Proposal for a Council Regulation on Community financial assistance with respect to the decommissioning of Units 1 to 4 of the Kozloduy Nuclear Power Plant in Bulgaria “Kozloduy Programme” SEC(2009)1431
Date: 2009-10-27
Institutions: European Commission
Subjects: Bulgaria, EU aid, EU financing, decommissioning of power stations, nuclear power station, nuclear safety

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 27.10.2009 
COM(2009)581 final 

2009/0172 (CNS) 

Proposal for a  

COUNCIL REGULATION 

on Community financial assistance with respect to the decommissioning of Units 1 to 4 
of the Kozloduy Nuclear Power Plant in Bulgaria 

“Kozloduy Programme” 

SEC(2009)1431 

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EXPLANATORY MEMORANDUM 

1. 

Introduction 

Nuclear  decommissioning  is  the  final  step  in  the  lifecycle  of  a  nuclear  installation  which 
requires  a  long  term  financial  planning.  In  practice,  decommissioning  starts  with  the  final 
shutdown  of  a  nuclear  installation  with  the  objective  of  releasing  the  installation  from 
regulatory control and lifting the radiological protection restrictions imposed while it was in 
operation. Decommissioning continues until the site has been fully restored and all radioactive 
waste as well as spent fuel safely managed. As a consequence, decommissioning operations 
extend over an extremely long period. 

In case of a final shutdown of a nuclear power plant before its initially foreseen end of design 
lifetime  there  is  a  need  to  address  the  consequences  of  the  lost  production  capacity  in  the 
energy sector, such as maintaining production capacity to safeguard security of supply as well 
as enhancing energy efficiency in various sectors. 

Financial Community assistance is provided to Lithuania, Slovakia and Bulgaria as a measure 
of  solidarity  to  support  the  Member  States'  efforts  in  implementing  their  commitment  of 
closing down first generation nuclear reactors. The support to Bulgaria ends in 2009, whereas 
in  the  case  of  Lithuania  and  Slovakia  the  support  runs  until  2013.  For  equal  treatment  the 
proposed extension of support for Bulgaria shall cover the period 2010 – 2013. 

Bulgaria  requested  further  funding  since  2005  (European  Council  meeting  of  16  December 
2005). A strategic justification document was submitted to the Commission in 2009. 

2. 

The situation in Bulgaria 

To ensure safe decommissioning of nuclear installations and the related management of waste 
it is vital to have adequate financial resources transparently managed and available in time for 
its  intended  use.  The  Member  States  of  the  European  Union  which  use  nuclear  energy  to 
produce  their  electricity  have  put  systems  in  place,  which  differ  from  one  Member  State  to 
another, to ensure that the necessary funding for the decommissioning of nuclear installations 
is available. 

Bulgaria  put  such  a  system  in  place  relatively  recently  for  its  current  and  its  inherited 
liabilities from the  past. Other new Member States that have inherited nuclear power plants 
from the past continue to operate their plants and have the possibility to build up the required 
funds.  The  nuclear  power  plants  in  Bulgaria  however  were  subject  to  early  closure  (see 
below). Consequently Bulgaria did not have the time to accumulate sufficient national funds 
to cover the full costs for decommissioning of the nuclear power plants. 

This situation called for Community  solidarity in response: the country has nuclear reactors 
for which early shutdown commitments were negotiated at the time of accession and included 
in the Act of Accession that entered into force on 1 January 2007. 

3. 

Early shutdown commitments and their financial consequences 

During the accession negotiations, Bulgaria committed itself to the closure of Units 1 and 2 of 
the Kozloduy nuclear power plant by 31 December 2002 and to the closure of Units 3 and 4 
by  31  December  2006  at  the  latest  (all  VVER  440/230  type  reactors).  These  closure  and 

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subsequent decommissioning commitments were included in Article 30 of the Act concerning 
the conditions of Accession of the Republic of Bulgaria and Romania and the adjustments to 
the treaties on which the European Union is founded ("2005 Act of Accession"). 

The 2005 Act of Accession provides, inter alia, for Community support under the Kozloduy 
Programme  of  €210  million  for  the  period  2007  –  2009.  This  support  ensured  a  seamless 
continuation  of  the  pre-accession  PHARE  support  under  which  €340  million  had  been 
earmarked  for  Bulgaria  up  to  2006.  The  2007  –  2009  support  is  implemented  as  EU 
contribution  to  the  Kozloduy  International  Decommissioning  Support  Funds  (KIDSF) 
managed by the European Bank for Reconstruction and Development (EBRD), to which the 
Community is the main contributor. 

At present all the 4 units have been closed and all four reactors have been defueled. Initially a 
"deferred  dismantling  strategy"  was  chosen  in  2001.  Meanwhile  following  a  strategy 
assessment  it  has  been  decided  by  the  Bulgarian  government  to  change  to  an  "immediate 
dismantling strategy" in 2006. This is in line with international recommendations and allows 
an  accelerated  decommissioning  process,  to  preserve  the  available  know-how  of  the  plant 
staff  and  to  employ  them  for  dismantling  activities,  thereby  also  mitigating  the  social 
consequences  of  the  closure.  The  consequence  of  having  changed  the  decommissioning 
strategy is that funding must be available much earlier. Bulgaria requested such funding since 
2005. 

The Bulgarian support up to now was governed by the Accession Treaty. At the time of the 
negotiations of the financial perspectives  Bulgaria was not an EU Member State. Bulgaria's 
strategic  decision  to  implement  immediate  dismantling  was  taken  rather  late.  Therefore  no 
provision in the financial perspective 2007-2013 has been made for the prolonged funding in 
Bulgaria. In 2005 Bulgaria requested further funding at the Council Meeting. It was acted that 
this would be dealt with in the revision of the financial perspectives. It is however vital, for an 
appropriate period, to have seamless financing available in order not to risk losing the on site 
expertise and put safe dismantling in danger. 

