Among the Ukraine’s legacies from its former membership of the old USSR is the Chernobyl RBMK nuclear power plant, where the April 1986 accident occurred. In addition it has inherited 13 operating Soviet-design pressurised water reactors (two of the 400 MWe, VVER-440 type and 11 of the 1000 MWe, VVER-1000 type), plus several never-completed VVER-1000 projects. In 1996 the Ukrainians finished the Zaporozhe 6 VVER-1000 under their own steam, with local financing and to existing domestic safety standards. Of the remaining VVER-1000 projects, Khmelnitsky 2 and Rovno 4 (K2/R4) are the closest to being finished, at around 85 per cent complete.

With substantial Western funding, a project is now underway to modernise, upgrade and complete K2/R4, at a total cost of around US$1.48 billion. The K2/R4 completion project took a decisive step forwards at the end of last year when, after several years of deliberation, the European Bank for Reconstruction and Development (EBRD) announced approval for a US$ 215 loan to Energoatom, the state-owned Ukrainian nuclear utility, to help fund the work. The EBRD green light triggered European Commission approval for a Euratom loan of US$ 585 million towards the project, while the balance of the funding will come from Export Credit Agencies (US$ 348.3 million), Russia (US $123.7 million), Energoatom itself (US $158.6 million) and the government of Ukraine (US $50 million).

The completion project goes back to 1995 when the governments of Ukraine and the G-7 countries, along with the European Commission, signed a Memorandum of Understanding (MoU) on a programme to support the closure of Chernobyl by 2000. A key element of the programme was development of loan financed projects, such as K2/R4, that would help Ukraine meet its power needs on a least-cost basis. Among the conditions for the loans has been permanent closure of the Chernobyl RBMK nuclear power plant. As promised the Ukrainians did indeed shut down the last operating reactor (unit 3) on 15 December 2000. Another key condition is Ukrainian government commitment to a strong, well-resourced and independent nuclear safety regulator. The Ukrainians are also required to adopt a nuclear safety improvement programme, covering operations, improved maintenance and safety upgrades of all nuclear power plants, for which K2 as completed will act as a prototype. Also required is electricity sector reform, particularly privatisation of energy distribution companies and increases in tariffs and tariff collection rates, together with IMF approval of its extended fund facility to the Ukraine.

The Export Credit Agency (ECA) funding is still under active negotiation. But once this is agreed, contracts for the work will be placed with an entity known as the General Contractor – a consortium led by Framatome and including Siemens (with whom Framatome has just merged its nuclear activities, into a new company called Framatome ANP). The consortium has a Russian partner, Atomstroyexport.

The project management team (PMT) is supported by a consortium of EDF, Tractebel and Fortum, while other work will be done by Ukrainian and Russian organisations, with Kiev Energoproject (KIEP) in the “General Designer” role.

Project scope

The hope is to have Khmelnitsky 2 completed by 2004 and Rovno 4 in 2006. Construction work will be sequential, with main works at Rovno 4 starting only after their successful completion at Khmelnitsky 2. The lag between the commencement of work at K2 and R4 is expected to be about 18 months. The lead-time between availability of funds and commissioning of each unit is currently expected to be around 36 months.

The project consists of the rehabilitation and completion of the two units and their modernisation to ensure compliance with both current Ukrainian and Russian standards and best international practice. The aim is to complete the plants to “an internationally acceptable safety level”, according to the EBRD. The overall project includes supply of the first loads of nuclear fuel (designed and manufactured in Russia) and some new high voltage lines for the transmission network.

Construction originally started on K2 and R4 in the early 1980s but slowed in 1989 due to lack of finance and was halted in 1991 by a government moratorium subsequent to the Chernobyl accident. Using Energotaom’s own funds, work on a small scale was resumed in 1995 by Ukrainian contractors, mainly to preserve some of the hardware already installed. Following a decision of Energoatom in July 2000, work was accelerated; some equipment was repaired or replaced, allowing some systems to operate on a non-rated regime, with the aim of preserving hardware. This also enabled the utility to start mobilising staff for the expected resumption of the construction process.

The scope of work for the K2/R4 project is defined in terms of three main programmes:

• Completion programme;

• Rehabilitation programme;

• Modernisation programme.

The K2/R4 General Contractor Consortium, led by Framatome ANP, is responsible for the procurement, erection and pre-commissioning of the equipment. The basic and detailed design will be performed by the General Designer, Kiev Energoproject, while commissioning is the responsibility of the client, Energoatom.


The completion programme consists of procuring the remaining equipment and components needed to finish the plant and their installation, along with existing equipment already in storage. To varying degrees this concerns most plant systems and includes outstanding construction work, cabling and a good deal of small diameter piping.


The equipment already installed on the plants has been inspected in order to determine what repairs or replacements are needed. This inspection resulted in particular in the decision to replace a large proportion (perhaps around three-quarters) of the instrumentation and control systems, partly with new technology, while retaining the existing basic design. Upgrades include, for example, additional scram signals. But a key element of the I&C backfitting strategy is to avoid complications by retaining the functionality of the original design.

The I&C rehabilitation programme concerns, in particular, the systems process instrumentation, safety and non-safety automatic control system, physical and chemical control, reactor protection, in-core instrumentation and radiation monitoring. Other typical repair and replacement tasks include refurbishing and repainting of damaged civil work, preserving other surfaces, refurbishing or repairing mechanical equipment, completing or acquiring missing manufacturer documentation, and extensive cleaning. About 100 000m2 of surface needs to be painted and 20 000 valves and pumps need to be worked on.

