COMMISSION OF THE EUROPEAN COMMUNITIES 
<mmt C0M(92) 467 final 
Brussels, 9 December 1992 
Proposal for a 
ÇpUNCIL DECISION 
amending Decision 77/270/Euratorn, to authorize 
the Commission to contract Euratom borrowings 
in order to contribute to the financing required for Improving 
the degree of efficiency and 
safety of nuclear power stations In certain non-Wember countries 
(presented by the Commission) 
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EXPLANATORY MEMORANDUM 
The Community and the Member States have decided to make a concerted 
effort at G-24 level to support the process of economic and social 
reform undertaken by the countries of Central and Eastern Europe and by 
the CIS countries. 
Both the PHARE (Council Regulations 3906/89 and 2698/90, in favour of 
the countries of Central and Eastern Europe) and TAC IS (technical 
assistance to the CIS, European Council Decision of 14 and 15 December 
1990, Council Regulation 2157/91) programmes rate energy as one of the 
key sectors in the restructuring and regenerating process to improve 
the organization and operation of the economy whilst respecting the 
principles of a market economy. The stated positions of the Council 
have acknowledged that nuclear safety should be one of the priority 
areas for technical assistance. 
In those countries of Central and Eastern Europe and of the CIS which 
use nuclear energy, it is Soviet-designed nuclear power stations that 
are in service and/or under construction. In those countries, nuclear 
energy meets the following proportions of electricity requirements: in 
the former USSR, 12%; in Hungary, 50%; in Bulgaria nearly 40%; and in 
Czechoslovakia, 28%. 
The European Council held in Lisbon on 26 and 27 June 1992 invited the 
Council to consider granting Euratom loans to contribute to improving 
the degree of efficiency and safety of the nuclear power stations in 
the countries of Central and Eastern Europe and of the CIS. 
The nuclear power stations in service and/or under construction fall 
into two quite separate families: 
RBMKs (graphite-moderated pressure-tube type boiling-water reactor) and 
WERs (pressurized-water reactors). 
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RBMKs are located in CIS republics (15 stations, each of 1 000 MW) and 
in Lithuania (2 stations, each of 1 500 MW). These reactors are of the 
"Chernobyl" type. An extensive debate at international level is 
currently under way to examine whether investments could be made to 
make them safer and therefore keep them in service, for the time being 
at least, or whether they should be closed down and decommissioned. 
There are three generations of WERs: 
* 440/230-type WERs of 440 MW: ten units are still in service, four 
in the CIS (Kola and Novovorone), four in Bulgaria (Kozloduy) and 
two In Czechoslovakia (Bohunice). Moreover, in Armenia there are 
two units which have been shut down for four years and which the 
government wants to bring back into service. 
This generation of reactor is much criticized, but its 
decommissioning would present such serious problems for the energy 
sector and the economy as a whole in the countries concerned (as is 
also the case for the RMBKs) that, subject to carrying out the 
changes agreed at international level, their continued operation is 
indispensable. 
They will probably remain in service for a few more years, 
supported by additional investment tranches of several tens of 
mill ions of ecus. 
* 440/213-type WERs of 440 MW: fourteen units are in service (four 
in the CIS, four in Hungary and six Czechoslovakia) and 4 are under 
construction (Czechoslovakia). 
* 1000-type WERs of 1 000 MW: eighteen units are in service 
(sixteen in the CIS, and two in Bulgaria). There are twenty-five 
units under construction (twenty-one in the CIS, two in Bulgaria 
and two in Czechoslovakia). This generation of reactor is more 
advanced than the others in that it uses a leakproof pressure 
containment shell to surround the nuclear island; in other 
respects, however, it is still inadequate. 
The general level of efficiency and safety in all these power stations 
is inadequate. They must be brought up to standard (in full or in 
part, according to circumstances) in order to avoid an accident, which 
would have serious consequences for the entire continent. If the 
countries of Central and Eastern Europe and of the CIS are to carry out 
the reforms entailed by the process of economic restructuring, then 
they must at the moment retain the electricity production of their 
existing nuclear power stations, as other sources of energy fall well 
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short of meeting their energy requirements. These countries are 
therefore generally committed to the continued operation of these power 
stations. 
