SLOVENIA: SECOND NUCLEAR PLANT MAY BE DELAYED

C O N F I D E N T I A L LJUBLJANA 000237 SIPDIS E.O. 12958: DECL: 08/01/2019 TAGS: ENRG KNNP EINV SI SUBJECT: SLOVENIA: SECOND NUCLEAR PLANT MAY BE DELAYED Classified By: CDA GShelton, Reasons 1.4(b),(d) Summary -------------- ¶1. (SBU) During the Charge d'Affaire's (CDA) July 23 visit to Krsko, the site of Slovenia's only nuclear power plant, which it shares with Croatia, Post learned of changes to the Slovenian energy industry that may postpone the timeline for a second nuclear power plant in Slovenia. This was disappointing news to Westinghouse, which is eager to supply the Slovenians. End Summary. Possible Delay in 2nd Power Plant -------------- ¶2. (SBU) CDA traveled to Krsko with representatives from Westinghouse to discuss the timeline for a second nuclear reactor and to present a united front in support of American business. In conversations with Franc Bogovic, the Mayor of Krsko, the directors of Krsko Nuclear Power Plant (KNPP) and Gen-Energija, the state owned company that owns 50% of KNPP, Post learned that the Slovene government planned to merge Gen-Energija with Holding Slovenske Elektrarne (HSE),another state owned energy company in Slovenia. The Mayor and the director of Gen-Energija worried that the merger could delay the second reactor, however they were not worried about the possibility of no second nuclear power plant at all. They cited Slovenia's growing energy needs and demands to curb carbon emissions. They also theorized that the merger's goal was to bolster HSE's financial statement and credit rating in order to procure the necessary financing to build a sixth coal power plant. Executives at Gen-Energija stated their company made a profit last year and will make a profit this year due to their energy trading operations in the region and their abundant and cheap power from hydro-electric and KNPP, making it an attractive asset to loss-making HSE. ¶3. (C) The government officials we have spoken with have indicated the government is still considering plans for a second nuclear power plant. During a July 22 discussion with CDA, Foreign Minister Zbogar said the government would start discussions about a second reactor in early 2010. He and others have indicated that the government will likely hold a referendum on whether to build a second nuclear power plant. Preparing the Groundwork -------------- ¶4. (SBU) The Mayor of Krsko confirmed that the Krsko City Council in early July voted to have the nuclear waste repository in Krsko. This move was the final political hurdle for the repository. The next steps will be the design phase and the selection of a contractor to build the repository. KNPP welcomed the move, since the plant has only enough on-site space to store low level radioactive waste until 2013. The repository also resolves the issue of the disposal of waste from a second nuclear power plant. ¶5. (SBU) The Mayor and Gen-Energija both welcomed Westinghouse's proposal to have a Supplier's Day Event in October 2009. Westinghouse plans to invite potential local suppliers to meet with them to demonstrate the benefits of a Westinghouse plant to the local economy should it win a future tender for the second nuclear power plant. Comment -------------- ¶6. (C) The joint Embassy-Westinghouse trip highlights the close support by Post for American business. Westinghouse and the Embassy are making a coordinated effort to stay in the forefront as the government decides a second nuclear power plant. SHELTON