U.S. grant to support thermal power plant in Ukraine (02/13/00)

U.S. grant to support thermal power plant in Ukraine

by Roman Woronowycz
Kyiv Press Bureau

KYIV - U.S. Energy Secretary Bill Richardson announced in Kyiv on February 6 that Washington will grant Ukraine $22.5 million for the development of a thermal power plant that will help replace the energy provided by the Chornobyl nuclear facility, and will provide substantial financial assistance to assure the closure of the facility by the end of the year.

Although President Leonid Kuchma had promised in 1995 to shut the ill-fated Chornobyl plant by the beginning of this year, he has withheld action while demanding that the Group of Seven industrialized states follow through on their pledge to fund alternative energy sources, which the beleaguered Ukrainian economy can't afford. The new heat replacement plant will contribute substantially to replacing energy lost due to Chornobyl's shutdown.

President Kuchma, who met with Mr. Richardson on February 5, said Ukraine has already budgeted the equivalent of $7.5 million for such a thermal energy plant, and stated that if the plans now being laid are realized, the Chornobyl plant could go off line for good by the end of the year. He said that a specific date would be set later. Mr. Richardson said the United States will now work closely with Ukraine to meet its new obligation.

"[The $7.5 million,] combined with the $22.5 million contribution from the United States, will help ensure the safe shutdown of Unit 3, and the permanent closure and decommissioning of reactors and the completion of the shelter over destroyed Unit 4," said Mr. Richardson.

The U.S. energy secretary presented plans for projects that make it more plausible than ever that the site of the world's worst nuclear accident in 1986 will indeed be closed once and for all.

First and foremost, a scheduled second pledging conference to raise funds for the completion of the sarcophagus over Chornobyl's stricken reactor, sponsored by Germany and Ukraine and scheduled for May of this year in Berlin, should provide the additional financing to meet Ukraine's requirements for shutting down the plant. Mr. Richardson said the goal is to raise $700 million in additional funds, adding that the United States would "make a significant pledge."

The United States will also provide $850,000 to help Ukraine's industries improve energy efficiency. A recent study by the European Commission put Ukraine at the bottom of the list of efficient energy consumers. The study determined that most of Ukraine's energy sector is wasteful and inefficient.

The goal of the program, as Mr. Richardson explained, is to develop more than $100 million in private financing for Ukraine's "most promising enterprises."

The United States and Ukraine are also in the process of developing a project to increase the effectiveness of power engineering, which, if successful, would lead to a World Bank loan of $18 million for its implementation.

Another joint effort in the energy field is aimed at diversifying Ukraine's nuclear fuel supplies. Today Ukraine is entirely dependent on Russia for nuclear fuel rods. For Ukraine, diversification would not only mean less reliance on a neighboring country, but cheaper prices as well.

"If Ukraine has more than one supplier of nuclear fuel, its cost will be lower," explained U.S. Ambassador to Ukraine Steven Pifer, during a press conference held by Secreatry Richardson at the Kyiv Institute of Nuclear Research, where the United States has developed a nuclear fuel-control training center.

The two sides also discussed the Odesa-Brody oil pipeline, which Ukraine is pushing as an alternate route for Caspian Sea oil. The United States currently is supporting an effort to move the oil through Turkey, but Mr. Richardson said that a Euro-Caucasian transport corridor also is a possibility. He said the Gold State Engineering Company of the United States is now conducting a $1 million feasibility study on the construction of an Odesa-Brody pipeline, according to Interfax-Ukraine.

Overall, Mr. Richardson said he was pleased with his trip to Kyiv and satisfied with the government's strong move toward implementation of economic reforms since the beginning of the year and its plans to further privatize the energy sector and make it more efficient.

"I can report back to President [Bill] Clinton and Vice-President [Al] Gore that Ukraine is making progress and is on the right track," said Mr. Richardson.

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