ANNEX 7
of the Commission Implementing Decision on the Annual Action Programme 2013 for
Nuclear Safety Cooperation to be financed from the general budget of the European
Union
Action Fiche for the European Union Contribution to the Chernobyl Shelter Fund
1.
IDENTIFICATION
Title/Number
CSF 2013 European Union Contribution to the Chernobyl
Shelter Fund
Total cost
Total estimated cost: EUR 25.105 million
Total amount of EU budget contribution
Instrument for Nuclear Safety Cooperation (INSC)
Aid method /
Method of
implementation
Project approach:
DAC-code
23064
joint management with the European Bank for Reconstruction
and Development (EBRD)
Sector
2.
RATIONALE & CONTEXT
2.1.
Summary of the action and its objectives
Nuclear Safety
This project is the last contribution to the Chernobyl Shelter Fund managed by the
EBRD.
2.2.
Context
Contributions to international donor funds, including the Chernobyl Shelter Fund
(CSF) and the Nuclear Safety Account (NSA), are foreseen as important components
of the Instrument for Nuclear Safety Cooperation.
The Chernobyl Shelter Fund (CSF) is an international fund managed by the
European Bank for Reconstruction and Development (EBRD). The Fund was created
for the realisation of the Shelter Implementation Plan (SIP1), which includes major
projects to remediate the consequences of the 1986 nuclear accident in Chernobyl.
Among these, the realisation of the New Safe Confinement (NSC) is the most
important. It is currently in the construction phase.
1
The SIP addresses the strategy and plan for the conversion of the existing Chernobyl shelter into a stable and
environmentally safe system. It was developed in 1997 by a group of Western and Ukrainian experts and financed
by the TACIS Program and the US Department of Energy. The SIP was approved and supported by Ukraine.
1
The SIP addresses the strategy and plan for the conversion of the existing Chernobyl
shelter into a stable and environmentally safe system. The SIP was developed in
1997 by a group of Western and Ukrainian experts and financed by the TACIS
Program and the US Department of Energy. Approved and supported by Ukraine, the
G7 and the EU, the SIP provided the roadmap to the implementation of remedial
activities and a basis for financial contributions for its implementation.
The CSF was established in 1997 and is managed by the EBRD on behalf of and
under the supervision of the Assembly of Contributors. Twenty-three countries and
the European Commission are represented in the Assembly. A framework agreement
between the EBRD and Ukraine was signed on 20 November 1997 and ratified by
the Ukrainian Parliament on 04.02.1998. A Joint Committee was created to manage
the project as well as an International Advisory Group (IAG).
The European Union is the largest contributor to the CSF. Its contribution amounts
to EUR345 million by the end of 2012 in fulfilment of the four pledges: EUR90.5
million (New York, November 1997), EUR100 million (Berlin, July 2000), EUR49.1
million (London, May 2005) and EUR122.105 million (Kiev, April 2011)2.
2.3.
Lessons learnt
Further to the conclusions of the Court of Auditors audit at the end of 2008, the
European Commission took an active role in creating the Chernobyl G8 Nuclear
Safety and Security Group (G8 NSSG) - EBRD Contact Group. The Group follows
and monitors the major developments with the Chernobyl projects and funding
needs, so that the major donors may take well informed decisions. This Group
became particularly important in view of the increasing complexity of the technical
and financial decisions to be taken during the design and construction phases of the
project as well as the funding requirements. The Contact Group has met regularly
since the end of 2009 and reports to the G8 NSSG.
In order to follow the Chernobyl projects it was further decided to put in place an
Independent Monitoring Consultant which will provide the Bank and subsequently
major donors with information and conclusions on key cost and schedule
independently from project implementation structures. In the initial stage of the
assignment the Consultant will also review the quality assurance arrangements in
place. The Consultant will start its activity during the first quarter of 2013 and will
be funded by Chernobyl Projects Monitoring Account, managed by the EBRD,
which is funded mainly by the Commission, on behalf of the EU, and the United
States.
