President of the European Bank for Reconstruction and Development (EBRD), Jean Lemierre, signed last Wednesday a recommendation for the EBRD Board of Governors to appropriate $215 million for the completion of two nuclear reactors at the Rivne and Khmelnytsky Nuclear Power Plants (NPP), Interfax-Ukraine reported on November 16.
Under the presidential schedule, the project will be discussed at the official meeting of the EBRD Board of Governors on December 7. The bank governors also intend to hold a preliminary working meeting later in November. This project provides for the bank to issue a long-term (18.5 years) $215 million loan to Ukraine’s Enerhoatom Company, with the total project value being $1.48 billion.
The EBRD president’s recommendations have in fact become the first Western step toward fulfilling the 1995 Ottawa Memorandum. Under it, the G7 and the then European Community pledged to furnish Ukraine with a loan to complete the construction of two nuclear reactors in return to Kyiv’s consent to shut down the Chornobyl NPP. However, the five-year-old compromise began very soon to show cracks: some countries (European Union members in particular) began to oppose the accumulation of nuclear facilities in Europe, especially in Ukraine, whose nuclear engineering conditions seem to worry the EU. The blame for bungling the two-reactors-construction project was long placed on Ukraine which was allegedly dragging its heels on the date of CNPP closure, thus breaching the Memorandum. So there could be no questions to or claims against the EU. However, after President Leonid Kuchma announced in June that the CNPP would be closed by December 15, the record was also put straight with respect to the main lobbyists against the reactor completion project.
Yet, we cannot say so far that Jean Lemierre’s statement is of paramount importance or a turning point. A recommendation is not yet an official decision. However, the very fact that the Bank management has made public its position is important. The question will now be to turn around those EBRD members who oppose the completion of the Rivne and Khmelnytsky reactors, such as Germany and France.
Delegate of the European Commission in Ukraine, Andre Van Haeverbeke, also told journalists that “both the G7 and the European Commission are prepared to fulfill the assumed obligations.” Simultaneously he said, “Ukraine should develop a culture of safety.” “We know that Ukrainian reactors are safe enough, but public opinion in the European Union is against nuclear energy,” Mr. Van Haeverbeke noted. The delegate also assured that Brussels wants to help Ukraine implement the reactor construction project. However, “we are not the only participants,” Mr. Van Haeverbeke pointed out. The European Union’s share in this project is about 40% of the total amount of $1.4 billion, with the G7 and the EBRD accounting, accordingly, for the remaining 60%. $100 million should come from Russia as a commodity credit for fuel. Mr. Van Haeverbeke noted that the EBRD will immediately solve the credit problem in a way positive for Ukraine after a signal from the International Monetary Fund. In other words, after Ukraine solves all its IMF loan problems. The delegate also said Ukraine “should demonstrate the state of the efficiency of its reforms in the energy sector, especially as far as regional electric company privatization is concerned.” “If everything goes well and the CNPP is closed, we will find the funds,” Mr. Van Haeverbeke stressed.
