June 10, 2020 / 11:47 PM / a month ago

UPDATE 1-Brazil government approves plan to complete third nuclear plant

(Adds details, background on the project)

BRASILIA, June 10 (Reuters) - Brazil on Wednesday approved a plan to complete its long-delayed third nuclear reactor Angra 3, with or without a partner joining Eletronuclear, the Eletrobras subsidiary that runs two existing two nuclear plants.

State-owned Eletrobras needs a private partner to help it finish the 1,400 megawatt reactor started in 2010. Possible candidates include companies in China, Russia, France and South Korea.

The private partner must be a minority stakeholder, said the Investment Partnership Program (PPI) council that gave the approval.

So far, 9 billion reais ($1.8 billion) have been spent on the project that stalled in 2015 due to cost overruns and a corruption scandal involving contractors.

Eletronuclear President Leonam Guimaraes told Reuters last month that another 14.5 billion reais of investment is needed to finish the job.

The business model approved on Wednesday was devised by major lender, state development bank BNDES, and requires a private partner to share the financial burden.

PPI Special Secretary Martha Seillier said it could be hard to attract a partner unable to have a controlling stake.

Eletronuclear is seeking a partner not just in financing and building but also in operations.

Seillier said after Wednesday’s meeting, however, that investors were more interested in a building contract to complete the plant rather than a partnership.

The planned privatization of Centrais Eletricas Brasileiras SA, Brazil’s largest utility known as Eletrobras, excludes the sale of its nuclear subsidiary. It has been held up in Congress and further delayed by the coronavirus pandemic until mid-2021.

$1 = 4.9737 reais Reporting by Marcela Ayres and Anthony Boadle; Editing by Richard Chang

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