Project deals with upgrading, completing and commissioning the 3rd unit of the Kalinin NPP. The construction of unit 3 started in 1985 according to the original design for the Soviet VVER-1000 (model V-320). For the known deficiencies in this design, safety upgrades have been envisaged and will be implemented. As Kalinin-3 is currently 60% complete, the proposed projects present an opportunity to retrofit the existing design to meet internationally recognized safety objectives as applied to western plants of the same generation.
With a view to establish the eligibility of the project for a Euratom loan and to confirm the proper implementation of the project a financial analysis has been considered necessary.
(Source: Excerpt from Final Report Price Waterhouse Coopers Section “1.5 Conclusion”)
At the end of 1996 REA has negative net equity of US$ 636 Million as a result of significant un-funded decommissioning liabilities. Under all scenarios the company continues to make lasses, thereby increasing its negative equity substantially by 2020, to US $ 4 Billion under the Base Case. During the first part of the EURATOM loan, REA appears to have sufficient funds to meet interest and capital repayments, so long as targeted investment is cut back.
However, in the later years loan repayments could not be met in full without additional funding as a result of decommissioning and extension costs arising at this time. During the forecast period 20 years of the existing 25 units are due to be decommissioned.
Unless many billions of dollars are raised by REA, both through significant real increases in the tariff and external financing, for investment in new units, annual production will halve between 2010 and 2020.