Union seeks pledge on Chernobyl

Date: 08/10/1998

By Simon Taylor

THE EU will seek confirmation that the Chernobyl nuclear plant will be fully shut down by the year 2000 from Ukrainian President Leonid Kuchma at a summit in Vienna next week.

Kiev has warned that it will not close the plant unless it receives a loan to help pay for two new nuclear plants to replace the generating capacity which will be lost.

But fresh doubts about the financial health of the Ukrainian utilities company Energoatom have prompted speculation that the European Bank for Reconstruction and Development (EBRD) will not approve a 175-million-ecu loan for completion of the new plants.

European Commission officials fear that if that happens, Kiev might lower safety standards by completing the work with limited national funds and a grant from Russia.

Environmental groups have already warned of the risk of another disaster on the scale of Chernobyl because of poor safety measures and building standards at the new plants.

Ukraine originally agreed to close the remaining working sections of Chernobyl as part of an accord with the Group of Seven (G7) countries in 1995. In return, the international community agreed to provide loans to help fund the construction of two new plants, called Rivne IV and Khmelnitsky II and known as R4-K2, to replace the lost generating capacity.

The Ukrainian authorities have priced the entire project, including the costs of shutting down Chernobyl, at 1.2 billion ecu and were banking on receiving the 175-million-ecu loan from the EBRD to help make up the total.

If the bank decides not to approve the loan, it could also jeopardise a further 600 million ecu of funding from the European Atomic Energy Community (Euratom).

A EBRD spokeswoman said this week that the bank was still examining the project to assess whether it met a range of criteria, but would not reach a final decision on the loan until December this year or January 1999.

In the run-up to next Friday's (16 October) EU-Ukraine summit, environmental groups are calling on Kiev to find an alternative to nuclear power as a way of meeting the republic's energy needs. Greenpeace International's nuclear safety expert Thomas Münchmeyer claims that the new plants pose a "huge danger", arguing that the site at Rivne is built on a "geologically unsound chalk foundation. Even the smallest movements of earth could cause a catastrophe," he said.

Münchmeyer also argues that the R4-K2 project fails to meet the EBRD's own criteria as it is not the lowest-cost solution to Ukraine's energy needs.

"The bank's study into the cost of the plants used incredibly high gas prices," he claimed.