Battle over nuclear loans to Eastern Europe hots up

Date: 22/03/01

By Laurence Frost

A COALITION of nuclear energy companies is urging the European Commission to press ahead with a new round of controversial EU loans for the building of nuclear power plants in Eastern Europe.

Economic and Monetary Affairs Commissioner Pedro Solbes is calling for a €2-billion total lending extension for the EU's atomic energy agency Euratom, which is currently approaching its €4-billion limit.

The industry body European Atomic Forum (Foratom) has responded angrily to demands by environmentalists that the loans be scrapped.

In an open letter to Commissioners this week, Friends of the Earth condemned the loans as a "direct subsidy to the ailing nuclear industry in the EU" that would encourage "risky nuclear power plant projects in Eastern Europe".

"These loans will be of fundamental benefit to the countries concerned," said David Sycamore of Foratom, which represents nuclear industries in 15 countries inside and outside the EU. "They will directly support the energy sectors of the host countries and thereby their economies - so they're not a direct industry subsidy."

Foratom insists that lenders will ensure that the work meets international safety standards, highlighting the Ukraine's Khmelnitisky 2 and Rovno 4 (K2R4) projects that won €680 million in Euratom funding last December.

"In the case of K2R4, the funding will also be conditional on guarantees that the national regulatory authority is properly resourced and completely independent," Sycamore said.

But campaigners say the Ukrainian loan conditions were demanded by the European Bank for Reconstruction and Development (EBRD), and not by the Commission.

"This is not a typical Euratom loan agreement," said Patricia Lorenz of Friends of the Earth. "Where the EBRD has not been involved, for example in the Kozloduy project, there's not so much public scrutiny."

The €212.5-million loan for upgrades to the two Bulgarian reactors at Kozloduy, agreed in April last year, were the first deals agreed under the 1994 change to Euratom's remit, opening the fund to some non-EU countries.

Even where reactors in eastern countries are built to western standards, Lorenz says, there is often no provision made for dealing with the radioactive waste they generate.

Commission officials say around €250 million in funding for the completion of a badly needed Romanian reactor at Cernavoda now depends on an increase to the lending ceiling.

The EU executive is likely to present the lending extension as a financial technicality rather than a policy decision, in a bid to win the required unanimous support from ministers.

A coalition of nuclear energy companies is urging the European Commission to press ahead with a new round of controversial EU loans for the building of nuclear power plants in Eastern Europe.