The power stations in question are currently being studied under 
programmes which are being run by the International Atomic Energy 
Agency (IAEA), Vienna and the World Association of Nuclear Operators 
(WANO); the Community is also conducting studies under the PHARE and 
TAC IS programmes. 
The international community is asked to direct all its expertise at an 
exhaustive analysis to identify the design and operational weaknesses 
of these reactors. In addition to the emergency projects which have 
already been undertaken, such as staff training, housekeeping and 
assistance to the safety authorities, the programmes currently under 
way will result in proposals for modifying and/or replacing equipment 
essential for improving the efficiency and safety of these power 
stations, thus enabling their continued operation at an acceptable 
level of safety. 
Following the launch of the PHARE and TACIS programmes of assistance, 
the Community allocated ECU 72.7 million to assistance for the nuclear 
energy sector in 1990 and 1991. This amount breaks down by country as 
fol lows: 
Bulgaria ECU 12.7 million; Czechoslovakia, ECU 7 million; Lithuania, 
ECU 0.5 million; Poland, 0.3 million; and the CIS, ECU 53 million. 
The amounts relate only to the study phase, i.e. software, improving 
operational safety and support for the safety authorities. 
The G-7 meeting in Munich, on 6-8 July 1992, reiterated the importance 
of Improving nuclear safety in the countries of central and eastern 
Europe and of the CIS. 
As part of the TACIS assistance programme, the Commission will propose, 
by the end of 1992, an ECU 100 000 000 programme and a programme for at 
least the equivalent sum in 1993. The 1992 regional programme should 
cover the drawing-up of a five-year steering plan to determine 
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modifications to and close-downs of nuclear power stations, and 
coordinate the work of the G-24 and the multilateral organizations, 
permanent assistance on-site to improve the running and maintenance of 
the units, financing projects of the International Science and 
Technology Centre in Moscow, and pursuing activities of a generally 
similar nature already in hand. 
As regards PHARE, the actions started in 1991 will continue, in 
conjunction with TACIS, under an ECU 20 000 000 regional programme. 
Bringing the power stations of these countries up to standard will 
ultimately depend on carrying out the changes recommended by the 
projects and studies currently under way. Work to modify or replace 
existing equipment or introduce very costly new sophisticated equipment 
must therefore be carried out as it is essential if these power 
stations are to continue to operate. The investment required would be 
at least ECU 10 000 million, staggered over a period of approximately 8 
years. 
Moreover, if conversion work on any of the nuclear plant is not 
considered feasible in technical or economic terms, that plant will be 
closed down and decommissioned. 
The scale of the problems involved in the process of economic and 
social reform is such that the countries of Central and Eastern Europe 
and of the CIS are unable to find the necessary financial resources to 
begin the industrial phase of improving the efficiency and safety of 
their nuclear power stations. 
It is therefore necessary to call on finance from other sources. 
The Commission should consider financing via Euratom loans. 
Decision 90/212/Euratom fixed the ceiling for Euratom borrowings at 
ECU 4 000 million. At 31.12.991, ECU 2 876 million of this limit had 
been taken up. 
In view of the slowdown in the nuclear energy sector, it is unlikely 
that there will be strong demand for the remaining finance from nuclear 
energy projects in the Community in the immediate future. 
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The community could therefore use a large part of the Euratom borrowing 
facilities currently available to help to improve the efficiency and 
safety of nuclear power stations In the countries of Central and 
Eastern Europe and of the CIS. 
It Is planned to create a guarantee fund to cover the financial 
commitments of the budget to non-member countries. This fund would be 
financed by the payment of 14 % of the capital amount of each new 
transaction. Loans granted to non-member countries under the Euratom 
Decision will be subject to this mechanism as soon as it comes into 
force. 
Since the EIB is already responsible for managing Euratom loans within 
the Community, the Commission and the EIB will Jointly examine ways in 
which this remit could be extended to the countries of Central and 
Eastern Europe and the CIS. 
