The never-ending story: EBRD restart talks on K2/R4

Nuclear Monitor Issue: 

(April 25, 2003) After announcing in September to consider loans to Ukraine to complete the power generating units at the Rivne and Khmelnitsky nuclear power stations (K2/R4), the European Bank for Reconstruction and Development (EBRD) and its president Jean Lemierre have agreed to submit a financing project that incorporates Ukraine's proposals to the EBRD board (1).

(586.5508) NIRS/WISE Ukraine - The conditions that President Lemierre has decided to ease financing, include requirements that Ukraine increase its tariffs on nuclear energy, impose new nuclear regulations in the country, establish an independent safety body, and reform the electricity industry. Talks are set to restart in the summer of this year. The previous project cost of US$ 1.48 billion is also expected to be reduced (2). The Ukrainian government is hoping to bring that figure down to US$ 1.26 billion (3).

Ukraine had rejected a loan worth US$ 215 million from EBRD in 2001, (see WISE News Communique 559.5345: "Ukraine withdraws EBRD loan application for K2/R4") and indicated it would look for support from Russian instead.

Environmentalists have voiced concern over the use of Russian help to complete the K2/R4 units, basing their concern over the 1986 meltdown of the Soviet-designed RMBK reactor number 4 at Chernobyl. Russia has passed legislation for this year to give US$ 44 million toward the completion K2/R4, yet the money has been slow in coming and environmentalists suspect that it will not be enough to complete the project without the EBRD.

According to Yury Urbansky from the National Ecological Centre of Ukraine, "K2/R4 cannot be made safe since they are old design reactors, there are serious concerns regarding economic justification of the project, and public opinion in Ukraine does not support the increase of the nuclear energy use".

Also in February this year, the EU signed an agreement worth Hr 5,200,000 (US$ 1.01 million), aimed at assessing the progress made on the Khmelnitsky plant by means of a thorough on-site review (4). Another agreement providing a blueprint for shutting down nuclear plants and opening a decommissioning fund received funding by the EU to the amount of 600,000 Hr (US$ 117,000) (5).


Victims and survivors of the Chernobyl disaster marched in central Kiev on 19 April to demand an increase in social service benefits and compensation for medical and emotional losses. According to press reports, 5000 people were in attendance at the rally.

At the same time, the nearly bankrupt state-run nuclear monopoly Energoatom inhabits a luxurious office building in downtown Kiev while failing to implement urgent safety and maintenance works at 13 nuclear reactors under its control, declaring a shortage of cash (6).

Energoatom's supervisory board has asked Ukraine's cabinet of ministers to sanction the utility, saying management had not fulfilled its program of modernizing nuclear power plants. Tatyana Amosova, a member of the board and assistant to the first deputy prime minister, said only 13%-15% of planned safety measures were funded and expenditures only reached that level because of purchase of new equipment."

Furthermore, board president and MP Andrey Derkach is reported to have said, "Energoatom still hasn't resolved the issue of insurance against third-party liability, a requirement for getting nuclear plant operating licenses." He said that as long as the licenses weren't fulfilled, "...Energoatom is operating as an outlaw company with no responsibility for nuclear risks" (7).

Energoatom disputes the extent of the lapses in implementing safety measures, but still admits only a 66% completion of a modernization plan last year, and a US$49 million deficit in what is needed for safety and modernization in 2003, out of a total US$ 158 million (8).

K2R4 Plaintiffs Harassed
In a related incident, law students who submitted a legal challenge against the Energoatom have reported that they have been threatened and harassed for their opposition to K2/R4 completion. Alexei Tolkachov, a representative for the group, was phoned by an anonymous caller who said that, "if students think that they live in a tank and are not afraid of bullets from machine guns, then they should continue struggling".

An unknown person was also seen at the students' dormitory claiming he wanted to persuade the students to withdraw their case (9).

Harrasments of anti-nuclear activists are not new. In the past ten years of negotiations on K2/R4 many cases of illegal pressure and threats have become publicly known. Environmental activist think much more happens but most people do not dare to speak out.

K2/R4 Opposition Plans
"EBRD must clearly say "NO!" to nuclear development in the Ukraine and the entire region. The country has an immense potential to improve efficiency of energy production and consumption and this is where money should be spent first of all," says Yury Yurbansky.

NIRS/WISE Ukraine and Ecoclub, in conjunction with CEE Bankwatch and the NGO Voice of Nation are expressing their opposition to the K2/R4 plans with a media campaign, energy tour, and increased activism in the coming weeks and months.


  1. Reuters, 7 April 2003
  2. Reuters, 7 April 2003
  3. Correspondence with Yury Yurbansky, 14 April 2003
  4. Financial Times, 16 February 2003
  5. Financial Times, 16 February 2003
  6. Correspondence with Yury Yurbansky, 14 April 2003
  7. Nucleonics Week, 17 April 2003
  8. Nucleonics Week, 17 April 2003
  9. Public Committee for National Safety of Ukraine press release, 11 April 2003

Contact: WISE/NIRS Ukraine