The  Community  assistance  provides  support  to  the  decommissioning  of  the  nuclear  power 
plant including projects to manage and to safely store dismantling waste and spent fuel. The 
Community  assistance  covers  as  well  measures  in  the  energy  sector  to  mitigate  the 
consequences  due  to  the  early  closure  of  those  plants.  Those  measures  are  for  example  the 
replacement of production capacity, measures related to security of supply or the increase in 
energy efficiency in various public and private sectors. 

4. 

Current status of Community assistance 

By the end of 2008, the total contribution agreements to KIDSF covered €525 million, out of 
which  €490  million  comes  from  the  EU.  For  2009  an  additional  EU  contribution  to  the 
KIDSF  will  follow  over  an  amount  of  €77.5  mill ion.  Out  of  the  current  contributions  €513 
million have been committed by the EBRD in grant agreements. Overall €253 million were 
committed  to  decommissioning  projects,  out  of  which  €76  million  for  waste  management 
projects,  and  €259  million  were  spent  on  energy  projects. Until end of 2009  there currently 
remain  €89.5  million  for  additional  allocation  to  grant  agreements  of  the  KIDSF.  Effective 
payments received by the KIDSF total €383 million. 

The  support  put  in  place  until  2009  was  mainly  dedicated  to  decommissioning  preparation 
works.  Good  progress  utilising  the  community  funds  was  achieved.  The  achievements  in 

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decommissioning  can  be  summarised  with  the  list  of  major  global  projects  currently  under 
implementation: 

- spent fuel storage; 

- laboratory and full scope radiological inventory of units 1-4 measurements; 

- decommissioning infrastructure preparations including separation, security and radiological 
access control of the site; 

- waste treatment and conditioning; 

- dismantling tools, fragmentation and decontamination workshops; 

- site storage facilities for decay, low level and conventional waste; 

- waste transportation at the site and processing devices; 

- environmental assessment of waste treatment projects; 

- comprehensive free release measurements; 

- safety analysis reports of decommissioning activities; 

- project management. 

The  mitigating  measures  in  the  energy  sector  for  the  period  until  2009,  were  focused  on 
priorities  targeting  mainly  improvements  in  industrial  and  residential  energy  efficiency  and 
assistance in strengthening the use of renewable energy sources. The corresponding projects 
were quick start ones, resulting in massive energy savings and CO2 emission reductions. Up 
to  June  2008  the  emission  reductions  amounted  to  1.2  million  tons  CO2  per  year  and  the 
electricity savings were at the rate of 1.5 million MWh per year which is equivalent to 242 
MW installed capacity. 

5. 

Extension of financial support 

The main objective of this proposal is to extend the support to Bulgaria to accompany and to 
ascertain  the  safe  maintenance  and  decommissioning  of  the  Kozloduy  nuclear  power  plant 
units  1  -  4.  Therein  the  specific  objective  is  the  advancement  in  the  approved 
the  actual  physical 
decommissioning  plan.  This 
decommissioning and dismantling of the nuclear power plant – units 1 to 4 – as well as the 
waste  treatment.  At  the  same  time  it  contributes  to  mitigate  social/economic  impacts  of  the 
early closure by continuously employing the staff from the closed nuclear power plant. This is 
important to maintain a sufficiently high safety standard after the closure. In the non-nuclear 
window,  security  of  supply  needs  to  be  assured  after  the  shutdown,  as  well  as  sufficient 
replacement capacity for the closed down capacity. 

the  safe  maintenance, 

includes 

As mentioned previously, no funds for later decommissioning were set aside before Bulgaria 
inherited the nuclear  power plant. Early closure in the Accession Treaty prevented Bulgaria 
from accumulating the necessary funds. The change in strategy enhancing the efficiency and 
effectiveness of the decommissioning programme requires funds to be available continuously 
after 2009. 

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The  continuation  of  the  financial  support  is  vital  to  keep  the  safety  up  to  the  required 
standards.  Safety  could  be  compromised  by  losing  the  necessary  expertise,  an  international 
best practice to use to a large extend own staff, a clear risk if no adequate funding is available 
over the next years to maintain this expertise and to progress with the dismantling works. 

Bulgaria has demonstrated an excellent track record in the use of decommissioning funds up 
to 2009. To meet the above mentioned objectives and taking into consideration the absorption 
capacity  evaluated  in  the  light  of  the  assistance  given  during  the  current  period,  a  total 
Community  contribution  of  additional  €300  milli on  will  enable  Bulgaria  to  progress  in 
decommissioning  and  to  mitigate  the  consequences  of  the  early  closure.  The  extension  of 
financial support is of course related to the immediate dismantling of all four units. 

The  purpose  of  this  proposal  for  a  regulation  is  to  establish  the  legal  framework  to 
enable Community support to be provided from 1 January 2010 to 31 December 2013. 

5.1. 

Scope of the financial support 

A  strategic  justification  document  was  submitted  to  the  Commission  in  2009.  It  has  been 
thoroughly analysed by the Commission services. 

5.1.1.  Decommissioning: 

Decommissioning must be the priority of the extension of financial Community assistance to 
Bulgaria. The decommissioning preparation work is in good progress utilising the Community 
funds  put  in  place  until  2009.  To  finalise  the  preparatory  stage  and  to  commence  with  the 
actual dismantling operations further financial support is required for the period 2010 - 2013, 
given the extent of these activities. 

The  seamless  continuation  of  decommissioning  is  important  in  order  to  guarantee  approved 
safety  levels,  maintain  the  current  expertise  available  at  the  plant  and  to  avoid  creating  a 
social-economic problem due to increase of unemployment (currently 715 staff are involved 
in decommissioning works). 

