Nuclearelectrica, the operator of Romania’s Cernavoda nuclear power plant, controlled by the Energy Ministry, and China’s state-owned China General Nuclear Power Corporation (CGN) on May 8 officially signed the preliminary agreement for the construction and operation of two new reactors at the nuclear plant.

“The Preliminary Investors Agreement provides the establishment of the joint-venture company (JVCO) with the sole purpose of being the technical and operational platform for the development of the Project. The deadline for setting up JVCO is 60 working days from the date of signing the preliminary agreement (May 8). JVCO is a joint-stock company set up under Law 31/1990 on companies and will have an initial duration of 2 years. CGN’s share in the project company will be 51% while Nuclearelectrica will hold the remaining 49%. Romania has obtained the European Commission’s agreement to implement contracts for difference (CfD), a new form in which energy consumers will subsidize new investment projects, and the Energy Ministry is preparing amendments to the legislation,” said energy minister Anton Anton at the press conference after the signing of the agreement, quoted by Agerpres.

“CfDs are not designed only for nuclear energy. They represent a new form of subsidy, rather aimed at encouraging capital and investors in the field of energy. We, but not only us, are on a downward slope of energy production while the consumption rises rapidly, so we need to find ways to attract investors to this area,” the minister said.

With the CfDs, investors are paid the difference up to an initially set strike price, while returning the money to a clearance house when the market price is above the strike price. The strike price is agreed such as to allow investors to get a guaranteed rate of return on investment.

editor@romania-insider.com

(Photo source: Facebook / Ministerul Energiei)