Ukraine's nuclear expansion plans under fire from UN body, EBRD 'safety loan' called into question again

In a landmark ruling laid out in a March 25 letter (pdf) to the Ukrainian Ministry of Environmental Protection, the Implementation Commission of the United Nations Espoo Convention has deemed that Ukraine’s plans to expand the lifetime of its old nuclear reactors is in breach of the convention – the same convention that Ukraine ratified in 1999. Ukrainian campaigners believe that this should lead the EBRD to halt the disbursement of a EUR 300 million ‘nuclear safety’ loan agreed with Ukraine’s state nuclear operator just days prior to the issuing of the Espoo verdict.

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According to the Espoo Implementation Commission, the Ukrainian authorities have proceeded with the life extension programme first of all without the preparation of an environmental impact assessment (EIA). Such an assessment, commonly used in major infrastructure projects, would weigh the likely project risks and provide guidance on how to mitigate these risks. This verdict has confirmed that nuclear power plant lifetime extension programmes, not only the construction of new plants, should be the subject of an EIA. The absence of such an assessment is shocking given the high risks involved in the nuclear industry.

The Espoo Commission has also raised with Ukraine its failure to consult the extension programme’s potential transboundary impacts, as well as alternatives, with neighbouring countries. This is a fundamental requirement of the Espoo procedures, and again Ukraine has been found wanting.

Ukraine's nuclear extension plans and Europe's complicity

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Just prior to having its knuckles wrapped by the Espoo Implementation Commission, the first time that the UN body has reacted in such a way following an NGO complaint (from the Ukrainian environment group Ecoclub Rivne), Ukraine had received notification that the EBRD had decided – after months of delay – to extend a 300 million euro loan to Energoatom, the Ukrainian nuclear operator. As part of the deal, a further EUR 300 million is scheduled to come from Euratom, the European Atomic Energy Community, which is still to make a final decision on this loan in the next few months.

In its national Energy Strategy, Ukraine envisages prolonging the lifetime of 12 old nuclear reactors. The Ukrainian authorities have already renewed licences for two units (Rivne 1 and Rivne 2) and are close to prolonging the functioning of a third reactor, the South Ukrainian Unit 1. Yet these ageing reactors had been due to see their operational licences expire by 2012.

In the lead up to the EBRD loan decision, a range of national and international environment groups (including Bankwatch, Greenpeace CEE and Friends of the Earth Europe) challenged the bank’s ‘safety’ narrative, mindful that the EBRD is not mandated to finance nuclear expansion projects. The groups cited an expert analysis published last year that spells out how some technical measures to be financed from these international loans would only be required if the lifetime of the reactors was to be expanded.

Iryna Holovko, Bankwatch’s energy campaigner in Ukraine, believes that the intervention from the Espoo Implementation Commission cannot be overlooked by the EBRD. “If, as it claims, the EBRD is solely focused on nuclear safety in Ukraine, it must react to the Espoo Convention breaches as an upstanding, responsible international investor,” she commented.

Ukrainian and international environment groups are calling on the EBRD to halt the disbursement of its loan and condition any payments to Ukraine’s obligatory compliance with the Espoo requirements – namely, the preparation of environmental impact assessment reports for all units under preparation for extension and consultation with neighbouring states.

In an unrelated matter, following the granting of the EBRD loan in March, a request from Bankwatch’s Ukrainian member group NECU for disclosure of the EBRD’s project documentation resulted in the bank’s partial release – via email – of the ‘safety upgrade’ loan documentation. Notably missing, however, were key sections of the EBRD board document outlining the project’s rationale, the terms and conditions of the loan and information on Energoatom’s financial status.

NECU has appealed to the EBRD for full disclosure of the project documents. At the time of going to press, a formal request from NECU to receive the missing documentation was still pending with the EBRD's legal department.

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Background information on the Ukrainian nuclear power plant Safety Upgrade Programme is available at:
http://bankwatch.org/our-work/projects/nuclear-power-plant-safety-upgrad...