|
EBRD President recommends loan approval for K2R4 be confirmed
EBRD President Jean Lemierre today recommended that the Board of Directors
confirm the approval it gave to a loan last December for the financing of two
nuclear power plants in Ukraine, as four conditions attached to the loan
approval have now been met.
On 7 December 2000 the Board approved the US$ 215 million loan to Energoatom,
the Ukrainian state-owned nuclear power generator, for the completion and
upgrading of Khmelnitsky 2 and Rivne 4 nuclear plants, known as K2R4.
The loan is part of a US$ 1.48 billion financing package. Other lenders
include the European Union nuclear agency, Euratom (US$ 585 million), several
export credit agencies and Russia. The loan is guaranteed by the Government of
Ukraine.
The EBRD Board required that the following four conditions be met to confirm
its approval:
Permanent closure of the Chernobyl nuclear power plant;
A number of important safety assurances, including a report from international
nuclear regulators that the Ukraine Regulator has the necessary independence
and resources to assure operations of Ukrainian nuclear facilities according
to Western safety standards; a commitment from the G-7 and European Commission
to provide technical assistance; and a commitment from the Ukrainian
Government to provide the necessary independence and resources to the
country's nuclear regulator;
Resumption by the International Monetary Fund of the Extended Fund Facility to
Ukraine;
Commitments by the other institutions expected to provide funds for the
project.
Should the Board of the EBRD accept the recommendation and decide to confirm
the loan approval, the EBRD would then be able to sign the loan agreement,
which could occur in December. The loan agreement contains a series of
conditions that will have to be met before money is disbursed. Mr Lemierre's
recommendation to the Board, as well as background on all conditions related
to the project, may be found on the K2R4 Web page.
In 1995 the G7 countries, the European Commission and the Government of
Ukraine signed a memorandum of understanding regarding the closure of the
Chernobyl nuclear power plant. The EBRD was asked to play an important role in
a possible financing of the completion of K2R4 to replace the Chernobyl
facility.
Conditions of the loan and the loan guarantee require enhancement of the
safety not only of K2R4, but of the other 13 nuclear facilities owned by
Energoatom and implementation of electricity-sector reform, particularly
privatisation of electricity distribution companies and increases in tariffs
and tariff collections.
The EBRD has for many years placed significant emphasis on nuclear safety in
the countries of central and eastern Europe and the Commonwealth of
Independent States. The Bank is the administrator of the Nuclear Safety
Account, the Chernobyl Shelter Fund and three international funds for
decommissioning first-generation nuclear plants in the EU accession countries
Lithuania, Bulgaria and the Slovak Republic.
The Account provides grant financing for a multilateral programme to improve
safety in nuclear power plants across the region, including two
decommissioning facilities to help shut down the Chernobyl facility last year.
The Fund is a multilateral funding mechanism to assist Ukraine in transforming
the deteriorating sarcophagus, built around the wrecked Chernobyl reactor,
into a safe and environmentally stable shelter. That project, expected to cost
US$ 760 million over eight to ten years, is known as the Shelter
Implementation Plan.
|
