Nuclearelectrica Prepares 400 MW PPAs Until 2046 — NRG-IA

Nuclearelectrica is preparing one of the longest and most extensive commercial commitments in the history of the Romanian energy market: the sale of a constant 400 MW capacity, starting in 2027 and running until the end of 2046. The company's shareholders have approved the bidding strategy and the 20-year contract templates, and the executive management has been mandated to organize the procedure, select potential buyers, and negotiate with them. The contracts are not yet signed. Their final form and entry into force will require a new approval from the General Meeting of Shareholders. Beyond the commercial scale, the operation attempts to solve one of the fundamental challenges of major energy investments: how a company can convince banks to finance a project today whose revenues will span several decades. Nuclearelectrica's answer is predictability. A significant portion of future power generation is to be contracted in advance, allowing financiers to see not only the reactor and the works to be executed, but also the revenue stream from which the loans will be repaid. 400 MW delivered as baseload, split into five contracts The product prepared by Nuclearelectrica entails the continuous delivery of 400 MW, a volume equivalent to approximately 3.5 TWh of energy in a full year. The volume will be split into five lots: three of 100 MW and two of 50 MW. This division allows for the participation of multiple buyers and reduces the risk of the entire volume depending on a single company. Deliveries are scheduled between January 1, 2027, and December 31, 2046. The contracts will include the option to suspend delivery for 45 days per year for planned outages and an additional ten days for unplanned outages—necessary conditions for nuclear technology, which requires periodic maintenance and interventions. The cumulative minimum value of the contracts is estimated by SNN at approximately €5.6 billion, calculated without inflation, which will be added later. This sum does not represent cash received upfront, nor does it represent the value of the loan obtained by the company. It expresses the minimum value of the energy to be delivered and paid for over two decades. Future revenues to support an investment of over €3.5 billion Unit 1 at Cernavodă entered commercial operation in 1996 and is approaching the end of its first operating cycle. The refurbishment must replace the main components affected by wear, modernize systems, and allow the reactor to operate safely for another life cycle. The updated value of the project exceeds €3.55 billion. Together with approximately €240 million in shared costs, which will later be allocated to the refurbishment of Unit 2 as well, the total approved value reaches approximately €3.79 billion. The shutdown of Unit 1 is scheduled for October 2027, with its return to commercial operation estimated for May 2030. During this period, major works that cannot be performed while the reactor is online will be executed. The European Investment Bank has meanwhile approved an €800 million loan for the project. While European financing is important, it covers only a portion of the total requirement. The remainder must be assembled from own resources, commercial loans, guarantees, and mechanisms that provide lenders with sufficient security over future revenues. Long-term contracts thus become one of the central pieces of the financial architecture. A lender is more willing to extend credit to a company that can demonstrate that a portion of its future production already has buyers, pricing formulas, and contractual guarantees. The price will have a floor and a cap The contracts will not set a single fixed price for the entire 20-year period. Nuclearelectrica proposes a mechanism where the price can evolve in line with the market, but will not fall below a minimum threshold or rise above a maximum threshold. The minimum threshold, referred to as the FLOOR, will result from the electronic auction. It will be fixed in the first year and subsequently indexed to Eurozone inflation. For Nuclearelectrica, this level ensures protection against a price drop that would render revenues insufficient to support the investment. The maximum threshold, referred to as the CAP, limits the buyer's exposure in the event of a very high price spike. The company purchasing the energy agrees to guarantee a minimum price to the producer but receives, in return, protection against part of the risk of future price increases. The calculation formula will use benchmarks from the German market, the most liquid power market in Europe, along with price spreads between Germany and Romania. The contracts will be denominated in euros, which aligns both with the currency in which most of the project costs are calculated and with the requirements of international financiers. BRM will host the procedure, but the market will decide if the product is bankable Nuclearelectrica analyzed both the OPCOM platform designed for long-term…