At a donor conference in Berlin on July 4-5, Ukraine succeeded in raising some US$320 million from forty Western nations, funding which will go to reconstruct the sarcophagus of Chornobyl’s nuclear reactor Number 4, which exploded in 1986. Ukraine estimates this cost at US$768 million. At a similar conference in New York in 1997, Western nations had pledged US$395 million for the project, and after last week’s Berlin conference the Chernobyl Shelter Fund now has US$715 million, some US$53 million short of the target. Kyiv hopes to raise that amount at a yet unspecified third donor conference.
Because the potentially leaky temporary sarcophagus is a danger not only to Ukraine, but also to much of Europe, cash-strapped Kyiv thought it legitimate in the early 1990s to call on richer nations to finance its reconstruction. The West has been pushing Ukraine to close Chornobyl’s only remaining operational power unit (Number 3), an old Soviet-design type which does not correspond to international safety standards. In the 1995 Ottawa Memorandum, leading Western nations pledged US$3 billion in return for Kyiv’s promise to shut down the nuclear plant by 2000. It was supposed that over half of this amount would be channeled to the construction of power generation capacities to compensate for the loss of Chernobyl, which generates 5-7 percent of Ukraine’s electricity. This has proved the main stumbling block to loan negotiations. Kyiv believes that the West should assist in the completion of two new nuclear power units near the western Ukrainian cities of Khmelnytsky and Rivne (K2R4). Washington agrees. Europe is reluctant. Germany, whose ruling Green-Social Democratic coalition opposes nuclear power on principle, is the primary dissenting voice. It refuses to finance K2R4, arguing that Ukraine should opt for thermal power. Ukraine finds this condition hard to swallow because, first, the K2R4 units are very close (more than 80 percent) to ready and, second, it is not clear where and at what price Ukraine would lay hand the necessary organic fuel for new thermal facilities. Ukraine’s natural resources are scanty, and Kyiv finds it difficult to finance organic fuel imports for the existing facilities. Nuclear fuel is cheaper, Kyiv argues.
Ukraine needs money for both the Chornobyl Shelter and K2R4, but German Vice Chancellor Joschka Fischer, who co-chaired the conference, reportedly made it explicit that K2R4 would not be discussed in Berlin. Ukrainian Premier Viktor Yushchenko, who co-chaired the conference, had to agree. Ukraine emerges from Berlin conference with mixed feelings. On the one hand, considerable funds were raised for the Shelter, and Yushchenko officially expressed satisfaction with the conference results. On the other hand, it remains unclear how the Chornobyl power will be compensated after the plant is closed on December 15, 2000, which Ukrainian President Leonid Kuchma pledged last month. The national power grid, undermined by mismanagement and poverty, was on the verge of collapse on several occasions last winter due to lack of generating capacities (Den, June 24; UNIAN, UT-1, July 5; AP, July 6; Ukraina Moloda, July 7; see the Monitor, June 12).
UKRAINE SET TO CLEAN UP ITS GAS DISTRIBUTION MARKET.