The extension of financial support will ensure the continuation of safe decommissioning. The 
support will be dedicated to the following items: 

(1) 

(2) 

(3) 

(4) 

Project  management,  engineering  and  technical  assistance  for  the  support  of  the 
implementation of the decommissioning programme. 

The  provision  of  salaries  of  715  KNPP  experts  (operation,  maintenance,  technical 
support, project management) at the Kozloduy site, working for the decommissioning 
of  Units  1-4.  The  active  involvement  of  the  plant  staff  reduces  the  need  of  external 
the 
to 
organisations  and  highly  contributes 
decommissioning. 

the  reduction  of 

the  costs  of 

Contribution to the construction of the National Radioactive Waste Disposal Facility, 
crucial for the implementation of the decommissioning programme. 

Site  infrastructure  and  treatment  of  dismantled  waste,  including  additional  allocation 
for projects already in the tendering process. 

5.1.2.  Mitigation measures in the energy sector 

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Taking  into  account  the  developments  and  the  real  needs,  the  priorities  in  the  non-nuclear 
sector  shall  be  refocused  to  address  the  key  issues  of  improvements  of  the  energy  supply 
security  and  reliability,  diversification  of  the  energy  consumption,  energy  efficiency  and 
carbon dioxide emissions reduction. 

Achieving  those  priorities,  as  future  measures  to  mitigate  the  early  closure  consequences, 
require  strong  efforts  to  provide  the  necessary  reconstructions,  energy  efficiency  measures, 
modernisation  and  diversification  of  the  energy  sectors.  These  priorities  are  reflected  in  the 
Bulgarian Energy Strategy, drafted in November 2008, following the development of the new 
European energy policy. 

6. 

Implementation 

The specific budget line, 060505, has been created and is used for financing the international 
decommissioning  support  programmes  under 
the  Financial  Perspective  2007-2013, 
specifically  up  to  2009  for  Bulgaria.  Financial  assistance  for  the  period  2010-2013  for 
Bulgaria should also be accommodated through this budget line. Accordingly the additional 
€300 million should be made available for the budget line 060505. 

The continuation of the current implementation route for the financial Community assistance 
would  lead  to  an  additional  Community  contribution  to  the  KIDSF  administrated  by  the 
EBRD. 

Detailed  procedures  for  the  implementation  of  the  additional  support  to  Bulgaria  for  the 
period 2010 – 2013 will be brought in line with the procedures for the support for Lithuania 
and  Slovakia.  The  Commission  Decision  on  Procedures  (C(2007)5538)  will  be  amended 
accordingly. 

As  under  the  current  support,  the  additional  support  will  be  committed  through  an  annual 
Commission  Decision  on  Financing  fixing  the  amount  of  the  annual  contribution  as  well  as 
the  objectives  of  the  use  of  the  funds  detailed  in  the  annually  updated  Combined 
Programming Document annexed to the Commission Decision on Financing. 

7. 

Legal basis 

In  the  case  of  Bulgaria,  Article  30  of  the  2005  Act  of  Accession  refers  only  to  the  period 
2007-2009. The Act does not provide a specific legal basis for Bulgaria for continued support 
beyond 2009 as it did in the case of Lithuania. The Treaty of Accession and Article 30 of the 
Act  of  Accession  can  therefore  not  constitute  an  appropriate  legal  basis  for  putting  further 
financing  beyond  2009  in  place.  The  appropriate  legal  basis  therefore  is  Article  203  of  the 
Euratom  Treaty.  The  same  basis  has  been  used  for  the  additional  Community  assistance 
provided  to  the  Republic  of  Slovakia  under  the  current  Financial  Perspective.  That  Article 
provides  that  "if  action  by  the  Community  should  prove  necessary  to  attain  one  of  the 
objectives  of  the  Community,  and  this  Treaty  has  not  provided  the  necessary  powers,  the 
Council  shall,  acting  unanimously  on  a  proposal  from  the  Commission  and  after  consulting 
the European Parliament, take the appropriate measures". 

8. 

Conclusion 

The  financing  of  the  decommissioning  of  nuclear  installations  covered  by  early  closure 
commitments was a very important subject during the Accession negotiations with Bulgaria. 

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its  solidarity  by  granting 

Bulgaria has agreed to shut down four units of the Kozloduy plant. For its part, the European 
to  support 
Union  has  expressed 
decommissioning. The Union has already fulfilled its commitments for the period 2007-2009. 
However,  the  actual  needs  and  the  consequences  of  the  early  closure  of  Kozloduy  units 
revealed recently that it is now necessary to establish the instruments to support Bulgaria for 
the  remaining  part  of  the  present  Financial  Perspectives  for  the  period  2010-2013.  Bulgaria 
has requested this further support since 2005.  

financial  assistance 

In  the  light  of  the  foregoing,  the  Council  is  asked  to  adopt  the  attached  proposal  for  a 
regulation. 

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2009/0172 (CNS) 

Proposal for a  

COUNCIL REGULATION 

on Community financial assistance with respect to the decommissioning of Units 1 to 4 of 
the Kozloduy Nuclear Power Plant in Bulgaria 

“Kozloduy Programme” 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Atomic  Community,  and  in  particular 
Article 203 thereof, 

Having regard to the Bulgarian request for further funding, 

Having regard to the proposal from the Commission,  

Having regard to the opinion of the European Parliament,  

Whereas: 

(1) 

(2) 

Bulgaria  committed  itself  to  the  closure  of  Units  1  and  2  and  Units  3  and  4  of  the 
Kozloduy  Nuclear  Power  Plant  by  31  December  2002  and  31  December  2006, 
respectively and to the subsequent decommissioning of these units. The European Union 
expressed  its  willingness  to  continue  to  provide  financial  assistance  up  to  2009  as  an 
extension  of  the  pre-accession  aid  planned  under  the  Phare  programme  in  support  of 
Bulgaria's decommissioning efforts. 

