Stalemate Hits $10 Billion Czech Nuclear Plan on Funding
By Ladka Bauerova on March 15, 2012


The Czech Republic’s $10 billion plan to build two atomic reactors near the German border that could supply electricity to the Bavarian industrial heartland is unraveling over financial and pricing disputes.

CEZ AS (CEZ), Europe’s only utility with an atomic project out to bid, is beset by falling power prices and predictions that its financial muscle is too weak to safeguard investors. The Prague- based power company’s two most senior executives clashed last month on how to fund the reactors.

“The project simply won’t be financially profitable,” said Ivan Kotev, an analyst with Prague-based advisory firm Candole Partners who co-wrote an economic feasibility study of the plan in January. “It’s unrealistic,” Kotev said in an interview.

The developments are a blow to nuclear contractors Areva SA (AREVA) of France, Toshiba Corp. (6502)’s Westinghouse unit and a Russian-Czech consortium. Each is preparing bids by a July deadline that will offer to build their latest model of reactor which, in each case, has yet to run at an operating nuclear station.