Canada loans $3-billion to Romania to complete construction of two nuclear reactors

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The Canadian government will loan up to $3-billion to Romania’s nuclear power operator to build two nuclear reactors – funds that will be directed exclusively to Canadian providers of goods and services working on the project.

The loan to Societatea Naţională Nuclearelectrica (SNN) will finance completion of two Candu 6 reactors, construction of which originally began in the mid-1980s. At a news conference to announce the loan in Ottawa on Tuesday, federal Natural Resources and Energy Minister Jonathan Wilkinson and his Romanian counterpart, Sebastian Burduja, emphasized the reactors would enhance energy security for Romania at a time of Russian aggression.

“We look at our neighbours, they all depend on Russian nuclear technology, on Russian nuclear fuel,” Mr. Burduja said. “We look west to our Canadian friends.”

He added that he had already signed a memorandum of understanding with his Moldovan counterpart, expressing Moldova’s interest in purchasing power the reactors would generate.

Federal officials provided conflicting information Tuesday afternoon about where the $3-billion would come from. Mr. Wilkinson’s press secretary, Carolyn Svonkin, said the loan will be jointly provided by Export Development Canada (EDC) and through the Canada Account, but that the split between those two sources has not yet been determined. (The Canada Account is a facility controlled by the Minister of International Trade reserved for export deals EDC deems too risky to support itself, but is administered by EDC.)

EDC spokesperson Anil Handa, however, said EDC would not support the transaction using its own account. Other details, such as the loan’s term and interest rate, were not disclosed.

“While Russia uses its energy resources to blackmail countries across the world, Canadian technology is helping our allies to achieve energy independence, and do so without contributing to climate change,” Mr. Wilkinson said.

“These new Candu units will help Romania to reduce carbon emissions and enhance energy security. And not just for Romania, but also for Moldova, and potentially for Ukraine.”

The Canadian government has a long history of funding reactor construction in Romania through EDC, its export credit agency.

During the reign of Communist dictator Nicolae Ceaușescu, Romania began planning a five-reactor nuclear power plant on the Danube River known as Cernavoda. EDC provided up to US$1-billion during the 1980s to support construction of a Canadian-designed reactor at the plant known as the Candu 6, which was interrupted by Mr. Ceaușescu’s overthrow and execution in 1989. Unit 1 was completed in 1996.

In 2003, the government of prime minister Jean Chrétien guaranteed a $328-million loan to Romania through the Canada Account to finish building Unit 2, which entered service in 2007.

Cernavoda’s two operational Candu 6s have an installed capacity of 1,300 megawatts, and lately have supplied one-fifth of the country’s electricity, according to the World Nuclear Association. They remain Romania’s only operating nuclear power reactors, and the only Candus in Europe.

There have been previous attempts to restart construction of Cernavoda’s other three Candu 6s; over the past decade, SNN signed preliminary agreements with China General Nuclear, a large nuclear power operator and builder, to press forward with construction of Units 3 and 4. But the Romanian government cancelled that initiative in 2020, and announced plans to construct two more Candu units at Cernavoda by 2031 and refurbish the existing reactors.

The new Canadian loan will finance completion of Units 3 and 4. With four operational reactors, Cernavoda would meet 36 per cent of Romania’s electricity needs, according to estimates.

Ontario Energy Minister Todd Smith said the project would benefit his province’s nuclear industry.

“With every dollar that’s invested by Canada going back to Canadian companies, I’m really excited to see our supply chain get to work, hire new engineers, hire new technicians, steelworkers and other trades to help get this job done in Romania,” he said.

Introduced in the 1970s, the Candu 6 design was built at stations in Quebec and New Brunswick, and exported not only to Romania but also to Argentina, China and South Korea. But it’s considered to belong to an older generation of reactors. (Earlier this century, Candu developers worked on an updated version known as the Enhanced Candu 6, but none were ever built.) Asked why Romania would build more Candu 6s today, Mr. Burduja cited his country’s experience with its two earlier units.

“Unit 2 is the number one best-performing reactor in the world,” he said, praising its ability to run for extended periods of time, thus maximizing the amount of electricity it generates.

“Second, there’s a long tradition of collaboration” with Canada, he added.