COVID-19 to delay Brazil nuclear plant -Eletronuclear

Lower demand for electricity and a currency slide during the coronavirus crisis will push completion of Brazil's third nuclear reactor into 2027, the head of state-run nuclear power company Eletronuclear told Reuters.

Eletronuclear president Leonam Guimaraes said Brazil still plans to find a partner by 2023 to help finish and operate the long-delayed 1,400 megawatt Angra 3 nuclear reactor, with companies in China, Russia, France and South Korea among possible candidates. Construction, which began in 2010, is set to restart this year after a long delay caused by financial difficulties and corruption investigations.

So far, 9 billion reais ($1.6 billion) have been spent on the project. Guimaraes said the "brutal" 15-20% drop in power consumption caused by the coronavirus pandemic means future demand is uncertain.

"It is a small delay we are talking about, from November 2026 to the next year," Guimaraes said in an interview on Thursday. Volatility of the real, which has weakened by 28% against the dollar this year, is another uncertainty.

But Guimaraes said the currency impact will be relatively small because only 35% of the 14.5 billion reais of investment needed to finish the plant will be paid in foreign currency, in euros, for the Framatome technology, majority owned by France’s EDF. A key March 25 meeting of Brazil's Private Public Investment council was suspended due to the pandemic, meaning the business model devised by major lender, state development bank BNDES, has yet to be approved.

But Eletronuclear's owner, Eletricas Brasileiras SA , has agreed to maintain its investment for this year of 1 billion reais to get the project restarted and make it more attractive for a partner, Guimaraes said. Under the current business model, the private partner would be expected to come in with 20% of the investment.

"It is much easier to attract partners with a project that is under way than with one that is paralyzed," he said. ($1 = 5.5851 reais)

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