Romania's Ministry of Energy, as the majority shareholder (82%), required the nuclear group Nuclearelectrica (BVB: SNN) to go ahead with the deal by which company's JV project with private partner Nova Power and Gas (NPG) will purchase from the latter (NPG) the plot of land for the development of the project – the small nuclear reactors (SMR) complex at Doicesti, according to a note to investors published by SNN.

The price of SNN's shares dropped by 4% when the note was sent to shareholders before the end of the March 21 trading day.

In January of this year, the Ministry of Energy's representatives at the shareholders' meeting abstained from endorsing the procedures for the purchase of the land, according to Profit.ro.

The joint-venture agreement sealed in September 2022 by SNN and NPG reportedly provisions for the sale of the land at the book value (plus supplementary costs incurred) rather than the market value as proposed currently under the note submitted for endorsement to SNN's shareholders, according to Profit.ro.

State-controlled Nuclearelectrica (SNN) and Nova Power and Gas (NPG), owned by Romanian businessmen Teofil Mureșan, Simion Mureșan și Marian Pantazescu, formed in September 2022 a 50:50 joint venture (Ropower Nuclear, the project company) with a view of developing a small modular reactor (SMR) project estimated to cost between EUR 4-6 billion. 

NPG was selected by Nuclearelectrica as a partner precisely because the former owned the site of a retired coal-fired power plant (Doicesti) that was seen as fit for the project because of the existing facilities. While NPG is active in the energy utilities market, its expertise on a project of such a magnitude as the SMR project and its financial resources (including the guarantees it can provide) are limited compared to that of Nucleareelectrica. 

The price paid by Ropower Nuclear to NPG for the plot of land will be the market value, determined under normal market conditions, in compliance with all relevant legal provisions, according to the text of the note sent to Nuclearelectrica's shareholder for endorsement in the general shareholder meeting of April 8.

The price will include all the expenditures NPG incurred with the land: the value of "all expenses that NPG has incurred in connection with any finance costs, capital costs, costs in connection with any improvements, betterments, decontamination and alterations to the land from the date of NPG's acquisition of ownership of the land until the date of transfer of the Nuclear Power Plant Land from NPG to the Project Company, including all expenses related to the maintenance, conservation, and upkeep of the land, incurred by NPG between the date of signing of the agreement and the date of transfer of the NPG Property from NPG to the project company, it being understood that the project company may request NPG to provide documentary records reflecting this value and that they are not already included in the above-mentioned valuation report."

iulian@romania-insider.com

(Photo source: Nuclearelectrica.ro)