Brazil narrows field to China, Russia, France for Angra 3 nuclear partner

CNNC International

23/10/2019 19:29

By Anthony Boadle
    BRASILIA, Oct 23 (Reuters) - Brazil's state nuclear power
company Eletronuclear plans to complete its long-delayed Angra 3
plant by partnering with either China's National Nuclear
Corporation (CNNC), France's EDF  EDF.PA  or Russia's Rosatom,
its president Leonam Guimaraes told Reuters.
    Eletronuclear will decide by the end of the year whether to
create a subsidiary joint venture or if the foreign partner will
become a minority shareholder in the state company, which would
entitle it to a stake in its existing Angra 1 and 2 nuclear
power plants, Guimaraes said.
    Speaking in an interview on Tuesday, he said the partner
would require deep pockets, as completion of Angra 3 will
require 15 billion reais ($3.7 billion) on top of the 9 billion
reais already invested.
    "We are looking for an international partnership to invest
in the completion of Angra 3 and that partner would own part of
the plant until the end of its life," he said.
    Under Brazilian law, the partner must have less than 50% of
the voting capital.
    In June, Eletronuclear sounded out market interest in a
partnership for Angra 3 with invitations to 10 foreign firms,
Guimaraes said. Seven replied but the most interested are CNNC,
EDF and Rosatom, he said.
    CNNC executives visited Angra 3 in June and reaffirmed their
interest in completing it and building future plants in Brazil.
    U.S. company Westinghouse, which is owned by Toshiba Corp
 6502.T , and France's Framatome, majority owned by EDF, were
also interested. However, they are suppliers of nuclear
technology and Eletronuclear is looking for a partner to help
build the rest of Angra 3, Guimaraes said.
    South Korea's Kepco Engineering and Construction and China's
State Power Investment Corporation also showed interest in Angra
3, located on the coast south of Rio de Janeiro, but seemed less
committed to exploring a partnership, he said.
    The plant was first planned in the 1980s but dropped due to
lack of finance. Building restarted in 2010, but Eletronuclear
was hit by a corruption scandal in 2015 and stopped paying
contractors such as French company Areva, which was installing
the Siemens-designed reactor technology now owned by Framatome.
    Angra 3 is 70% finished and 80% of the nuclear reactor
equipment has been bought, Guimaraes said. Eletronuclear spends
25 million reais a year on upkeep and insurance for the
construction site and nuclear technology, he said.
    That does not include interest payments on 10 billion reais
in loans from national development bank BNDES to build Angra 3.
    Eletronuclear is a subsidiary of state-run electric utility
Eletrobras  EKET6.SA , which the government plans to privatize,
although the nuclear power unit will be spun off and remain
under state control.
    President Jair Bolsonaro, who took office in January, has
pledged to complete Angra 3 and study new plants in a push to
expand the contribution of nuclear power to Brazil's electricity
output, from 3% currently. 
    Guimaraes said two potential sites for future plants have
been identified, one in the northeastern state of Pernambuco and
another in southeastern Minas Gerais state.
    Brazil has had to buy uranium concentrate for Angra 1 and 2
on the global market, mainly from Canada, Russia and Kazakhstan,
due to a halt in output over licensing at the only domestic mine
in operation, in Bahia state, Guimares said.
    A new open pit mine in Bahia near the first mine should be
licensed by year-end, he said.

 (Reporting by Anthony Boadle; Additional reporting by Luciano
Costa; Editing by Brad Haynes and Tom Brown)
 ((anthony.boadle@tr.com +55 61 98204-1110;  https://twitter.com/anthonyboadle;))