LONDON, UK – Bulgaria has abandoned plans to build a new nuclear power plant with Russian firm Atomstroyexport on the Danube river.
Deputy finance minister Vladislav Goranov said Wednesday that a natural gas power plant would be built instead at the site in the town of Belene near the Romanian border.
A Russian-built reactor built by Atomstroyexport, and originally meant for the new nuclear plant, is to be installed at the country’s existing station at Kozloduy, according to the Associated Press.
The $10.6 billion project – which was first proposed when Bulgaria was under communist rule – has failed to attract serious foreign investment since German company RWE pull out in 2009 due to funding concerns.
Bulgaria and Russia have been stuck in a long-running dispute over the project’s rising costs. Bulgarian Economy and Energy Minister Delyan Dobrev is to travel to Moscow on Thursday to try to persuade Atomstroyexport not to take legal action, the BBC reports.
More from GlobalPost: Chinese cars, made in Bulgaria
The decision to pull the project follows pledges by Prime Minister Boiko Borisov’s center-right government to lessen Bulgaria’s almost complete energy dependence on Russia, Reuters reports.
The poorest country in the European Union (EU), Bulgaria gets more than 95 percent of its natural gas from Russia’s Gazprom, while its sole operational oil refinery, which provides over 70 percent of the country’s petrol, is fully owned by Russia’s LUKOIL.
The United States and the EU have long expressed concerns that installing a second Russian-made nuclear plant would increase Moscow’s leverage over Bulgaria.
In 2009 the Bulgarian government said it would review all major Russian-led energy projects and abandon them if they were not found to be economically viable or conducive to the national interest.
In December it thwarted plans by Moscow to expand Russian energy sales in Europe, cancelling a $1.34 billion pipeline deal to transport Russian oil to Greece.
More from GlobalPost: Biding time in Bulgaria