The European Bank for Reconstruction and Development (EBRD) board of directors announced yesterday the approval of an offer of a 42 million US dollar (USD) loan to “modernise and improve safety” of two nuclear reactors under construction in Ukraine: unit two at the Khmelnitsky nuclear plant (K2) and unit four at the Rovno nuclear plant (R4).
The construction of the two 1000-megawatt reactors – known as the K2-R4 project – is being carried out by Ukraine’s state-owned nuclear power-generating company, Energoatom. EBRD reported that as Ukraine completes construction of the units, the country has asked that the bank and the European Community to help finance post-start-up safety and modernisation measures. In addition to the EBRD’s USD 42 million, the community plans to lend a further USD 83 million.
Key conditions for the loan include:
· Achievement of previously agreed nuclear safety levels before start-up;
· Completion of the safety and modernisation programme, ensuring that the units reach an internationally accepted safety level;
· Steps to safeguard the independence of Ukraine’s State Nuclear Regulatory Administration;
· Steps to ensure the safety of all nuclear units in Ukraine, including raising sufficient funds (based on an agreed tariff-setting methodology) for:
- Safety upgrades of the 13 existing nuclear power units in Ukraine, using K2 and R4 as benchmarks;
- An internationally agreed nuclear liability and insurance regime;
- A decommissioning fund.
The EBRD and the European Community had earlier contemplated financing the completion and pre-start-up modernisation of the two units as part of international support for Ukraine’s decision to close Chernobyl nuclear power plant [see News No. 287, 7th October 2003]. The EBRD said, however, that this financing is no longer under consideration because the units are expected to be completed this year by Energoatom itself [see News No. 141, 30th June 2004].
The EBRD said yesterday’s announcement signifies the bank’s willingness to commit money to funding the safety project – and that a corresponding agreement is expected to be signed in the near future.
