The Canadian government has agreed to provide C$3bn in export finance to a Romanian nuclear energy company, in a deal backing the construction of two new reactors in the Eastern European country.

Under the agreement, Nuclearelectrica will work with Canadian companies to develop Canada Deuterium Uranium (CANDU) reactors, units 3 and 4, at the already operational Cernavoda nuclear power plant.

The export financing will be provided via the government’s Canada Account, rather than the national export credit agency, Export Development Canada (EDC), a spokesperson for Global Affairs Canada confirms to GTR.

The Canada Account process is used when EDC is unable to take on the financing risk, though the agency typically helps negotiate, execute and administer these deals on the same basis as corporate account activities.

The Canadian government says the deal will drive down emissions and help Romania phase out coal power by 2032. According to Nuclearelectrica, the project is slated to be completed by 2031, and following its completion, nuclear energy will account for more than a third of domestic energy production.

The Export-Import Bank of the United States (US Exim) is also backing the proposed expansion of the plant and will provide a direct loan of US$57mn to EnergoNuclear, a subsidiary wholly owned by state-backed Nuclearelectrica, to support pre-construction engineering and feasibility studies for the project.

“Russia’s brutal and unjustified invasion of Ukraine has underscored the need for Romania and other European countries to reduce continental reliance on Russian energy while maximising their energy security. In this regard, Canada is stepping up to support Europe’s energy future in the face of supply shortages, while advancing shared priorities,” says Natural Resources Canada.

A representative from the government department tells GTR the agreement is aimed at the broader Canadian supply chain – rather than a specific exporting company – and will enable multiple firms to win contracts through an open procurement process.

The deal will “create hundreds, if not thousands, of jobs for engineers and scientists, as well as in the manufacturing sector”, they add.