Official: Russia planning financing of Ukraine reactors

May 18, 2010, 14:14 GMT

Kiev - Russia's government is considering the direct financing of two nuclear reactors in Ukraine, a senior Russian official said Tuesday.

Russia's state-owned Rosatom nuclear energy company would be the general contractor in the project, and Russian's national bank Sberbank is the likely financier, said German Gref, Sberbank director.

'We have been working on this project in recent months, and we hope to finalise these plans in the near future,' Gref told reporters at a Kiev press conference, according to Interfax.

Russia's Atomstroyexsport, a company of the state atomic energy corporation Rosatom that is responsible for foreign operations and construction, won a tender in February to install two nuclear reactors at Ukraine's Khmelnitsky atomic power station.

Sergei Kirilenko, Rosatom's director, said the cost of the Khmelnitsky project would require between 5 and 6 billion dollars of Russian government funds, to be provided by Sberbank.

Gref's and Kirilenko's Tuesday statements were the first official confirmation that Russia's Sberbank was the probable main financing agency for the Khmelnitsky project.

Were the Khmelnitsky project to run smoothly, Rosatom could participate in the reconstruction of some two dozen more ageing Ukrainian nuclear power reactors, Kirilenko said.

Gref's comments on possible Sberbank participation in the Khmelnitsky nuclear power project came during the second day of a two-day working visit to Kiev by Russian President Dmitry Medvedev.

On Tuesday, Medvedev gave a speech at a local university and chaired a session of a Russo-Ukrainian economic forum jointly with his Ukrainian counterpart, Viktor Yanukovych.

Yanukovych and Medvedev signed six agreements on Monday on foreign policy and technology exchange.

A supporter of closer relations with Russia, Yanukovych last month announced plans to upgrade and expand the country's nuclear power sector, with a goal of producing as much as 70 per cent of electricity in the former Soviet republic.

Site of the 1986 Chernobyl nuclear power accident, Ukraine is one of Europe's most enthusiastic users of nuclear energy, currently using reactors to produce slightly more than half its electricity, according to official statements.

Ukraine's opposition leaders have criticised the Yanukovych plan, saying it threatens the environment and would prevent the transfer of safer nuclear technology from Western Europe.

Yanukovych has defended the idea, saying Russia is a better and cheaper source for technology transfer and investment financing.