The application of this Decision to financing improvements in the 
degree of efficiency and safety of nuclear power stations In the 
countries of Central and Eastern Europe and in the CIS will comply with 
the attached guidelines* 
Euratom funding for Member States win continue to be governed by the 
guidelines set out in the Council minutes with regard to the basic 
Decision 77/270/Euratom. 
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Proposal for a 
COUNCIL DECISION 
amending Decision 77/270/Euratom, to authorize 
the Commission to contract Euratom borrowings 
in order to contribute to the financing required for improving 
the degree of efficiency and 
safety of nuclear power stations in certain non Member countries 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
HAVING REGARD to the Treaty establishing the European Atomic Energy 
Community, and in particular Articles 1, 2, 172 and 203 thereof, 
HAVING REGARD to the proposal from the Commission, 
HAVING REGARD to the Opinion of the European Parliament, 
WHEREAS the European Atomic Energy Community was created to establish the 
conditions of safety necessary to eliminate hazards to the life and health 
of the public; and whereas the Member States have expressed the desire to 
associate other countries with their work and to cooperate with the 
international organizations concerned with the peaceful development of 
atomic energy, 
WHEREAS the Community and the Member States have decided to make a 
concerted effort at G-24 level to support the process of economic and 
social reform undertaken by the countries of Central and Eastern Europe and 
of the CIS, and have decided on measures to give economic aid to these 
countries; 
WHEREAS these countries have nuclear installations whose level of safety is 
inadequate and whose malfunctioning could have repercussions on the entire 
continent; and whereas these countries are committed to the continued use 
of nuclear energy; 
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WHEREAS the Community 16 duty bound to commit the requisite resources to 
enable It to meet the expectations of the public in the Member States in 
terms of the safety and quality of the environment; and whereas, in 
particular, action must be taken in the countries of Central and Eastern 
Europe and of the CIS to modify certain existing nuclear installations or, 
If need be, to dismantle others which it would not be feasible in 
technical or economic terms to bring up to standard, 
WHEREAS projects undertaken by the Community under the PHARE and TACIS 
programmes to improve the level of safety of the nuclear Installations 
comprise inter alia studies to identify areas of weakness and to put 
forward appropriate corrective measures; and whereas the technical 
assistance will result In proposals to modify some of the nuclear 
installations in service or under construction and to shut down end 
decommission others; and whereas it is in ths Community's Interest that 
this work be carried out; 
WHEREAS the Community must encourage these projects to be carried out 
whilst promoting cooperation with Industry in the Member States; 
WHEREAS the investment required to bring up to standard the nuclear 
installations in ths countries of Centrai and Eastern Europe and of the CIS 
is on such a scale that these countries are unable to undertake it although 
the problems require urgent solutions; 
WHEREAS there Is good reason for calling on all available financial 
resources; whereas to this end there is good reason for amending Decision 
77/270/Euratom, authorizing the Commission to contract Euratom borrowings 
to finance investment in the nuclear energy sector, In order to extend the 
scope of the Decision to cover countries Involved in the PHARE programme 
and those of the Commonwealth of Independent States so that the efficiency 
and safety of their nuclear power stations can be Improved; 
WHEREAS Decision 90/212/Euratorn fixed the ceiling for Euratom borrowings at 
ECU 4 000 million» and at 31.12.1991 ECU 2 876 million of this limit had 
been taken up. and whereas following the slowdown In the nuclear energy 
sector and the changes In nuclear energy policy by some Member States, 
there wl 11 not be a strong demand for the remaining finance from nuclear 
energy projects in the Community over the next few years; 
WHEREAS the recipient countries will act as guarantors to the loans granted 
by virtue of this Decision, and/or other first-class securities win be 
obtained, 
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HAS DECIDED AS FOLLOWS 
Soie Article 
The first Article of Decision 77/270/Euratom is replaced by the following: 
"First Article 
The Commission is authorized to contract, in the name of the European 
Atomic Energy Community (Euratom), and within the limits fixed by the 
Council, borrowings whose proceeds will be allocated in the form of loans 
to finance, within the Community, investment projects relating to the 
industrial production of electricity in nuclear power stations and to 
industrial installations in the nuclear fuel cycle. 
