2009 Community Contribution to the EBRD for the Nuclear Safety Account

At the Munich Summit of the G7 in July 1992, it was decided to initiate a multilateral programme of activities to improve nuclear power plant safety in Eastern Europe. Complementary to this programme, in February 1993 the G7 officially proposed that the EBRD set up a Nuclear Safety Account (NSA), to receive contributions by donor countries to be used for funding nuclear safety improvement projects.

The purpose of the NSA was to provide grants for the preparation and implementation of projects designed to address immediate operational safety and technical safety improvement measures for nuclear reactors having the highest level of risk, namely the first generation nuclear power plants of Soviet design having VVER-440/230 and RBMK reactor types. The grants were intended to cover in particular the acquisition, installation and placing into operation of equipment to reduce the risk of accidents during the time remaining to their early closure. They were also intended to support projects for the construction of facilities for decommissioning these plants and to assist the regulatory authorities through additional reviews of safety analysis reports.

First EC contribution to the NSA

It was agreed that the Account would come into existence once at least four contributors had pledged to contribute at least 60 MECU (Note 1). The European Commission pledged 20 MECU as a first contribution to the Fund. By June 1994, the fund had pledged contributions from 13 countries totalling US$ 157 million. Participation was voluntary and was intended to complement existing bilateral programmes, in particular the EC's TACIS and PHARE programmes. The activities to be financed were to be decided by an Operating Committee, composed of contributors to the Account. Eventually 15 countries plus the European Community, contributed to the NSA. The first European Commission contribution of 20 MECU was paid from the TACIS and PHARE financial envelopes committed in 1993.

Projects financed by the fund for the purposes of addressing urgent safety issues at first generation Soviet-designed reactors were implemented at Ignalina (RBMK-1500) in Lithuania, Kozloduy (VVER-440/230) in Bulgaria and Kola (VVER-440/230), Leningrad (RBMK-1000) and Novovoronezh (VVER-440/179 [pre VVER-440/230]) in Russia.

In 1995, safety upgrade projects at Chernobyl NPP (units 1 – 3) were added to the scope of the Account in connection with the MoU between the European Community and Ukraine on the early closure of Chernobyl NPP. Later, the Account concentrated on the financing of projects for the construction of facilities required to support the decommissioning of the Chernobyl NPP. These were mainly:

Liquid Radioactive Waste Treatment Plant (LRTP): The LRTP is designed for the treatment of liquid radioactive waste accumulated on the ChNPP site and currently stored in the temporary storage tanks, as well as the waste that will be generated during the decommissioning of ChNPP Units 1, 2 and 3.

Interim Spent Fuel Storage Facility (ISF-2): The ISF-2 is a long term dry storage facility required for the safe storage of spent fuel from the Chernobyl reactors. Most of the existing spent fuel was stored in the original interim wet storage facility (ISF-1), constructed in Soviet times, which is not suitable for long term storage. Other spent fuel elements remained in storage ponds inside the reactor units 1, 2 and 3.

Second EC contribution to the NSA

By 2003, additional contributions to the NSA were required to complement the funds for the LRTP project in order to bring it to the start-up phase. The European Commission contributed €1.2 million through the TACIS 2003 programme. This was paid through a contribution agreement with the EBRD (Contract 125107: Project U4.06/03).

Third EC contribution to the NSA

Due to accumulated delays in the completion of the ISF‑2 and (partially) the LRTP and the consequent cost increases, the EBRD estimated a replenishment of the NSA to be necessary in 2009, at latest. A shortfall of € 169 million was established. This figure was eventually reduced to € 92 million, following the decision of the EBRD to devote € 77 million from its operational profits to financing some of the activities related to the completion of the ISF-2. Negotiations were carried out in the G8 context to establish the share of single contributors. An agreement was reached to base further contributions of the major donors to the NSA on the historical burden share among the contributors to both the NSA and the Chernobyl Shelter Fund. This resulted in a share of € 15 million for the European Community.

The above amount was hence pledged by the European Commission in July 2008, in a pledging event organised by the Japanese chair of the G8 in London, and confirmed in December 2008. It was paid through a contribution agreement with the EBRD (Contract 203254).

Notes

1. Million ECU. ECU - European Currency Unit, an artificial "basket" currency used as a unit of account in the European Community prior to the introduction of the Euro.

Links

Further information on the Nuclear Safety Account can be found at:

• https://www.ebrd.com/what-we-do/sectors/nuclear-safety/chernobyl-nuclear-safety-account.html
• https://www.ebrd.com/downloads/research/factsheets/nsae.pdf