Ukraine says it is ready to give a firm closure date for the Chornobyl nuclear plant that exploded in 1986 and spewed radiation in the world's worst civilian nuclear disaster. But will Ukraine meet its energy needs by building another Soviet-designed nuclear plant? RFE/RL correspondent Tuck Wesolowsky reports on the controversy over Western funding of Ukrainian nuclear projects.
Prague, 2 June 2000 (RFE/RL) -- Yesterday, (1 June) Ukrainian Prime Minister Viktor Yushchenko said Ukraine would announce the date of the closure of Chornobyl "within a few days."
Ukrainian observers believe the announcement may be planned for Monday (5 June), when U.S. President Bill Clinton arrives in Kyiv following a summit meeting in Moscow.
In the past, Ukrainian officials have said the last two reactors at Chornobyl cannot be closed until two more nuclear reactors are completed at the Khmelnitsky and Rivne nuclear power stations in western Ukraine. The two new reactors, referred to commonly as K-Two/R-Four, is intended to make up for the energy Ukraine would lose by closing Chornobyl.
The projected costs for completing the two new reactors has been put at about $1,4 billion. That's a lot of money for cash-strapped Ukraine, whose economy has shrunk in half since the collapse of the Soviet Union in 1991. Loans and credits from international financial institutions are expected to cover most of the costs.
The European Bank for Reconstruction and Development, or EBRD, is mulling lending some $170 million for the project. The EBRD loan is considered key because its granting could unlock further financing, including a much bigger EU loan.
But the loan proposal has turned into one of the London-based development bank's most controversial projects. A decision was due last year, but effective protests from environmentalists and others foiled those plans, leaving the loan in limbo.
Tobias Munchmeyer is a anti-nuclear activist with the environmental group Greenpeace. He says putting two more reactors on line in Ukraine ups the ante for another potential nuclear nightmare.
"Two more stations means two more potential Chornobyls in Ukraine. The design considered for K-Two/R-Four is the VVER-1000. This design has fundamental flaws."
The VVER reactor is a Soviet design, albeit one of the later Soviet models. It has been criticized as having inadequate safeguards against fire. Similar reactors are found in Russia and Bulgaria, as well as elsewhere in Ukraine.
Critics also say building nuclear reactors would be more expensive than upgrading conventional power plants. When the EBRD top brass held its annual board meeting late last month in the Latvian capital Riga, dozens of activists handed the bank's then acting president Charles Frank a huge cardboard calculator. It symbolized what they contend is the bank's faulty math.
A report by Stone and Webster commissioned by the bank last year said the cost of building K-Two/R-Four had dropped as a result of the devaluation of Ukraine's currency, the hryvna. But the same report said the hryvna's movement would not lower the cost of upgrading conventional power stations.
German consultant firm Fichtner, hired by Greenpeace to assess the bank's report, concluded that both projects would require considerable use of imported materials, and therefore both would be affected by currency swings
The EBRD said the nuclear reactors are more than 80 percent completed and the construction costs -- at around half the $1,4 billion total -- compare favorably with the cost of rehabilitating conventional plants.
At the EBRD's board meeting in Riga, the bank's then acting President William Frank told RFE/RL that Chornobyl will probably close whether or not K-Two/R-Four is built. Frank said the new reactors will receive a loan only if it makes financial sense.
"I think Chornobyl will shut down this year regardless. The understanding is, however, that -- certainly from the Ukrainian side -- is that the quid pro quo for shutting it down is the financing of Khmelnitsky Two and Rivne Four. Our view is that we will finance K-Two/R-Four if indeed it is low cost and competes effectively with any other alternative, and that it is based on sound banking principles."
But politics as much as economics plays a role in granting the loan, and the last year of impasse has been marked by political shifts among the 60 EBRD shareholder countries.
"The situation has changed in the last twelve months, most of all because of the change of the position of the German government, which has made clear that it would not give export agency credits, so-called Hermes guarantees for K-Two/R-Four."
Munchmeyer also says Sweden and Austria -- which is one of Europe's more vocal nuclear critics -- have recently proposed giving or lending Ukraine money to develop non-nuclear alternatives to replace Chornobyl.
Non-nuclear options, however, face fierce opposition from the powerful nuclear industry lobby, which finds selling nuclear power in the West harder and harder. For companies like France's Framatome, Germany's Siemens, and the U.S. Raytheon Corporation, K-Two/R-Four means huge contracts.
The fate of Western financing for K-Two/R-Four could become a little clearer at a meeting in Berlin next month (5 July and 6 July), when donors from 40 nations are expected to announce they have secured the $770 million needed to rebuild the sarcophagus around Chornobyl's damaged reactor. Then again, the K-Two/R-Four saga may just drag on.