The 2005 Treaty concerning the accession of the Republic of Bulgaria and Romania to the 
European  Union,  and  in  particular  Article  30  of  the  Act  concerning  the  conditions  of 
accession of the Republic of Bulgaria and Romania and the adjustments to the Treaties on 
which the European Union is founded,  established in view of Bulgaria's commitment to 
close Unit 3 and Unit 4 of the Kozloduy Nuclear Power Plant an assistance programme 
(hereinafter referred to as "Kozloduy Programme") with a budget of EUR 210 million for 
the period 2007 to 2009. 

(3) 

International decommissioning funds managed by the European Bank for Reconstruction 
and Development (EBRD) have been in place for a number of years. The Community is 
the main contributor to these funds. 

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(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

The Union recognises the effort made and the good progress achieved by Bulgaria in the 
decommissioning preparation stage of the Kozloduy Programme utilising the community 
funds put in place until 2009, and the need for further financial support beyond 2009 in 
order to continue the progress with the actual dismantling operations. 

It is equally important to use the Kozloduy Nuclear Power Plant's own resources, as this 
contributes to the availability of the necessary expertise and at the same time mitigates the 
social and economic impact of the early closure by continuously employing the staff from 
the closed nuclear power plant. The continued financial support is therefore important to 
maintain the required safety standard. 

The  Union  recognises  also  the  need  for  financial  support  to  progress  further  with 
mitigating  measures  in  the  energy  sector  given  the  extent  of  the  capacity  loss  by  the 
closure of the nuclear units and its impact on the security of supply in the region. 

Consequently, provision should be made for a sum of EUR 300 million from the general 
budget  of  the  European  Union  to  fund  the  decommissioning  of  the  Kozloduy  Nuclear 
Power Plant over the period from 2010 to 2013. 

The  appropriations  of  the  general  budget  of  the  European  Union  for  decommissioning 
should not lead to distortions of competition in relation to power supply companies on the 
energy market in the Union. These appropriations should also be used to finance measures 
to compensate the loss of production capacity in line with the acquis. 

The  financial  assistance  should  continue  to  be  made  available  as  a  Community 
contribution  to  the  Kozloduy  International  Decommissioning  Support  Fund  managed  by 
the EBRD. 

(10)  The tasks  of the EBRD include  managing the public funds allocated to the programmes 
for  decommissioning  nuclear  power  plants  and  monitoring  the  financial  management  of 
these  programmes  so  as  to  optimise  the  use  of  public  money.  In  addition,  the  EBRD 
carries  out  the  budget  tasks  entrusted  to  it  by  the  Commission  in  line  with  the 
requirements of Article 53quinquies of the Financial Regulation. 

(11) 

In order to ensure the highest possible efficiency, the decommissioning of the Kozloduy 
Nuclear  Power  Plant  should  be  carried  out  with  recourse  to  the  best  available  technical 
expertise, and with due regard to the nature and technological specifications of the units to 
be shut down. 

(12)  The  decommissioning  of  the  Kozloduy  Nuclear  Power  Plant  will  be  carried  out  in  line 
with the legislation on the environment, particularly Council Directive 85/337/EEC of 27 
June  1985  on  the  assessment  of  the  effects  of  certain  public  and  private  projects  on  the 
environment1. 

1 

OJ L 175, 5.7.1985, p. 40.. 

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(13)  A  financial  reference  amount,  within  the  meaning  of  point  38  of  the  Interinstitutional 
Agreement  of  17  May  2006  between  the  European  Parliament,  the  Council  and  the 
Commission  on  budgetary  discipline  and  sound  financial  management2,  should  be 
included in this Regulation for the entire duration  of the Kozloduy Programme,  without 
thereby  affecting  the  powers  of  the  budgetary  authority  as  defined  by  the  Treaty 
establishing the European Community. 

(14)  For  the  adoption  of  measures  necessary  for  the  implementation  of  this  Regulation  the 
Commission should be assisted by the Committee, established by Article 8(1) of Council 
Regulation (EURATOM) N° 549/20073, 

HAS ADOPTED THIS REGULATION: 

Article 1 

This Regulation establishes the programme laying down detailed rules for the implementation of 
Community's  financial  contribution  to  address  the  decommissioning  of  Units  1  to  4  of  the 
Kozloduy  Nuclear  Power  Plant  and  the  consequences  of  their  closure  in  Bulgaria  (hereinafter 
referred to as "Kozloduy Programme"). 

Article 2 

The  Community  contribution  to  the  Kozloduy  programme  shall  be  granted  for  the  purpose  of 
providing financial support for measures connected with the decommissioning of the Kozloduy 
Nuclear  Power  Plant,  measures  for  environmental  upgrading  in  line  with  the  acquis  and  for 
modernising  conventional  production  capacity  to  replace  the  production  capacity  of  the  four 
reactors at the Kozloduy Nuclear Power Plant and other measures which stem from the decision 
to  close  and  decommission  this  plant  and  which  contribute  to  the  necessary  restructuring, 
upgrading  of  the  environment  and  modernisation  of  the  energy  production,  transmission  and 
distribution sectors in Bulgaria as well as to enhancing security of supply and energy efficiency 
in Bulgaria. 

Article 3 

1. 

2. 

The  financial  reference  amount  necessary  for  the  implementation  of  the  Kozloduy 
programme for the period from 1 January 2010 to 31 December 2013 shall be EUR 300 
million. 

The  annual  appropriations  shall  be  authorised  by  the  budgetary  authority  within  the 
limits of the financial perspectives. 

2 
3 

OJ C 139, 14.6.2006, p. 1. 
OJ L 131, 23.5.2007, p. 1. 

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3. 

