EBRD demands utility privatisation

30 September 1999

According to Ukrainian sources, the European Bank for Reconstruction and Development (EBRD) has demanded that Ukraine privatise its regional electric power utilities as a condition for receiving a loan to finance the completion of the reactors Khmelnitsky 2 and Rovno 4 (K2R4). Ukraine needs to bring these reactors online to be able to permanently close the reactors still operating at Chernobyl.

The EBRD refused to comment on the story, first published in London’s Financial Times. However it is widely recognised that the dominance of barter as a means of paying for electricity in the Ukraine is making the viability of the loan dubious. The EBRD is keen to increase the level of cash within the Ukranian electricity market. Currently less than 10% of electricity is paid for this way. Privatisation would be a means of trying to increase the cash economy.

In Ukraine shortages of fuel at nuclear power stations are delaying repairs, according to Energoatom president Mykola Dudchenko.

Repair work is currently being carried out at units 4 and 5 at Zaporozhe and at one unit each at South Ukraine, Rovno and Chernobyl. Chernobyl 3 is due to be brought back online on 9 November, after being closed for repair on 1 July. Dudchenko warned that delays in the supply of fuel would further delay repair work. Six units currently have nuclear fuel and one more nuclear fuel load has been paid for. Zaporozhe’s unit 2 was reconnected to the grid on 27 August after the longest outage in its history. The unit was closed for repair for 120 days due to a shortage of fuel. Unable to pay Russia for new supplies the Ukrainian Energy Ministry had to transfer fuel assemblies from other plants to allow it to restart.

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