NEWS RELEASES
GOVERNMENT OF CANADA FINANCIAL SUPPORT FINALIZED FOR ROMANIAN PROJECT
January 3, 2003 (12:50 p.m. EST) No. 1
GOVERNMENT OF CANADA FINANCIAL SUPPORT FINALIZED
FOR ROMANIAN PROJECT
International Trade Minister Pierre Pettigrew announced today that Export Development Canada (EDC) has signed an
agreement to provide a Canada Account guarantee on a portion of the financing for the sale of a second CANDU reactor by
Atomic Energy of Canada Ltd. (AECL) to Romania.
"EDC has a track record of excellence in supporting Canadian exporters," said Mr. Pettigrew. "CANDU exports provide
important economic benefits and employment to suppliers across Canada."
AECL will build a CANDU 6 power plant--a replica of the safely operating Unit 1 in Cernavoda, Romania--that is
expected to be completed in 2006. The project will create or sustain thousands of jobs for Canadians, mainly in the high-tech and industrial sectors, as well as provide business opportunities for several Canadian companies involved in the
project.
A rigorous environmental impact assessment process was followed on the project. In addition, an independent
environmental consultant was hired, who concluded that the project meets EDC's environmental review requirements and
applicable environmental regulations in Romania.
EDC provided loans to Romania for the first CANDU reactor in 1996. The first loan was fully repaid and the second is
scheduled to be repaid by 2006.
The Canada Account is used when a transaction falls outside the scope of EDC's Corporate Account but is nevertheless
determined by the Government of Canada to be in the national interest.
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Backgrounders are attached.
For further information, media representatives may contact:
Leanne Moussa
Office of the Minister for International Trade
(613) 992-7332
Media Relations Office
Department of Foreign Affairs and International Trade
(613) 995-1874
Ian Dovey
Atomic Energy of Canada Ltd.
1 866 886-2325
Rod Giles
Export Development Canada
(613) 598-2904
This document is also available on the Department of Foreign Affairs and International Trade's Internet site:
http://www.dfait-maeci.gc.ca
Backgrounder
FINANCING OF THE SECOND REACTOR AT CERNAVODA
Project Financing
Financing required to complete the second reactor at Cernavoda is being arranged by Société Générale, a commercial bank
based in France. The borrower is the Romanian utility, Societatea Nationala Nuclearelectrica. The main suppliers are AECL
and companies from Italy, France and the United States.
The loans will be guaranteed in full by the Romanian government. EDC, alongside export credit agencies from Italy, France
and the U.S., have also been asked to provide guarantees or insurance. EDC's guarantee under the Canada Account is for
the Canadian portion of the loan, of up to $328 million.
The Canada Account
EDC's mandate is to support and develop Canada's export trade and its capacity to engage in that trade, and to respond to
international business opportunities. EDC is financially self-sustaining, and is accountable to Parliament through the
Minister for International Trade.
The vast majority of transactions facilitated by EDC on behalf of Canadian companies are done under EDC's Corporate
Account. However, for transactions that fall outside the scope or risk tolerance of EDC's Corporate Account, transactions
can be considered under EDC's Canada Account. This is usually required due to certain risks, including the size of the
transaction, market risks, country capacity, borrower risks or the financing conditions.
EDC requires the authorization of the Minister for International Trade, with the concurrence of the Minister of Finance,
before entering into a Canada Account transaction.
Canada Account transactions are negotiated, executed and administered by EDC, but the risks ultimately rest with the
Government of Canada. In all cases, financing support is extended on terms that are consistent with Canada's obligations
under the OECD Arrangement on officially supported export credits.
Canada Account information can be found in EDC's annual report, on its Web site at http://www.edc.ca and in the Public
Accounts published by the Government of Canada.
Backgrounder
CERNAVODA PROJECT
Project History
Atomic Energy of Canada Ltd. (AECL) was originally contracted to build the Cernavoda Nuclear Power Plant in 1979. This
contract included five CANDU 6 reactors. Due to the political and financial challenges encountered in Romania during the
country's transition from communism to a democratic free market, AECL and its Italian partner, Ansaldo, have completed
only one of the five units, which was declared in service in December 1996.
Cernavoda Unit 1 Statistics
• CANDU 6 reactor, 702 megawatts of electrical output (MWe)
• in-service December 1996
• provides approximately 10 percent of Romania's electrical requirements
• saves approximately $150 million per year in imported fuel costs
• reduces greenhouse gases by five megatonnes per year
Cernavoda Unit 2 Status
The completion contract for Unit 1 included provisions for preserving work begun on Unit 2, which had reached
approximately 40 percent completion under the original contract. AECL signed the commercial contract to complete Unit 2
in May 2001. Although the contract was signed, project financing was still being negotiated. The total value of the contract
is approximately $1 billion. The Canadian scope is approximately $300 million. The project schedule envisions completion
and in-service for Unit 2 in 2006-2007. Unit 2 will be another CANDU 6 reactor (approximately 700 MWe).
Additional Units
The Romanian government has expressed an interest in completing additional units in the future. Its decisions will depend
on a number of factors, such as energy demands, domestic supply policies, environmental considerations and financing
arrangements.
Backgrounder
ENVIRONMENTAL ASSESSMENT
Under the terms of the Export Development Act, before entering into a project-related transaction, EDC must determine
whether the project is likely to have adverse environmental effects and if so, whether EDC is justified in entering into the
transaction. EDC's Environmental Review Directive establishes a methodology for reviewing projects, which includes
categorization, standards and monitoring.
An Environmental Impact Assessment was conducted for the Romanian Power Utility, Societatea Nationala
Nuclearelectrica (SNN), which included public consultations in Romania. A summary of the environmental impact
assessment (EIA) was posted on SNN's Web site for a 45-day public comment period in December 2001 and January 2002.
In addition, an environmental consultant was hired to provide an independent technical review of this environmental
assessment. The consultant concluded that the transaction met the requirements of EDC's Environmental Review directive
and host country environmental regulations and was consistent with EIA practice in Canada.
During the negotiations, EDC worked closely with engineers, scientists and environmental experts at the various export
credit agencies involved in the transaction to ensure a comprehensive package of environmental covenants committing the
project sponsor to specific mitigation plans, environmental reporting and ongoing monitoring, including regular
International Atomic Energy Agency inspections.
EDC is satisfied that the environmental impact of the project has been adequately assessed and the project has met EDC's
Environmental Review Directive, including the project's compliance with host country environmental regulations and a
benchmarking of the project design against internationally recognized good practices, guidelines and standards, including
those of the International Atomic Energy Agency and the International Commission on Radiological Protection.
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