The  amount  of  the  appropriations  allocated  to  the  Kozloduy  Programme  may  be 
reviewed in the course of the period from 1 January 2010 to 31 December 2013 to take 
account of the progress made with the implementation of the programme and to ensure 
that the programming and allocation of the resources are based on actual payment needs 
and absorption capacity. 

Article 4 

In  prolongation  of  what  has  been  specified  in  the  Accession  Acts,  the  contribution  for  certain 
measures  may  amount  to  up  to  100  %  of  the  total  expenditure.  Every  effort  shall  be  made  to 
continue  the  co-financing  practice  established  under  the  pre-accession  assistance  and  the 
assistance given over the period 2007-2009 for Bulgaria's decommissioning effort as well as to 
attract co-financing from other sources, as appropriate. 

1. 

2. 

1. 

2. 

Article 5 

Financial  assistance  for  measures  under  the  Kozloduy  Programme  shall  be  made 
available as a Community contribution to the Kozloduy International Decommissioning 
Support  Fund,  managed  by  the  EBRD,  in  line  with  Art.  53  quinquies  of  the  Financial 
Regulation. 

Measures  under  the  Kozloduy  Programme  shall  be  adopted  in  accordance  with  Article 
8(2). 

Article 6 

The Commission may have an audit of the use made of the assistance carried out either 
directly by its own staff or by any other qualified outside body of its choice. Such audits 
may  be  carried  out  throughout  the  duration  of  the  agreement  between  the  Community 
and  the  EBRD  on  making  Community  funds  available  to  the  Kozloduy  International 
Decommissioning Support Fund and for a period of five years from the date of payment 
of the balance. Where appropriate, the audit findings may lead to recovery decisions by 
the Commission 

Commission  staff  and  outside  personnel  authorised  by  the  Commission  shall  have 
appropriate  right  of  access,  particularly  to  the  beneficiary’s  offices  and  to  all  the 
information, including information in electronic format, needed in order to conduct such 
audits. 

The  Court  of  Auditors  shall  enjoy  the  same  rights,  especially  of  access,  as  the 
Commission. 

Furthermore,  in  order  to  protect  the  Community’s  financial  interests  against  fraud  and 
other irregularities, the European Anti-Fraud Office (OLAF) may carry out on-the-spot 
checks  and  inspections  under  the  Kozloduy  Programme  in  accordance  with  Council 

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3. 

4. 

Regulation  (Euratom,  EC)  No  2185/96  of  11  November  1996  concerning  on-the-spot 
checks and inspections carried out by the Commission in order to protect the European 
Communities' financial interests against fraud and other irregularities 4. 

For  the  Community  action  financed  under  this  Regulation,  the  term  ‘irregularity’  in 
Article 1(2) of Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on 
the  protection  of  the  European  Communities  financial  interests5  shall  mean  any 
infringement of a provision of Community law or any breach of a contractual obligation 
resulting from an act or omission by an economic operator which has, or would have, the 
effect of prejudicing the general budget of the European Union or budgets managed by it 
by  an  unjustified  item  of  expenditure  or  budgets  managed  by  other  international 
organisations on behalf of the Communities. 

The  agreements  between  the  Community  and  the  EBRD  on  making  Community  funds 
available  to  the  Kozloduy  International  Decommissioning  Support  Fund  shall  provide 
for  appropriate  measures  to  protect  the  financial  interests  of  the  Community  against 
fraud, corruption and other irregularities and to enable the Commission, OLAF and the 
Court of Auditors to carry out on-the-spot checks. 

Article 7 

The  Commission  shall  ensure  the  implementation  of  this  Regulation  and  shall  report  at  regular 
intervals  to  the  European  Parliament  and  the  Council.  It  shall  carry  out  a  mid-term  review,  as 
provided for in Article 3 (3). 

Article 8 

1. 

2. 

The  Commission  shall  be  assisted  by  the  Committee  established  by  article  8(1)  of 
Council Regulation (Euratom) N° 549/2007.  

Where reference is made to this paragraph, the procedure provided for in Article 8(2) of 
Regulation (Euratom) N° 549/2007 shall apply. 

This Regulation shall enter into force on the twentieth day following that of its publication in the 
Official Journal of the European Union. 

Article 9 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

4 
5 

(OJ L 292, 15.11.1996, p. 2. 
OJ L 312, 23.12.1995, p. 1. 

EN 

12 

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Done at Brussels, 

For the Council 
Andris PIEBALGS 
Member of the Commission 

EN 

13 

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LEGISLATIVE FINANCIAL STATEMENT 

1. TITLE OF THE PROPOSAL: 

“Kozloduy Programme” for decommissioning the Kozloduy Nuclear Power Plant (Bulgaria) 

2. ABM/ABB (ACTIVITY-BASED MANAGEMENT/ACTIVITY-BASED BUDGETING) 
FRAMEWORK 

Policy area(s) concerned and associated activity/activities: 

Transport and energy 

0605 Nuclear energy 

3. BUDGET LINES 

3.1 Budget lines (operational lines and related technical and administrative assistance lines (ex-
BA lines)), including headings: 

060505 Nuclear safety — Transitory measures (Decommissioning) 

3.2 Duration of the action and of the financial impact: 

2010-2013 

3.3 Budgetary characteristics (add rows if necessary): 

Budget 
line 

060505 

Type of expenditure 

New 

EFTA 
participation 

Participation by 
applicant 
countries 

Heading in 
Financial 
Perspective 

DA6 

NCE 

None 

None 

None 

No 1a 

6 

Differentiated appropriations. 

EN 

14 

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4. SUMMARY OF RESOURCES 

4.1 Financial resources 
4.1.1. Summary of commitment appropriations (CA) and payment appropriations (PA) 

EUR million (to 3 decimal places) 

Sectio
n No 

2010 

2011 

2012 

2013 

n 
+4 

n + 
5 
and 
sub
seq. 
yrs.

