WRITTEN QUESTION E-1850/98

by Carlos Pimenta (PPE) to the Commission

(12 June 1998)

Subject: Financial support granted in connection with the closing down of the Chernobyl plant and for the completion of the K2 and R4 reactors in Ukraine

1. In view of public concern about nuclear safety and the financial commitments being made in relation to the closing down of the Chernobyl plant and the completion of the K2 and R4 reactors, how does the Commission justify the apparent abandonment of the conclusions of the two 1997 EBRD-financed reports which indicated that the K2/R4 alternative should be rejected? Does the Commission have available the new study in favour of the alternative? Is it prepared to organize an open debate on the conclusions of this study and on those presented in 1997?

2. What guarantees has Ukraine given concerning the closing down of Chernobyl in exchange for the completion of the two reactors and concerning the refund of costs granted for the completion work?

3. Does the Commission consider the estimates concerning investment and the deadlines for completion of K2/R4 to be reliable? To what extent has the experience of what appears to be a more favourable example of completion of a plant in the Czech Republic been taken into account?

4. What answer can the Commission give to Parliament's recent question concerning the use of the Ukrainian part of the Community funding already granted for Chernobyl? What guarantees does the Commission have concerning the future management of the funds allocated? What is the total amount (donations and loans) already allocated to the Chernobyl plant and the completion of K2/R4 since the accident at Chernobyl?

5. The completion and closing down with full security measures of Chernobyl and of K2/R4 involves a further 2.4 billion dollars of financing from the West, most of which will come from the EU. Will the mobilization of these funds exclude all other allocation of funding to strengthen energy efficiency in Ukraine, which is generally considered to be a top priority?

6. Given that the principal financial commitment lies with the EU, does the Commission have any information about the degree of participation of companies in the EU and elsewhere towards the completion of the projects?

Answer given by Mr Van den Broek on behalf of the Commission

(8 July 1998)

1. The European bank for reconstruction and development (EBRD) has recently completed a new comprehensive study on the economic aspects of Khmelnitsky 2 and Rovno 4 (K2R4). This report will be made available as part of the public consultation process that will be performed by the Ukrainian authorities.

2. The closing down of the Chernobyl nuclear power plant (NPP) has been agreed by the Ukrainian government in the Memorandum of Understanding (MoU) signed with the Group of seven most industrialised countries (G7) and the Commission in 1995. Chernobyl closure will be part of the conditionality attached to the implementation of Euratom and EBRD loans. The lenders will take the necessary securities (state guarantee and others) to secure proper servicing of their loans.

3. As for any project of this type, the estimates concerning investment cost and time frame for the completion of K2R4 are subject to continuous improvements, on the basis of available information and studies.

4. The management of the grant funds allocated to Chernobyl projects depends on the source of funding (EBRD nuclear safety account, EBRD shelter fund, TACIS) The management of the loan funding which is envisaged will be in line with applicable procedures for Euratom loans and for EBRD loans. The Community funds allocated under the TACIS programme to Ukraine for the implementation of the MoU amount to MECU 100, excluding the contribution to the shelter fund.

5. The funding of Chernobyl related projects does not exclude all other allocation of funds for the strengthening of energy efficiency in Ukraine. TACIS continues to support such projects in the framework of the Ukrainian national action programmes.

6. Under TACIS funded projects, only companies from the Community and from the TACIS beneficiary countries are eligible for contracts. Under the EBRD special funds, the Community will receive regular information on the allocation of contracts. It must be considered however that many of these contracts are likely to be given to consortia of companies from Community and non-Community origin.