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Project to upgrade K2R4 safety backed by EBRD Board
The EBRD Board of Directors has approved a $42 million loan to modernise and
improve safety for two nuclear reactors in Ukraine: unit 2 at Khmelnitsky (K2)
and unit 4 at Rivne (R4). The 1,000-megawatt reactors are being built by
Energoatom, Ukraine’s state-owned nuclear power-generating company.
As Ukraine completes construction of the units, it has requested that the EBRD
and the European Community help finance post start-up safety and modernisation
measures. In addition to the EBRD’s $42 million, the EC plans to lend a
further $83 million.
The focus of the project is nuclear safety. Key conditions for the loan
include:
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Achievement of previously agreed nuclear safety levels before start-up;
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Completion of the safety and modernisation programme, ensuring that the units
reach an internationally accepted safety level;
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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.
Steps to safeguard the independence of the State Nuclear Regulatory Committee
of Ukraine.
The EBRD and the EC had earlier contemplated financing the completion and pre
start-up modernisation of the two units as part of the G-7's support for the
decision of Ukraine to close Chernobyl. This financing is no longer under
consideration because the VVR1000 units are expected to be completed this year
by Energoatom itself.
Improvements to Ukraine’s electricity market have already been obtained
largely as a result of intensive policy dialogue on the K2R4 issue since 1995
between the Ukrainian authorities and the EBRD, EC and others. For example,
Energoatom is applying more transparent procedures for collecting bills and
now raises sufficient cash for full recovery of its operating costs. Moreover,
the portion of electricity bills collected in the form of cash rather than
barter has risen more than tenfold to nearly 100 per cent.
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