Czech state to provide loan for nuclear unit due to launch in 2037

The Czech state will provide a loan to CEZ to build a new unit at the Dukovany nuclear power station, government leaders have announced. The state should contribute around 70 percent of the expected cost of the major, long-discussed project.

Dukovany nuclear power station, photo: Jiří Sedláček, Wikimedia Commons, CC BY-SA 4.0

Andrej Babiš, photo: ČTK / Václav Pancer

The construction of a new nuclear unit in the Czech Republic has been discussed for a number of years, with question marks always hanging over how it would be funded.

Now semi-state power giant CEZ is going to build a new unit at Dukovany, one of only two nuclear power plants in the country, thanks to a loan from the state – an idea that the government had previously rejected.

Prime Minister Andrej Babiš spoke about the decision at a news briefing on Thursday.

“The proposal will be discussed by the government around the end of June. A week before that government session, I will invite the leaders of all of the parties in the Chamber of Deputies to see the contract. There will be a presentation. That’s because it’s not only a matter for our government but for all other governments, as it will implemented over decades.”

Daniel Beneš, photo: Jana Přinosilová, Czech Radio

CEZ CEO Daniel Beneš has reiterated a previous statement that a tender procedure for the contract to build the new unit should be concluded by the end of this year. A winner ought to be selected by the end of 2022.

Mr. Beneš said the cost of the project would be EUR 6 billion at present values. The state will provide a loan for 70 percent of that amount and CEZ will cover the rest.

Prime Minister Babiš said both sides would benefit.

“Our interest is to ensure the lowest prices for everybody – and that is connected to the financing. That means that we have more or less agreed that the state will provide CEZ with a loan on very good terms, both for the state and for CEZ.”

Dukovany nuclear power station, photo: Jan Polák, Wikimedia Commons, CC BY-SA 3.0

The approval of the European Commission is needed in order for CEZ to get a cheap loan from the state. This is because EU rules preclude the state from favouring certain companies.

Under a Czech Ministry of Industry and Trade proposal, if the purchase price of electricity generated by the planned new Dukovany unit is higher than the price on the market, consumers will pay the difference via network tariffs.

However, if the purchase price is lower than the market price, the impact on consumers will be the opposite. This idea has been criticised by environmental groups.

Six companies are interested in the contract to build the unit, including Russia’s Rosatom and Westinghouse from the United States.

Construction is scheduled to begin in 2029, with a full launch planned for eight years later.