THE LARGEST INVESTMENT OF THE ROMANIAN STATE, IN DANGER Three investors withdrawing from the project for the construction of nuclear Units 3 and 4 of Cernavodă

"GDF Suez" France, "RWE" Germany and "Iberdrola" Spain yesterday decided to no longer participate in the project for the construction of Units 3 and 4 of Cernavodă, the companies announced yesterday, in a press release. The investment in the two reactors, which have a power of 1,400 MW is valued at four billion Euros. Through "Nuclearelectrica", the Romanian state holds approximately 60% of the company.

The decision of the three investors was motivated by the uncertainty on the state of the economy and on the energy market, mostly stemming from the current financial crisis, which can not be reconciled with the capital required to develop a new nuclear project.

The press releases also state that the decision of the investors does not bring into question the technical quality of the project, which was recently acknowledged by the European Commission, nor the commitment of the groups "GDF SUEZ", "Iberdrola" or "RWE" to develop on the Romanian energy market. The three companies will continue other projects to develop new nuclear capacities.

Also yesterday, the Ministry of the Economy announced that it has not received any official notification from the aforementioned companies concerning a potential decision to withdraw from the project. The next meeting of the shareholders of the company that handles the project - "EnergoNuclear" - will take place on Monday, January 24th 2011.

The first shareholder that withdrew from the project was CEZ, which held a stake of 9.5% of "EnergoNuclear", the company of the project. "CEZ" sold its shares of "EnergoNuclear" to "Nuclearelectrica", the majority shareholder of the project company, in exchange for the amount of 7.4 million lei (the face value of the shares). The deal matches the stated intent of "CEZ" to focus its main investment projects in the Czech Republic and in consolidating its acquisitions made abroad. "RWE", "Enel" (Italy) and "GDF Suez" hold 9.15% of the shares of "EnergoNuclear" each, while "ArcelorMittal" Romania and "Iberdrola" hold 6.2% of the shares each.

Sources from the energy market claim that the main issue of the project is the lack of funding, especially since half of that was supposed to come from the Romanian state. The same sources also state that the project for the building of the four reactors now has no meaning without the four investors and that it needs to be redone to account for a much lower installed capacity.