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The EBRD has approved a US$42mn loan to modernise and improve safety for two nuclear reactors in Ukraine: unit 2 at Khmelnitsky (K2) and unit 4 at Rivne (R4). The 1,000MW reactors are being built by Energoatom, Ukraine’s state-owned nuclear power-generating company.

As Ukraine completes construction of the units, it has requested that the EBRD and the European Community help finance post start-up safety and modernisation measures. In addition to the EBRD’s US$42mn, the EC plans to lend a further US$83mn.

The focus of the project is nuclear safety. Key conditions for the loan include:



  • Achievement of previously agreed nuclear safety levels before start-up;

  • Completion of the safety and modernisation programme, ensuring that the units reach an internationally accepted safety level;

  • Steps to ensure the safety of all nuclear units in Ukraine, including raising sufficient funds (based on an agreed tariff-setting methodology) for:

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    – Safety upgrades of the 13 existing nuclear power units in Ukraine, using K2 and R4 as benchmarks;
    – An internationally agreed nuclear liability and insurance regime;
    – A decommissioning fund.



  • Steps to safeguard the independence of the State Nuclear Regulatory Committee of Ukraine.

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    The EBRD and the EC had earlier contemplated financing the completion and pre start-up modernisation of the two units as part of the G-7’s support for the decision of Ukraine to close Chernobyl. This financing is no longer under consideration because the VVR1000 units are expected to be completed this year by Energoatom itself.

    Improvements to Ukraine’s electricity market have already been obtained largely as a result of intensive policy dialogue on the K2R4 issue since 1995 between the Ukrainian authorities and the EBRD, EC and others.

    For example, Energoatom is applying more transparent procedures for collecting bills and now raises sufficient cash for full recovery of its operating costs. Moreover, the portion of electricity bills collected in the form of cash rather than barter has risen more than tenfold to nearly 100%.