EBRD Chernobyl proposals rejected

28 May 1999

Completion of two nuclear plants, Rovno unit 4 and Khmelnitsky unit 2 (K2/R4), and the closure of the remaining reactor still operating at Chernobyl may be delayed indefinitely. The Ukrainian government says K2 and R4, both over 80% completed, must be finished before Chernobyl can be closed.

Mykhaylo Umanets, the deputy director of Energoatom said that Ukraine has rejected a proposal by the European Bank for Reconstruction and Development (EBRD) to finance some 12% of the $1.5 billion required. EBRD officials say the project terms have not yet been finalised and discussions are continuing. However, the EBRD has also insisted on several other conditions which Ukraine finds unacceptable. These include removing Chernobyl from Energoatom, the setting up of a separate company to collect payments and oversee privatisation of regional power distribution companies according to a schedule coordinated with the bank.

Ukrainian officials have repeatedly said Ukraine would complete the two plants itself if necessary. Mykola Dudchenko, head of Energoatom, told a news conference that Energoatom would use its own profits. “Of course, this financing is not enough, but work does not stop,” he said.

Without the G7´s promised $800-900 million to support closure of Chernobyl, Dudchenko holds out little hope that Chernobyl can be closed by 2000. Prime Minister Valery Pustovoitenko, during a visit to the southern Kherson region, told reporters that “Chernobyl’s closure by 2000 is problematic”.

The EBRD has been fielding criticism for its decision to consider funding completion of K2/R4. First Vice President Charles Frank said completion of the plants was the most cost-effective answer to Ukraine’s energy needs, and they would meet Western safety standards.

“Ukraine does not need additional capacity but it has a very high cost structure for supplying power through fossil fuels. Those fossil fuels are very expensive and very polluting in many cases,” Frank said at the EBRD annual meeting.

  Recently, the EBRD agreed to extend by three years its Nuclear Safety Account (NSA), which seeks to improve safety and promote energy reform in Eastern Europe and the former Soviet Union. The NSA is financing construction of a store for spent nuclear fuel and another to deal with liquid waste at Chernobyl.

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