Canada loans Romania $3 billion to bolster 'net-zero' nuclear program and wean off Russian gas

SNC-Lavalin received a pre-project mandate last year from Romania as part of a $65 million effort to extend the operating life of Candu Unit 1 to 2060.

Canada loans Romania $3 billion to bolster 'net-zero' nuclear program and wean off Russian gas
Facebook/ Justin Trudeau and Facebook/ Jonathan Wilkinson
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Romania is getting a $3 billion taxpayer loan from Canada to bolster its nuclear program amid ongoing energy security concerns worsened by the Russian-Ukraine conflict.

The loan, provided to Societatea Naţională Nuclearelectrica (SNN), will finance two Candu reactors under construction in Cernavoda since the mid-1980s.

"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," Natural Resources and Energy Minister Jonathan Wilkinson told reporters on September 19.

"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," he said.

Candu Energy Inc., a subsidiary of Montreal-based SNC-Lavalin Inc., signed a cooperation agreement with China Nuclear Power Engineering Company Ltd. to construct two nuclear reactors at the Cernavoda Nuclear Power Plant in Romania.

On March 7, SNC-Lavalin received a mandate from SNN to conduct "pre-project work" on refurbishing Unit 1 to support European energy security and Romania's 'net-zero' goals. 

The refurbishment is expected to reduce its carbon emissions by over 10 million tonnes a year, which the Candu reactors at Cernavoda have achieved, said SNC-Lavalin president and CEO Ian L. Edwards.

"As the steward and original equipment manufacturer of CANDU technology, we are thrilled to conduct this vital work for SNN and the Romanian people, just as we were entrusted to construct Cernavoda's reactors in 1996 and 2007 originally," said Joe St. Julian, president of nuclear for the company.

The Québec company received the pre-project mandate last year as part of a $65 million effort to extend the reactor's operating life to 2060. 

Romanian Energy Minister Sebastian Burduja welcomed the support, with the Balkan state transitioning off Russian energy to meet local demands.

According to the country's National Institute of Statistics, nearly half (45%) of Romania's primary energy consumption came from imports in 2021. Romania relies on Russian imports for 29% of its gas consumption and a quarter of its imported fuel.

"We look at our neighbours. They all depend on Russian nuclear technology and nuclear fuel," Burduja said at the press conference. 

"We look west to our Canadian friends."

Natural Resource Canada (NRC) said Export Development Canada (EDC) would jointly provide the loan through the Canada Account — a facility controlled by Canada's Export Ministry for international trade on behalf of the EDC.

However, EDC spokesperson Anil Handa said they would not fund the loan, conflicting with the sparse details provided by the government on Tuesday.

The Globe and Mail reported that NRC did not specify details on the loan's term or interest rate during the announcement.

The federal government has a long-standing history of funding the builds for Romanian reactors through Export Development Canada, including a $1 billion sum to Communist dictator Nicolae Ceaușescu for the Canadian-designed Candu 6 plant.

After Ceaușescu's overthrow and execution in 1989, the reactor project was paused, with Unit 1 completed in 1996.

In 2003, Prime Minister Jean Chrétien loaned $328 million to Romania through the Canada Account to finish building Unit 2. It entered service in 2007.

According to the World Nuclear Association, the reactors supply one-fifth of the country's electricity, with an operational capacity of 1,300 megawatts each. 

Cision reports that the facility provides uninterrupted power that is "emissions-free, low-cost, [and] energy-secure." 

In 2020, the Romanian government announced plans to build two more Candu units at Cernavoda by 2031 and refurbish the existing reactors.

The $3 billion loan will finance Units 3 and 4 and rely on Canada's supply chain to get the reactors fully operational. The four reactors would meet an estimated 36% of Romania's electricity needs at total capacity.

Units 3 and 4 are poised to phase out nearly 4 gigawatts hours of coal-fired power by 2032 — the same Candu reactor template that allowed Ontario to phase out coal from its power grid in 2014. 

Ontario Energy Minister Todd Smith welcomed the project, listing the benefits it would bring to the local nuclear industry.

"With every dollar that's invested by Canada going back to Canadian companies, I'm 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.

Burduja said his country pursued two more Candu reactors, citing "a long tradition of collaboration" with SNC-Lavalin and calling Unit 2 "the number one best-performing reactor in the world."

He praised their ability to run for extended periods and maximize electricity generation while committing to 'net-zero' targets.

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