2
At the Pledging Conference in Kiev on 19 April 2011 the Commission pledged €110 million on behalf of the
EU, according to a previous agreement with the G8 Members. However the total of the pledges by all the
donors fell some € 29 million below the €550 million target above which the EBRD would contribute €190
million to cover the totality of the €740 million shortfall of the Chernobyl Funds (CSF and NSA). In order to
definitely close the issue of underfunding of the Chernobyl projects and the G8 commitment, a number of G8
members and the Commission agreed to make complementary pledges. In accordance to the historical burden
share the Commission agreed to pledge an additional €12.105 million, as a result the 2011 Commission
Pledge amounted to €122.105 million in total.
2
2.4.
Complementary actions
The Fund financed the necessary research and engineering, infrastructure and
preparatory works to achieve the SIP objectives, as well as stabilisation measures
inside and outside the shelter to minimise the risk of the old structure collapsing,
these measures were successfully completed in 2008.
The detailed design for the New Safe Confinement is finalised and work on the
foundations is complete. Delivery of structural components for the arch started
during the first quarter of 2012 and the assembly work has progressed significantly.
Other activities at the Chernobyl site include the realisation of an Industrial Complex
for Solid Radioactive waste Management (ICSRM), which was financed under the
TACIS programme and will provide for treatment, conditioning and safe storage of
solid waste deriving from the realisation of the NSC. The completion of the ICSRM
was achieved in February 2009. The establishment of other ancillary radioactive
waste (radwaste) management facilities were funded under the TACIS programme
and the INSC.
A Liquid Radioactive waste Treatment Plant (LRTP) and an Interim Storage Facility
for spent fuel (ISF 2) are funded by the Nuclear Safety Account (NSA), another
multilateral fund, which is also managed by the EBRD. The LRTP is nearing
completion and construction phase under the contract with Holtec is underway.
The Commission presented a first progress report on the implementation of the CSF
in October 19993, a second report in September 20014, a third report in July 20045
and a fourth report in December 20076.
2.5.
Donor coordination
An Assembly of Contributors monitors the implementation of the CSF. The
Commission services are actively involved in the works of the Assembly, on behalf
of which the CSF is managed by the EBRD.
The G8 NSSG – EBRD Contact Group follows the implementation of the projects,
the financial situation and was instrumental in establishing the need for additional
funding and the organization of pledges.
For the technical aspects of the SIP, the EBRD is supported in fulfilling its role
effectively and in accordance with scientific standards by the International Advisory
Group (IAG), constituted of twelve experts who provide the highest level of
independent technical advice and consultancy.
3
4
5
6
COM(1999)470 of 12.10.1999
COM(2001)251 of 29.05.2001
COM(2004)481 of 14.05.2004
COM(2007)825 of 19.12.2007
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3.
DETAILED DESCRIPTION
3.1.
Objectives
The objective of the present action is to provide a further contribution of EUR 25.105
million to the Chernobyl Shelter Fund which will be the last instalment of the 2011
pledge. The EU's 2013 contribution was foreseen in the Multiannual Indicative
Programme for 2012-2013.
3.2.
Expected results and main activities
Delays due to the complexity of the project have been experienced. However, the
completion date of the NSC remains end of 2015. The present EU contribution is
necessary for the continued implementation of the projects funded by the CSF
according to the identified needs. The timely transfer of this contribution to the fund
will ensure continuity in project implementation with further funds being made
available by other donors.
3.3.
Risks and assumptions
The main risk for the completion of the SIP projects is the availability of sufficient
funds, as the contingency has eroded to a level which causes concern. The situation
was aggravated by considerable cost increases, particularly for items for which the
price could not be precisely defined at the time of the tender for the NSC (provisional
sums items), and delays in the approval of licensing packages. The 2011 pledges
covered the totality of the identified financial shortfall at the time; as such they
constitute the last round of pledges by the international community to the Chernobyl
funds. These risks are mitigated by the donor coordination that takes place in the
framework of an international fund managed by the European Bank for
Reconstruction and Development (EBRD). The Assembly of Contributors plays a
crucial role to monitor the timely implementation of the project. Other potential
risks to be taken into account include the timely licensing approval, the correct
performance of the NSC contractor and a stable institutional framework for the
project to be implemented according to the agreed revised cost and schedule.
