Russia to help complete K2R4

30 October 2001

Ukraine’s Khmelnitsky 2 and Rovno 4 units may be completed using Ukrainian and Russian funds. Following a meeting with his Ukrainian counterpart Anatoly Kinakh, Russian Prime Minister Mikhail Kasyanov said that the Ukrainian government has decided to complete the two units exclusively using Russian and Ukrainian organisations. Russia would supply equipment, materials and a loan, under a deal the details of which are still being negotiated. The work would be completed within two to three years at a total estimated cost of just $600 million.

The announcement came just weeks after Ukrainian officials said they believed approval for a loan from the European Bank for Reconstruction and Development (EBRD) was imminent. This came after the International Monetary Fund (IMF) completed a financing arrangement under the Extended Fund Facility (EFF) for Ukraine.

EFF renewal was one of four conditions set for Ukraine to be granted the $215 million EBRD loan. The others were: confirmation that the Chernobyl plant has been closed permanently; commitments by the G7 and the European Commission to provide technical assistance, and by the Ukrainian government to provide the necessary independence and resources to the regulators; and financial commitments by other institutions including loans from Euratom, export credit agencies, Russia, Ukraine and its national nuclear energy generating company, Energoatom.

The EBRD said last year that completion would cost $1.48 billion, of which Russia would lend $123.7 million and Ukraine would provide $50 million.

Kinakh said Ukraine had met all conditions set by the EBRD but expressed doubt that the bank and other international organisations would fulfil their commitments. He added that it was of utmost importance to replace the lost output from Chernobyl in the shortest time possible.

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