SOFIA, Bulgaria-The European Commission is backing the construction of a second nuclear plant in Bulgaria, the National Electricity Company said Friday.

The backing, which means Bulgaria is eligible for millions of euros in EU loans, follows extensive discussions between the nuclear operator and the commission, which vetted the plan and investment as in line with the Euratom Treaty from the EU's nuclear agency.

Last year, Russia's Atomstroyexport won a €4 billion deal to build two 1,000 megawatt reactors at the Danube port of Belene, the Balkan country's second nuclear power plant.

Belene is considered an important litmus test as other central European countries consider plans for new nuclear power plants or rebuild old ones from communist times.

"The conclusion of the European Commission is that Bulgaria can continue to implement the agreements," Bulgaria's NEK electricity company said in a statement.

The commission, the EU's executive office, said it took special note that NEK, the plant operator, has made financial provisions should the plant be taken out of commission, and holds separate funds for nuclear waste management.

Atomstroyexport will act as the main contractor, and French nuclear company Areva and Germany's Siemens as main subcontractors, the commission said.

Compared to previous VVER 1000 Russian reactor types in operation, the two AES92 reactors in Belene should comprise advanced safety systems and are considered to be in compliance with EU norms.

Construction is scheduled to start in 2008. Commissioning of the reactors is foreseen for 2012-13.

The state-owned NEK is looking for investors to take up to a 49 percent stake in the Belene Power Company, which will be set up to own and operate the nuclear power plant. NEK will hold a stake of at least 51 percent.

The shortlisted companies are Belgium's Electrabel SA, Italy's Enel SpA, E.ON AG and RWE AG from Germany and CEZ a.s. from the Czech Republic.

Bulgaria's government invested more than US$1 billion (€700 million) in the project at Belene, 250 kilometers (155 miles) northeast of Sofia, but froze it in 1990 after environmentalists said it could pose a safety risk.

The project was revived to compensate for the closure of two aging units at the country's only nuclear plant in Kozlodui, which Bulgaria agreed to shut ahead of its entry into the European Union in January.

In the last years, Bulgaria was the biggest electricity exporter in the Balkans, providing its neighbors and other Balkan countries with more than 7 million megawatt-hours of electricity per year.