3.4.
Cross-cutting issues
The project tasks will contribute to the overall improvement of the living conditions
of the population concerned, and to environmental sustainability. It will reduce the
current health and environmental risks resulting from the present situation in and
around Chenobyl.
3.5.
Stakeholders
The main stakeholders are the EBRD and the Assembly of Contributors. The
beneficiary of this Joint Project is the Ukrainian Government; the end-user is the
Chernobyl Nuclear Power Plant.
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4.
IMPLEMENTATION ISSUES
4.1.
Financing agreement
In order to implement this action, it is not foreseen to conclude a financing
agreement with the partner country.
4.2.
Indicative operational implementation period
The indicative operational implementation period of this action, during which the
activities described in sections 3.2 and 4.3 will be carried out, is 12 months, subject
to modifications to be agreed by the responsible authorising officer in the relevant
agreements.
4.3.
Implementation components and modules
4.3.1.
Joint management with an international organisation
This action with the objective of contributing to the Chernobyl Shelter Funds will be
implemented in joint management with the European Bank for Reconstruction and
Development for an amount of EUR 25.105 million. This implementation is justified
because the EBRD has been entrusted by the international community to manage the
necessary mitigation actions dealing with the consequences of the Chernobyl
accident. Joint management with this international organisation in accordance with
Article 53d of Financial Regulation 1605/2002 is possible because this action is a
multi-donor action pooling funds of several donors which are not earmarked for
specific expenditure.
This organisation is currently undergoing the four-pillar assessment in accordance
with Article 53d of the Financial Regulation No 1605/2002. In anticipation of the
results of this review, the authorising officer deems that, based on a preliminary
evaluation and on the long-standing and problem-free cooperation with this
organisation, it can be entrusted with budget-implementation tasks under joint
management.
The international organisation will continue to manage the Funds covering the costs
of the realization of the shelter being currently erected and that will cover the
damaged nuclear reactor number 4 at Chernobyl.
The change of method of implementation constitutes a substantial change except
where the Commission "re-centralises" or reduces the level of budgetimplementation tasks previously entrusted to the international organisation.
4.4.
Scope of geographical eligibility for procurement in direct centralised and
decentralised management
All contracts implementing the action shall be awarded and implemented in
accordance with the procedures and standard documents laid down and published by
the EBRD.
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4.5.
Indicative budget
Module
Third party
contribution
(indicative,
where
known)
4.3.5. – Joint management with EBRD
25.105
N.A.
4.7. – Evaluation and audit (indicative)
N.A.
N.A.
4.8. – Communication and visibility (indicative)
N.A.
N.A.
0
N.A.
25.105
N.A.
Contingencies
Totals
4.6.
Amount in
EUR
thousands
Performance monitoring
This project is implemented by the EBRD under the monitoring of the Assembly of
Contributors.
The G8 NSSG – EBRD Contact Group follows closely the implementation of the SIP
as recommended by the Court of Auditors. In addition, the projects will be followed
by an Independent Monitoring Consultant which will concentrate, in particular, on
the cost and schedule of the projects (see paragraph 2.2 above).
4.7.
Evaluation and audit
Financial transactions and financial statements shall be subject to the internal and
external auditing procedures laid down in the Financial Regulations, rules and
directives of the EBRD.
4.8.
Communication and visibility
The EBRD shall take all appropriate measures to publicise the fact that this project
has received funding from the European Union (http://www.ebrd.com/index.htm).
In addition, other actions to disseminate results and increase the visibility of the
European Union’s action will be implemented in parallel by the European
Commission.
6
Such visibility activities will be implemented according to well-defined standards
and rules: the Communication and Visibility Manual for European Union External
Actions.
7