The Commission is also authorized to contract, within the same limits , 
borrowings whose proceeds will be allocated in the form of loans to finance 
conversion work on the nuclear power stations of non-Member countries 
involved in the PHARE programme and those of the Commonwealth of 
Independent States (CIS), in order to improve the efficiency and safety of 
these installations. For these projects to be eligible they must: 
relate to nuclear power stations or installations in the nuclear fuel 
cycle which are in service or under construction, or to the 
decommissioning of nuclear installations where modification is not 
feasible in technical or economic terms; 
have received all the necessary authorization at national level and in 
particular the agreement of the safety authorities-, 
have received a favourable opinion from the Commission in technical and 
economic terms-, 
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involve close industrial or commercial cooperation with at least one 
Community enterprise. 
The Commission may borrow only within the limits of loans requested of it. 
The borrowing and corresponding lending operations are to be denominated in 
the same monetary unit and are to be carried out under the same conditions 
as repayment of the principal and interest payments. Costs incurred by the 
Community in concluding and executing each operation are to be borne by the 
recipient undertakings." 
Done at Brussels, (date) 
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FINANCIAL IMPLICATIONS 
The draft Decision concerns extending the scope of an existing Decision 
(77/270/Euratom): the granting of Euratom loans is extended to investments 
to improve the degree of efficiency and safety of nuclear power stations in 
certain non-Member countries, under the ultimate guarantee of the General 
Budget of the European Communities. 
The draft Decision is considered to have no direct affect on the General 
Budget, except in the event of default by the recipients or their 
governments, who will be asked to act as guarantors. 
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ANNEX TO DRAFT DECISION 92/DEF/EURATOM 
GUIDELINES RELATING TO THE FINANCING REQUIRED FOR 
IMPROVING THE DEGREE OF EFFICIENCY AND SAFETY OF 
NUCLEAR POWER STATIONS IN CERTAIN NON-MEMBER COUNTRIES 
(Text to be inserted in the Council minutes) 
The guidelines contained in the Council minutes relating to Decision 77/270 
shall apply to Euratom loans to Member States. As regards operations to 
contribute to the financing required for improving the degree of efficiency 
and safety of nuclear power stations in the countries of central and 
eastern Europe and of the CIS, the Council invites the Commission to follow 
the guidelines below. 
I BORROWINGS 
a) The costs involved in contracting the borrowings must correspond to 
those paid by category-one issuers, and the Commission shall take all 
the necessary steps to ensure that the Euratom borrowings benefit from 
the same favourable conditions as those enjoyed by other Community 
borrowings. 
b) Given the type of investment to be financed, the borrowings must be 
contracted over as long a time scale as possible; short- or medium-term 
loans may also be concluded should such a requirement be expressed by 
the enterprises concerned. 
c) As far as possible, the repayment schedule of the borrowings shall be 
accompanied by a period of grace. 
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I I LOANS 
1. Technical and economic acceptability of applications 
1.1 Types of projects Involved 
The projects must give priority to improving the degree of 
efficiency and safety of nuclear power stations and installations 
in the nuclear fuel cycle which are in service or under 
construction (cf. points 1.2 and 1.3). 
Projects may also relate to the decommissioning of installations 
for which modification to bring them up to standard is not feasible 
in technical or economic terms and which would pose a safety hazard 
if simply abandoned. The financing granted may relate to investment 
during the period between shut-down and the start of 
decommissioning and to the decommissioning measures themselves. The 
financing of decommissioning measures will be considered only where 
no provision to finance these measures has been made during the 
operating life of the installation. 
1.2 Obtaining authorization at national level 
Financing will be granted only to projects which have received the 
approval of the competent national authorities, particularly the safety 
author it ies. 
1.3 Obtaining a favourable opinion from the Commission in technical and 
economic terms 
At technical level, the Commission shall examine the extent to which 
the project provides a solution to the safety problem which exists. The 
examinâtio will also include an assessment of the environmental impact 
of the project. 
