ENVIRONMENT/UKRAINE: Closure of Chernobyl By 2000 ‘Unlikely’

By IPS Correspondents Reprint | | Print |

Andrei Ivanov and Judith Perera

MOSCOW, Jan 9 1996 (IPS) - Although Ukraine has finally agreed to the closure of Chernobyl, no new money is on the table to help to finance this, Ukrainian officials say — making Western wishes to see it closed by the end of the century almost impossible.

After seven years of protracted and sometimes strained negotiations, Ukraine on signed a Dec. 20 pact with the Group of Seven (G-7) most developed nations and the European Union on the closure of the Chernobyl nuclear power plant, scene in 1986 of the world’s most serious nuclear disaster to date.

With Canada holding the chairmanship of the G-7, the agreement was signed in Ottawa by Ukrainian Economics Minister Yuri Kostenko and Canadian Deputy Prime Minister and Environment Minister Sheila Copps.

“The closure of Chernobyl will be an important step toward improving nuclear safety, not only in Central and Eastern Europe, but throughout the entire world as well,” noted Copps at the time.

Kostenko said that although the document was not legally binding, it was a first step towards a new partnership with the G-7 countries — Britain, Canada, France, Germany, Italy, Japan, and the United States.

The final compromise text of a Memorandum of Understanding (MOU) had been thrashed out in Vienna at the end of November. Ukrainian patience had been wearing thin at what they saw as G-7 indecision and lack of commitment. It was approved by the Ukrainian parliament on Dec. 15.

The main stumbling blocks, say sources close to the talks, were the date of closure and the extent of Western financial support. Ukraine is still deeply dependent on Chernobyl for its power needs and wants more investment in alternative power supply systems.

Some concessions have been made on timing to Ukraine which objected to the target date of 2000, but there has been no increase in Western aid. Ukrainian officials said privately that they had felt pressured to sign in the end because of threats to withhold all loans for Ukraine’s economic restructuring.

In November, for instance, an European Union (EU) loan package worth 85 million ECU (109 million dollars) was arranged to supplement Ukraine’s hard currency reserves and support its balance of payments.

But even before the final text was agreed, President Leonid Kuchma and Prime Minister Yevhen Marchuk had insisted that the offer of just over two billion dollars in loans and grants by the G-7 powers was insufficient to shut down Chernobyl by 2000.

Kuchma said the offer, made during talks in Kiev in November, was inadequate to cover the construction of a new sarcophagus around the ruined fourth reactor. Marchuk said if the West did not come up with four billion dollars, Ukraine would proceed with modernisation of the two operating reactors (1 and 3) at the plant. Reactor 4 was destroyed in the 1986 accident and Reactor 2 was closed in 1991 following a fire.

In the event, however, the total on offer is only 2.307 billion dollars, of which 1.809 billion is in loans. The figure is simply what had already been agreed at various previous meetings and no new funding has been made available.

“Ukraine was able to sign it only because the final wording is sufficiently vague to allow various interpretations,” an official involved in the talks explained, adding that “as far as Ukraine is concerned progress will depend entirely on whether the money is forthcoming”.

Another source close to the talks describes the MOU as “no more than an expression of good will and intent on the part of the West which is deliberately ambiguous and makes it possible for both sides to claim victory”.

The draft text was entitled ‘Memorandum of Understanding between the Governments of the G-7 Countries and the Commission of the European Communities and the Government of Ukraine on the Closure of the Chernobyl Nuclear Power Plant by the Year 2000’.

Ukraine objected to the date which has been omitted from the title in the final version, although it still appears once in the text.

However the addition of a new paragraph provides a certain flexibility by talking of decommissioning within the “shortest practically achievable time”.

The G-7 had been unwilling to agree to Ukraine’s demand for a commitment to “pay compensation” for early closure, but the final version contains a new paragraph on the “need to mobilise financial resources from the international community and domestic sources” and to “facilitate the flow of international financial resources”.

The other major difference between the two versions is the dropping of a demand that Ukraine should contribute 895 million dollars to the closure. The final text simply notes that “Ukrainian in-kind and financial contributions will be defined as projects are developed”.

An attachment at the end of the MOU gives a breakdown of this finance. The 498 million dollars in grants comprises 43 million for power sector restructuring, 102 million for an energy investment programme, 349 million dollars for nuclear safety and four million for a social impact plan.

The energy investment programme is also to get loans, include the 400 million ECU (512 million dollars) from the European Atomic Energy Community (Euratom) already agreed in 1994. This programme includes completion of two half-built reactors at Khmelnitsky (Unit 2) and Rovno (Unit 4) as well as modernisation of conventional and hydroelectric plants, some pumped storage projects and improvements in energy efficiency.

The nuclear safety component is thought to include 137 million ECU (175.5 million dollars) already allocated from the European TACIS funding programme for the former Soviet Union as well as 200 million dollars from the European Bank of Reconstruction and Development (EBRD) administered Nuclear Safety Account.

The guiding principle of the MOU, say the donors, is that revenue- generating projects will be considered for loans and non-revenue- generating projects for grants.

But Kostenko confirms that by 2000 all that will be possible is reactor shutdown. “Removal of the facility and ensuring its ecological safety will take over a decade,” he says.

“Agreements should be signed with every G-7 member obliging it to help Ukraine after 2000. If Ukraine remains alone, it will have to do as its economic and financial circumstances dictate.”