Total 

Type of expenditure 

Operational expenditure7 

Commitment 
appropriations (CA) 

8.1 

a 

75 

75 

appropriations 

Payment 
(PA) 
Administrative expenditure within reference amount8 

0 

0 

b 

75 

75 

75 

75 

0 

0 

300 

75 

75 

300 

& 
Technical 
administrative  assistance 
(NDA) 

8.2.4 

c 

TTOOTTAALL  RREEFFEERREENNCCEE  AAMMOOUUNNTT 

0 

0 

0 

0 

0 

0 

0 

Commitment 
appropriations 

Payment 
Appropriations 

a+c 75 

b+c 0 

75 

0 

75 

75 

75 

75 

0 

0 

300 

75 

75 

300 

Administrative expenditure not included in reference amount9 

Human 
associated 
(NDA) 

resources 

and 
expenditure 

Administrative  costs,  other 
than  human  resources  and 
not 
associated 
reference 
in 
included 
amount (NDA) 

costs, 

0.305 

0.305 

0.305 

0.305 

0 

0 

1.220 

0.0144  0.0144 

0.0144  0.0144  0 

0 

0.058 

8.2.5 

d 

8.2.6 

e 

7 
8 
9 

Expenditure that does not fall under Chapter xx 01 of the Title xx concerned. 
Expenditure within Article xx 01 04 of Title xx. 
Expenditure within Chapter xx 01 other than Articles xx 01 04 or xx 01 05. 

EN 

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Total indicative financial cost of intervention 

TOTAL  CA 
including 
cost of human resources 

TOTAL  PA 
including 
cost of human resources 

a+c
+d+
e 

b+c
+d+
e 

75.319  75.319 

75.319 

75.319 

0 

0 

301.28

0.319 

0.319 

75.319 

75.319 

75 

75 

301.28

Co-financing details 

If the proposal involves co-financing by Member States or other bodies (please specify which), 
an  estimate  of  the  level  of  this  co-financing  should  be  indicated  in  the  table  below  (additional 
lines may be added if different bodies are foreseen for the provision of the co-financing): 

EUR million (to 3 decimal places) 

Co-financing body: 

Year n 

n + 1

n + 2 

n + 3 

n + 4 

…………………… 

f 

0 

0 

0 

0 

0 

TOTAL  CA  including 
co-financing 

a+c+d
+e+f 

75.319  75.319  75.319  75.319  0 

n+5 
and 
later 

0 

0 

Total 

0 

301.28

4.1.2. Compatibility with the financial programming 

(cid:133) 

Proposal compatible with the existing financial programming. 

Proposal  will  entail  reprogramming  of  the  relevant  heading  in  the  Financial 

(cid:59) 
Perspective. 

* Using the margin for the heading concerned. If this proves to be insufficient for 2010, 
the Commission will propose mobilising the flexibility instrument. 

Proposal  may  require  application  of  the  provisions  of  the  Inter-institutional 

(cid:59) 
Agreement10 (i.e. flexibility instrument or revision of the Financial Perspective). 

4.1.3. Financial impact on revenue 

(cid:59) 

(cid:133) 

Proposal has no financial impact on revenue 

Proposal has financial impact - the effect on revenue is as follows: 

10 

See points 19 and 24 of the Inter-institutional Agreement. 

EN 

16 

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Note: All details and observations relating to the method of calculating the effect on 
revenue should be shown in a separate annex. 

EUR million (to one decimal place) 

Budget line 

Revenue 

Prior to 
action 
[Year 
n-1] 

Situation following action 

[Yea
r n] 

[n+1] [n+2] [n+3

] 

[n+4]  [n+5]
11 

a) Revenue in absolute terms

b) Change in revenue 

 ∆ 

(Please specify each revenue budget line involved, adding the appropriate number of 
rows to the table if there is an effect on more than one budget line.) 

4.2. Human resources FTE (including officials, temporary and external staff) – see details under 
point 8.2.1. 

Annual requirements 

Year n 

n + 1 

n + 2 

n + 3 

n + 4 

n+5 
and 
later 

number 
Total 
human resources 

of 

2.5 

2.5 

2.5 

2.5 

0 

0 

5. CHARACTERISTICS AND OBJECTIVES 

Details of the context of the proposal are required in the Explanatory Memorandum. This 
section  of  the  Legislative  Financial  Statement  should  include  the  following  specific 
complementary information: 

5.1. Need to be met in the short or long term 

During the accession negotiations, Bulgaria committed itself to the closure of Units 1 and 2 of the 
Kozloduy  Nuclear  Power  Plant  in  2002  and  Units  3  and  4  by  31 December 2006  at  the  latest. 
These closure commitments were included in the Protocol to the Act concerning the conditions of 
Accession of the Republic of Bulgaria and Romania to the European Union. 

11 

Additional columns should be added if necessary, i.e. if the duration of the action exceeds 6 years. 

EN 

17 

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It  should  be  reiterated  that  the  aid  covers  the  decommissioning  process  and  its  non-nuclear 
consequences.  

The study funded under Phare (carried out by the EDF/Framatome consortium and confirmed by 
other international studies) estimates the costs of decommissioning Units 1 to 4 of the Kozloduy 
Nuclear  Power  Plant  (type  VVER 440/230)  at  about  EUR  710 million  (at  2000  prices)  for  all 
operations, including waste treatment, but excluding the final disposal of spent fuel. The figures 
presented  by  the  Bulgarian  authorities  have  always  been  higher.  The  non-nuclear  costs  arising 
from decommissioning must be added (for example, for replacement of production capacity and 
measures related to security of supply). 

Given  the  considerable  funding  needed  for  the  decommissioning  of  these  installations,  the 
European Union has also accepted that, for the period covered by the next Financial Perspective, 
the overall appropriations should be appropriate and the programming of these resources should 
be based on actual payment needs and actual absorption capacity.  

