Donors' conference in Berlin collects funds for Chornobyl (07/09/00)

Donors' conference in Berlin collects funds for Chornobyl

by Pavel Polityuk

KYIV - Ukraine has collected almost all the funds needed to finance repairs and rebuild the cover over the Chornobyl nuclear plant's destroyed reactor No. 4, Prime Minister Viktor Yuschenko said after the second international conference of donor countries that began in Berlin on July 5.

"We are satisfied by the results of the conference because we collected 35.5 million Euros," Mr. Yuschenko said. He added that together with donations from the first donors' conference, which took place in New York in 1998, a total of $715 million - more than 90 percent of the needed $768 million - has been collected.

Delegates from 37 countries, led by the leading industrialized nations and the European Union, pledged enough funds to start emergency work on the steel-latticed concrete sarcophagus, which might be completed by 2005.

U.S. representatives committed their country to contributing $80 million, while the European Commission pledged 100 million euros, Germany will give $25.6 million, Japan $225 million, the United Kingdom $18.36 million and Canada $13 million.

But experts have estimated that the measures linked to Chornobyl's closure, which include completion of two nuclear reactors at two Ukrainian plants and social guarantees for Chornobyl workers, would cost more than $2 billion.

"We have already fulfilled all conditions made by the G-7 and have to expect good results from the conference," Mr. Yuschenko told journalists before the meeting. He noted that Ukraine's political decision to shut down its troubled Chornobyl nuclear power plant on December 15 of this year has become the key event in many years of talks between Ukraine and the Group of Seven.

President Leonid Kuchma had announced last month that the only working reactor at Chornobyl would shut down in December and urged the West to come through with economic and political assistance.

"Now it looks like the problem of the shelter (covering Chornobyl's fourth reactor) is resolved," Prime Minister Yuschenko said. "But next on the agenda is the issue of construction of compensatory units [at other plants] and finding the funds for it."

The European Bank for Reconstruction and Development, which runs the Chornobyl Shelter Fund, has said the new sum is sufficient to begin an international tender for the construction of a new shelter around the ruined reactor, but gave no further details.

Experts estimate that, depending on the season, Chornobyl accounts for 6 to 8 percent of Ukraine's electricity output, which has been halved since independence in 1991. Fourteen years after the accident at Chornobyl, Ukraine continues to rely heavily on nuclear energy to generate up to half of its power supply.

According to the memorandum signed in 1995 by Ukraine and the G-7, Kyiv promised to close Chornobyl in return for Western assistance - especially funds to complete construction of two new reactors at the Rivne and Khmelnytskyi nuclear plants in the western part of the country.

After his meeting with the EBRD, Mr. Yuschenko said both parties had almost agreed on the terms of setting a special international fund that would be charged with financing the Rivne and Khmelnytskyi projects. The prime minister said the main points of the future plan will be submitted to the bank in August or September, and that the fund would include money from the EBRD, Ukraine, commercial bank loans and from other sources.

Ukrainian officials also say the EBRD has confirmed participation in the project, which may cost from $700 million to $1.4 billion.

Earlier this year EBRD said it was considering a loan of $180 million to $190 million for the projects, on the condition it reached agreements with Ukraine on reform in the country's electricity market.

Last month EBRD chief Charles Frank said Ukraine and the bank expected to reach final agreement on all the main points of Ukrainian energy sector reform within the next few weeks. The EBRD has repeatedly said it cannot make decision on financing until Ukraine implements a series of radical steps to reform its energy sector, including large-scale privatization and improving the payment system. The bank is worried that the former-Soviet state will not be able to repay the loan unless the current payment system is radically overhauled.

But since then the Verkhovna Rada has backed a government initiative to introduce special accounts, whereby all payments for electricity would be accumulated and the funds transferred to producers as well as distributing companies. The government said this would radically improve the payment system.

Experts say that Western aid may allow Ukraine to start operations at the second unit of the Kmelnytskyi power plant in 2002 and at Rivne's fourth reactor before 2004.

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