Archive for April 12th, 2010

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Russian $6 Billion loan for nuclear reactors a possibility

April 12, 2010

MOSCOW, April 10 (Reuters) – Russia’s Prime Minister Vladimir Putin said on Saturday Russia may lend $5-6 billion to Ukraine to construct two nuclear reactors, while promising to think about a new deal on gas supply prices.

“We discussed co-operation on nuclear energy… a possibility is to lend $5-6 billion to construct the third and fourth reactors for Khmelnitsky Nuclear Power Station,” Putin said after the meeting with Ukraine’s Prime Minister Mykola Azarov at Moscow’s Vnukovo Airport.

Regarding the gas issue Putin said the Ukrainian proposals were interesting.

“I admit we can achieve a solution, to a large extent it is a matter of calculation… it needs to be worked out. We should think and wait,” Putin said.

Putting the usual “what’s in it for Russia?” question aside dear readers, as is the usual knee-jerk reaction from the anti-Russian eliment, and of course there will be something in it for Russia, we should be asking does this benefit Ukraine and if so how much?

Of course it will ease the relience on Russian gas to produce energy, and there is not necessarily a construction bonus from building the reactors themselves either as far as Russia is concerned…….however, dealing with the toxic waste will be a long term and very profitable project…..particularly as Russia has radiation waste contracts with many nations such as Iran and the USA already. 

In fact repayment of the lone over whatever period of time, plus the toxic waste contract would be a worthy investment as far as Russia is concerned whilst making Ukrainian energy far more environmentally friendly……particularly if the waste is shipped off to Russia.

It is one less toxic substance to be less than carefully dealt with by the Ukrainian authorities after all.  The record of toxic leaks, emissions and dumping in Ukraine by industry is truly beyond comprehension.  (No citation needed, I have been involved in the occasional project with the Environment Ministry here, I write from personal knowledge.)

To be quite frank, there is an aweful lot which can be done in Ukraine with regards to CHP plants, upgrading 30 and 40 year old technology (if 30 or 40 years old even counts as technology rather than artifact), renewables being allowed access into the grid to sell excess energy etc etc……..don’t get me started……..not that I am a raving Green, I am just a humble civil engineer…….but the waste of energy and commodities used to produce that energy is immense.

Depending upon the timespan of any loan repayment, I can certainly see a way to repay it within the energy industry itself……..but can’t say much more than this as it is something I am working on behind the scenes for certain people in the hot seats in Kyiv and I am not sure where the dividends of this work will be offset when it comes to the multitude of debts and loans.

Is being on the hook to Russia for $6 Billion for a period of time worth the environmental savings in use and misuse of raw materials and polutants as well as being more economical to produce?

The answer long term is probably “yes” given that Ukrainian industry uses huge amounts of energy due to antiquated machinery, but without the figures behind it, really only those behind the scheme will know the answer.

In the short term any loan will sound the alarm to all those who view all things Russian as a poisoned challace, although borrowing from the IMF, World Bank, EBRD, EU and money markets by way of government bonds (which may be bought by Russia) of course is only right and proper given the situation Ukraine is in.

The devil is in the detail of course……..and we do not know the detail……..if the loan is even made.

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