5.2. Added value of Community involvement and coherence of the proposal with other financial 
instruments and possible synergy 

The  financing  of  the  decommissioning  of  nuclear  installations  covered  by  early  closure 
commitments  was  a  very  important  subject  during  the  discussions  for  enlargement  of  the 
European Union. The States concerned have agreed to shut down certain reactors. For its part, the 
European  Union  has  expressed  its  solidarity  by  granting  financial  assistance  to  support 
decommissioning. The EU has already fulfilled its commitments for the period 2007-09. It is now 
necessary to implement the necessary instruments to enable it to fulfil its obligations within the 
framework of the Financial Perspective for the period 2010-13. 

5.3. Objectives, expected results and related indicators of the proposal in the context of the ABM 
framework 

Objective: 

To  finance  the  decommissioning  of  the  Kozloduy  Power  Plant  –  Units  1  to  4,  and  energy 
measures as a consequence of the closure 

The credits allocated to the Kozloduy Programme will be used to fund various measures referred 
to under Article 30(2) of the Protocol to the Accession Treaty.  

Priority will be given to the actual decommissioning work, in order to guarantee a high level of 
nuclear safety, to measures to modernise conventional energy production capacities, to improving 
energy  security  by  connecting  to  trans-European  networks,  and  to  measures  to  help  staff  at  the 
power plant to maintain a high level of operational safety at the plant in the run-up to the closure 
and during the decommissioning of the reactors.  

Result: 

The shutdown of reactors 1 to 4 and commencing the decommissioning of the power plant 

EN 

18 

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Indicator: 

The monitoring indicators will involve, in particular: 

•  The actual closure by the planned deadlines of the reactors concerned, i.e. Kozloduy 

1 and 2 by 31 December 2002, Kozloduy 3 and 4 by 31 December 2006 

•  Availability of annual financing plans based on progress reports 

•  Drawing-up of grant agreements with the EBRD 

•  Drawing-up of detailed agreements including cost estimates 

•  Regular reporting 

•  Commencing decommissioning in line with the national decommissioning strategy 

5.4. Method of implementation (indicative) 
Show below the method(s)12 chosen for the implementation of the action. 

(cid:133) Centralised management 

(cid:133) 

(cid:133) 

directly by the Commission 

indirectly by delegation to: 

(cid:133) 

(cid:133) 

Regulation, 

executive agencies, 

bodies  set  up  by  the  Communities,  as  referred  to  in  Art.  185  of  the  Financial 

(cid:133) 

national public bodies / bodies with  a public service mission. 

12 

If more than one method is indicated please provide additional details in the “Relevant comments” section 
of this point. 

EN 

19 

   EN 

 
 
 
 
                                                 
(cid:133) Shared or decentralised management 

(cid:133)  With Member States 

(cid:133)  With third countries 

(cid:59) Joint management with international organisations (please specify) 

Relevant  comments:  The  credits  may  be  made  available  as  a  Community  contribution  to  the 
International  Decommissioning  Support  Fund  administered  by  the  European  Bank  for 
Reconstruction and Development (EBRD).  

6. MONITORING AND EVALUATION 

6.1. Monitoring system 

Monitoring twice a year 

6.2 Evaluation 

6.2.1. Ex-ante evaluation 

An ex-ante evaluation has been carried out using own resources. 

6.2.2. Measures taken following an intermediate/ex-post evaluation (lessons learned from similar 
experiences in the past) 

Following the intermediate evaluation of the Ignalina and Bohunice programmes, a strategy has 
been drawn up to implement the decommissioning programmes. 

6.2.3. Terms and frequency of future evaluations 

Mid-term intermediate evaluation and ex-post evaluation 

7. ANTI-FRAUD MEASURES 

The Commission may have an audit of the use made of the grant carried out either directly by its 
own staff or by any other qualified outside body of its choice. These audits may be carried out 
throughout the term of the contract and for a period of five years from the date of the payment of 
the balance of the grant. Where appropriate, the audit findings may lead to recovery decisions by 
the Commission. 

Commission staff and outside persons authorised by the Commission must be granted appropriate 
access  to  the  offices  of  the  beneficiary  and  to  all  the  information,  including  information  in 
electronic format, needed in order to conduct such audits. 

The Court of Auditors shall enjoy the same rights, including rights of access, as the Commission. 

EN 

20 

   EN 

 
 
Furthermore, in order to protect the European Communities' financial interests against fraud and 
other  irregularities,  the  European  Anti-Fraud  Office  (OLAF)  may  carry  out  on-the-spot  checks 
and  inspections  under  this  programme  in  accordance  with  Council  Regulation  (Euratom,  EC) 
No 2185/9613.  

For the Community action financed under this Regulation, the term irregularity in Article 1(2) of 
Regulation (EC, Euratom) No 2988/95 shall mean any infringement of a provision of Community 
law or any breach of a contractual obligation resulting from an act or omission by an economic 
operator which has, or would have, the effect of prejudicing the general budget of the European 
Communities  or  budgets  managed  by  the  European  Communities  by  an  unjustified  item  of 
expenditure or budgets managed by other international organisations on behalf of the European 
Communities. 

The  agreements  between  the  Community  and  the  European  Bank  for  Reconstruction  and 
Development  on  making  Community  funds  available  to  the  International  Decommissioning 
Support  Fund  shall  provide  for  appropriate  measures  to  protect  the  financial  interests  of  the 
Community  against  fraud,  corruption  and  other  irregularities,  and  to  enable  the  Commission, 
OLAF and the Court of Auditors to carry out on-the-spot checks. 

13 

OJ L 292, 15.11.1996, p. 2. 

