You're reading: EU approves loan for Ukraine to replace Chernobyl

BRUSSELS, Dec. 13 (AP) – The European Commission approved a $585 million loan Wednesday to help Ukraine complete construction of two reactors intended to replace electricity production lost when the Chernobyl nuclear plant shuts Dec. 15.

But in a statement the European Union’s executive office also urged the former Soviet republic to enact reforms to strengthen its struggling economy and improve the ability of Energoatom, the Ukrainian national energy company, to repay the loan.

Many formerly state-owned companies in Ukraine are in arrears for energy payments or don’t pay their bills at all, resulting in a serious cash crunch at Energoatom.

Among the loan’s conditions are a requirement for Energoatom to set aside a share of daily revenues to create a reserve for payments. The loan also will be guaranteed by the government of Ukraine.

The loan approved Wednesday is part of a $1.48 billion financing plan that will be used to complete units at the Khmelnytsky and Rivne nuclear power plants. Other lenders include the European Bank For Reconstruction and Development and various export credit agencies.

The Commission said the loan is important because the new reactors will reduce Ukraine’s dependence on fuel from Russia when Ukraine shuts down the last of four reactors at the Chernobyl plant, site of the world’s worst nuclear accident in 1986.

Environmentalists opposed to nuclear power had called on the Commission to reject the loan, arguing that the reactors would not meet Western safety standards.