The Commission's examination shall refer to the studies on nuclear 
safety carried out by the international bodies, IAEA and WANO, and 
under the Phare and Tacis programmes, and shall assess the project in 
comparison with measures implemented in the Member States to solve 
similar types of problems, taking account of the recommendations made 
by the international bodies. 
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Although the list below is not exhaustive, the Council invites the 
Commission to give particular consideration to the modification 
measures below: 
Improving the containment of the primary circuit (reactor vessel 
and primary piping); 
improving the reactor cooling system, particularly the emergency 
cool ing system-, 
fire detection and extinguishing systems; 
installation of specific and independent alarm systems-, 
improving the reactor protection and monitoring system; 
control room equipment. 
Other measures resulting from the studies under way shall also be taken 
into consideration. 
At economic level, the Commission shall establish that the projects are 
justifiable, by comparing the economic characteristics and the 
efficiency of the projects in question with those of non-nuclear 
alternatives which are potentially available. Investment must relate to 
installations which are economically viable. The opinion shall refer to 
the overall energy plan which has been defined for the beneficiary 
country, in so far as such guidelines exist. 
The economic and efficiency studies shall be based on assumptions which 
reflect the reality of a market economy in terms of both the positive 
financial flows (price and quantity produced) and the negative 
financial flows (investment costs, cost of factors utilized, etc.). 
1.4 Necessity of close cooperation with at least one Community enterprise 
This condition shall be considered to have been met if a major 
proportion of the capital goods item or service which is to be financed 
is provided by a Community enterprise. 
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The guarantee of the State on whose territory the project is situated 
shall normally be required, but other first-class securities may also 
be contemplated. 
2. Limits of loan amounts 
2.1 The Commission shaii grant only loans which supplement those which the 
enterprise has contracted with other parties. 
2.2 The Commission shall limit its loans to 50% of the total cost of the 
projects mentioned in point 1.1 (in one or several tranches). The total 
Community financing for a particular project shall not exceed 50%. 
2.3 in the event of co-financing with the EBRD, the cumulative total of 
Community financing shall under no circumstances exceed 70% of the 
total cost of the project mentioned in point 1.1. 
3. Order of granting of loans 
3.1 Applications concerning the financing of expenditure effected after 1 
January 1992 shall be acceptable. 
3.2 The Commission shall use the technical and economic studies to decide, 
if necessary, which projects are to receive priority treatment. 
4. other financing conditions 
4.1 Currencies 
Loans shad be paid out in several currencies (a combination) or in a 
single currency, according to the recipient's preferences and subject 
to availability. The main currencies used shall be those of the EEC. 
Member States, the ecu, the US dollar, the Swiss franc and the yen. 
4.2 Duration 
Loans shall be granted on a medium- and long-term basis, with the 
particular duration depending on the type of project and life of the 
assets financed. The maximum duration of loans shall be twenty years. 
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4.3 Interest rates 
The interest rates shall closely follow the cost of the borrowings from 
which the loans are granted, and they shall not vary according to the 
nature or location of the project, nor according to the type or 
nationality of the recipient. Rates shall be set for each of the 
currencies used. 
The loans shall be at a fixed or variable rate, according to the 
recipient's preferences and subject to availability. 
4.4 Reimbursement 
Reimbursement of the loans shall be carried out in line with 
reimbursement of the borrowings utilized. Reimbursements shall be made 
in the same currencies and in the same proportions as the loan payouts. 
B 
ORGANIZATION OF COOPERATION WITH THE EIB 
(Text to be inserted in the Council minutes) 
The Council notes that the rules, which have already been agreed with the 
EIB, for Community participation in the financing of investment referred to 
in Decision 77/270/Euratom and listed in the Council minutes relating to 
that Decision shall continue to apply in respect of investment carried out 
in the Member States. 
The Commission shall define with the EIB how these rules are to be extended 
to apply to the financing of investment aimed at improving the degree of 
efficiency and safety of nuclear power stations in the countries of central 
and eastern Europe and of the CIS. 
_ 1 ^ _ ISSN 0254-1475 
COM(92) 467 final 
DOCUMENTS 
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Catalogue number : CB-CO-92-489-EN-C 
ISBN 92-77-49046-2 
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