.

Based on the preliminary information submitted, EXIM may consider funding up to USD 50 million from the US export contract for pre-project technical services as part of the Engineering Multiplier Program (EMP) in Phase 2 of the project. Subsequently, in Phase III of the project it may consider funding up to USD 3 billion from the US export contract for engineering and project management services for the contract to complete Units 3 and 4 of the Cernavoda nuclear power plant.

About Nuclearelectrica

The National Company “Nuclearelectrica” SA is the national Romanian company which produces electricity, heat and nuclear fuel operating under the authority of the Romanian Ministry of Energy, with the Romanian state holding 82.49% of shares and other shareholders holding 17.50%, after the listing of the company at the stock exchange in 2013.

The NPP (CNE) Cernavoda branch operates two CANDU nuclear units, which are two of the most high-performance units among the more than 400 nuclear plants in the world, a nuclear fuel factory and is in the process of carrying out an integrated fuel cycle through the procurement of a uranium concentrate processing line, in order to support the long-term investment projects of the company.

Nuclearelectrica has a major role at national level, contributing by more than 18% of the nuclear energy in the total energy production and by 33% in the total CO2-free energy production in Romania.