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Export credit agencies prop up nuclear industry

Nuclear Monitor Issue: 

(June 29, 2001) The United States and other industrialized nations are propping up the sagging nuclear power industry through use of their Export Credit Agencies (ECAs), such as the US Export-Import Bank (ExIm), despite what amounts to a rejection of the technology in these same nations, according to a new report released in the U.S. on 25 June 2001 by the Nuclear Information and Resource Service (NIRS).

(551.5294) NIRS - The report, written by environmental groups and researchers across the world, highlights the growing problem of ECA and International Financial Institutions (IFI) support for nuclear power. At the Genoa G8 Summit in July, world leaders will discuss environmental reform of ECAs. The authoring groups are highlighting the problems that financing nuclear power projects can bring.

The report carefully documents how approximately US$10 billion in credit guarantees have been awarded by the ECAs of the G8 to support current nuclear projects globally. The main recipient of this assistance is China, with seven of the eight countries supporting nuclear development there. In addition, the completion of partly build reactors in Eastern Europe and the former Soviet Union is a target for nuclear constructors and the subsequent financial support from governments.

The use of ECAs is used not only to support domestic industries but also political objectives. In Ukraine, ECAs are proposing to support the completion of two reactors in Ukraine (Khmelnitsky 2 and Rovno 4, or K2/R4), despite the country's poor nuclear safety record and economic performance. This performance has led to other projects in Ukraine that were seeking ECA assistance being abandoned. These funds were made on the basis of a political agreement in 1995 and not on current day reality or need.

The European Commission is also becoming increasingly active in its financial support for nuclear power, with two loans approved in 2000, the first for over a decade and the first outside Member States of the EU. As a result of these loans the European Commission is preparing a proposal to expand its lending capabilities inside and outside the Union.

Globally nuclear power is on the decline; it has been rejected by the public and the majority of electric utilities. The abandonment of nuclear power is due to increased transparency of costs and more information about the environmental and social costs of nuclear technology. Because of this the nuclear constructors are desperately seeking new markets to save their manufacturing capabilities. The companies are using ECAs to support their export bids, which are mostly clouded in secrecy, without clear public or parliamentary scrutiny. If similar scrutiny were to be made on reactor exports as for domestic construction in most G8 countries, this trade would stop.

In Genoa, the G8 will review the environmental record of ECAs and propose new environmental guidelines. These new guidelines must expose the full environmental and social impacts of all projects.

"Nuclear power has been largely rejected across the World. Countries in the G8 are now exporting more reactors than they are constructing in their own countries," said Antony Froggatt, co-author of the report. "ECAs are an essential part of the export of redundant nuclear technology. The ECAs lack of transparency aids this process; it is time for ECAs to be subjected to the same democratic scrutiny as other financial institutions and domestic constructions."

"The U.S. Export-Import Bank is in the process of revising its nuclear funding guidelines," said Michael Mariotte, executive director of NIRS. "As a first step, ExIm should forbid funding of unsafe Russian-designed reactors like K2/R4. As the next step, ExIm should stop funding nuclear projects entirely, and use its limited resources to support environmentally sound energy sources." Mariotte noted that ExIm so far is refusing to fund K2/R4 because of Ukraine's poor financial position, and said that NIRS encourages the bank to continue to reject funding for this project on both environmental and economic grounds.

[The report, Financing Disaster, How the G8 is Supporting the Global Proliferation of Nuclear Technology was prepared by NGOs and Environmental Specialists in the G8 Countries, including: Sierra Club of Canada; Amis de la Terra (France); Urgewald (Germany); An Eye on Sace (Italy); Citizen's Nuclear Information Centre (Japan); ECODEFENSE (Russia); EU Enlargement Watch (UK); NIRS (US).
The full report is available on the Web at Paper copies of the executive summary are available free to media and environmental organizations from NIRS. Paper copies of the full 150-page report are US$15.00.]

Source and contact: Nuclear Information and Resource Service, 1424 16th Street NW, Washington, DC 20036, US
Tel: +1 202 328 0002;Fax +1 202 462 2183

Or: Antony Froggatt, +44 20 7923 0412