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21 

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8. DETAILS OF RESOURCES 

8.1. Objectives of the proposal in terms of their financial cost 

Commitment appropriations in EUR million (to 3 decimal places) 

Year n 

Year n+1 

Year n+2 

Year n+3 

Year n+4 

Year n+5 and 
later 

TOTAL 

Outputs 

Outputs 

Outputs 

Tota
l 
cost 

75 

Tota
l 
cost 

75 

Tota
l 
cost 

75 

Outputs 

Outputs 

Outputs 

Tota
l 
cost 

75 

Tota
l 
cost 

0 

Outputs 

Tota
l 
cost 

0 

Tota
l 
cost 

300 

(Headings 
of 
objectives,  actions 
and outputs should 
be provided) 

Type 
of 
output 

Aver
age 
cost 

OPERATIONAL 
OBJECTIVE 114 

KOZLODUY 

Action 1…. 

Output 1 

Output 2 

Action 2…. 

Output 1 

Sub-total  Objective 
1 

OPERATIONAL 
OBJECTIVE 2… 

Action 1…. 

Output 1 

Sub-total  Objective 
2 

14 

As described in Section 5.3. 

EN 

22 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
OPERATIONAL 
OBJECTIVE No.n 

Sub-total  Objective 
n 

TOTAL COST 

75 

75 

75 

75 

0 

0 

300 

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23 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8.2. Administrative expenditure 

8.2.1. Number and type of human resources 

Types of post 

Staff to be assigned to management of the action using existing and/or additional 
resources (number of posts/FTE) 

Year n 

Year n+1 

Year n+2 

Year n+3 

Year n+4 

Year n+5 

Officials or 
temporary 
staff15 (XX 01 
01) 

2 

A*/
AD 

2 

2 

2 

0.5 

0.5 

0.5 

0.5 

B*, 
C*/
AST 

0 

0 

0 

0 

Staff financed16 by Art. 
XX 01 02 

Other  staff  financed17 
by Art. XX 01 04/05 

TOTAL 

2.5 

2.5 

2.5 

2.5 

0 

0 

8.2.2. Description of tasks deriving from the action 

Annual programming 

Regular monitoring 

8.2.3. Sources of human resources (statutory) 

(When more than one source is stated, please indicate the number of posts originating from each 
of the sources). 

Posts  currently  allocated  to  the  management  of  the  programme  to  be  replaced  or 

(cid:59) 
extended 

(cid:133) 

Posts pre-allocated within the APS/PDB exercise for year n 

(cid:59) 

Posts to be requested in the next APS/PDB procedure 

15 
16 
17 

Cost of which is NOT covered by the reference amount. 
Cost of which is NOT covered by the reference amount. 
Cost of which is included within the reference amount 

EN 

24 

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Posts  to  be  redeployed  using  existing  resources  within  the  managing  service 

(cid:133) 
(internal redeployment) 

Posts  required  for  year  n  although  not  foreseen  in  the  APS/PDB  exercise  of  the 

(cid:133) 
year in question 

EN 

25 

   EN 

 
8.2.4. Other administrative expenditure included in reference amount  

(XX 01 04/05 – Expenditure on administrative management) 

Year n 

Year 
n+1 

Year 
n+2 

Year 
n+3 

Year 
n+4 

Year n+5 
and later 

TOTAL 

EUR million (to 3 decimal places) 

Budget line 

(No and heading) 

Technical 

1. 
and 
administrative 
assistance 
(including related staff costs) 

 Executive agencies18 

Other 
administrative assistance 

technical 

and 

- intra muros  

- extra muros 

Total 
administrative assistance 

technical 

and 

8.2.5. Financial cost of human resources and associated costs not included in the reference 
amount 

EUR million (to 3 decimal places) 

Type of human resources 

Year n 

Year 
n+1 

Year 
n+2 

Year n+3  Year n+4 

Year n+5 

and later 

Officials  or  temporary  staff  (XX  01 
01) 

Staff  financed  by  Art.  XX  01  02 
(auxiliary, SNE, contract staff, etc.) 

(specify budget line) 

Total cost of human resources and 
associated costs (NOT included in 
the reference amount) 

0.305 

0.305 

0.305 

0.305 

0 

0 

0.305 

0.305 

0.305 

0.305 

0 

0 

18 

Reference  should  be  made  to  the  specific  legislative  financial  statement  for  the  Executive  Agency(ies) 
concerned. 

EN 

26 

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Calculation – Officials and Temporary agents 

Reference should be made to Point 8.2.1, if applicable 

2.5 fte * 122 000 = 305 000 

Calculation – Staff financed under Article XX 01 02 

Reference should be made to Point 8.2.1, if applicable 

8.2.6. Other administrative expenditure not included in reference amount 

EUR million (to three decimal places) 

Year 

Year n+1

Year 
n+2 

Year 
n+3 

Year 
n+4 

Year 
n+5 

TOTAL

n 

and 
later 

XX 01 02 11 01 – Missions 

0.0144 

0.0144 

0.0144 

0.0144 

0 

0 

0.058 

XX 01 02 11 02 – Meetings and conferences 

XX 01 02 11 03 - Committees19 

XX 01 02 11 04 – Studies & consultations 

XX 01 02 11 05 - Information systems 

2.  Total  other  management  expenditure 

(XX 01 02 11) 

3. Other expenditure of an administrative 
nature  (specify  including  reference  to 
budget line) 

Total  administrative  expenditure,  other 
than  human  resources  and  associated 
reference 
included 
costs 
amount) 

(NOT 

in 

0.0144 

0.0144 

0.0144 

0.0144 

0 

0 

0.058 

Calculation - Other administrative expenditure not included in reference amount 

19 

Specify the type of committee and the group to which it belongs. 

EN 

27 

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4 missions per year for 2 people (EUR 1 000 per mission) 

2 missions per year to the EBRD for 4 people (EUR 800 per mission) 

Total EUR 14 400 

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28 

   EN