Around 20 million man hours are needed for K2/R4 completion and rehabilitation.


The K2/R4 units are third-generation VVER 1000s, denoted type 320. They are in many ways comparable to Western 1000 MW pressurised water reactors, having similar safety systems and features. They have a negative power coefficient, emergency core cooling systems and containment structures, which are designed to limit the release of contaminated materials into the atmosphere in case of an accident. Unlike other Russian designed reactor types, no “Category IV” safety issues have been identified by the International Atomic Energy Agency (IAEA report EBP-WWER-05 March 1997, Safety issues and their ranking for VVER-1000 model 320). However, differences in engineering design solutions, quality of manufacture and reliability of equipment lead to deficiencies compared with best Western practice in nuclear plant design. Hence the safety upgrades contemplated in the K2/R4 project.

The Modernisation programme has been established by Energoatom in co-operation with international experts. Its objectives are: to eliminate deviations from current national safety codes and standards (the original design was developed in the late 1970s and Russian and Ukrainian basic safety criteria have since moved on); to address design deficiencies identified by the International Atomic Energy Agency; to improve reliability in safety-related systems; and to develop new operating procedures.

There are 87 modernisation measures included in the General Contractor scope entailing hardware procurement and/or erection and commissioning activities. Most of them will be implemented before commissioning of the two units, the remaining measures being carried out during the first three annual outages.

All the design and operating safety issues identified by the International Atomic Energy Agency for this reactor type have been addressed in the K2 and R4 projects. Among the main safety improvements to be implemented before commissioning are those relating to:

• review of all accident scenarios against the Design Basis Accident criteria and definition of corrective actions;

• control rod insertion reliability in case of a seismic event or severe accident;

• adequacy of in-service inspection methodology and of pressure vessel surveillance;

• qualification of all safety systems and equipment for a severe accident;

• fire protection and fire fighting capability;

• preparation and review of a complete safety analysis report complying with the new plant configuration; and

• operation and maintenance procedures taking into consideration human factors.

The modernisation and safety upgrade programme for K2 and R4, including associated contingencies, accounts for approximately 40 per cent of the total costs of the K2/R4 completion project.

The completion and upgrading of K2/R4, including revised licensing and operation procedures, is intended to set a benchmark for improvement programmes for the rest of Energoatom’s PWRs. Energoatom has drawn up programmes for investment in modernisation and safety upgrade, as well as operational improvements at these other plants. A particular aim of the completion approach, according to EBRD, is “not to create a prototype but to allow similar modernisation to be implemented at the other VVER 1000 units already commissioned.”

Several other projects that should improve the overall situation at the Khmelnitsky and Rovno sites are underway, not funded through the new completion loan. These include radwaste processing systems and a full scope simulator at Khmelnitsky.

Past experience

The K2/R4 project is the first nuclear power plant completion financing undertaken by the EBRD. However, in its deliberations the EBRD has taken on board experience with two recent nuclear power station completion projects in Central Europe, as these “gave rise to issues that would be of relevance to the K2/R4 project.”

The projects in question are Mochovce in Slovakia (2 x VVER-440) and Temelin in the Czech Republic (2 x VVER-1000), both of which consisted of completing and upgrading partially built nuclear reactors of VVER design.

In 1994, the EBRD appraised the Mochovce project, which passed final review and discussions were held with co-financiers. EDF was retained as consultant to the client. However, the proposal was never presented to the EBRD board, because Slovakia decided to complete the project without the Bank, using an alternative financing scheme.

A consortium of Siemens, Framatome and the original Russian designer was general contractor on the Mochovce modernisation project. Siemens was also I&C supplier. Construction went well. Unit 1 was commissioned in 1998, just two months behind the desired schedule defined by Slovensky Energeticky Podnik (SEP) and the government, but within the schedule originally proposed by EDF. Unit 2 was commissioned in 1999, with an overrun of eight months. Unit 1 was completed for a cost that was 10 per cent greater than the originally budgeted contract cost but within allowances for contingencies. The participation of an experienced general contractor together with consultants involved from a very early stage in this project’s development and the subsequent monitoring of progress have been identified as reasons for the project’s timely and cost effective completion. The proposed involvement of the same principals in the K2/R4 project bodes well.

In contrast to Mochovce, the Temelin project experienced significant delays and cost overruns. Completion was achieved four years behind schedule and almost 100 per cent over the 1993 cost estimates. EBRD suggests three main reasons for these problems, which it of course intends to avoid in the K2/R4 project:

• Many fundamental changes to the basic design were made during construction. These had a major impact on the overall project schedule and costs and a knock-on effect on licensing, which exacerbated the problems.

• Project management deficiencies, changes in project management teams and weak budgeting and cost control further magnified the effect of the delays.

• All of this arose in the context of a complex contractual arrangement that proved difficult to manage, particularly between CEZ (owner, operator and project manager), Skoda (designer, supplier, and general contractor), and Westinghouse (designer, supplier, and contractor).

For K2/R4, no changes to either of the units’ basic designs are envisaged. The implementation arrangements for K2/R4 have been structured to ensure clarity of responsibility and experienced support has been arranged for Energoatom in order to minimise the risk of this type of difficulty arising.

Power in the Ukraine


Nuclear safety in Ukraine


Financing estimates for K2/R4 project (US$ million)
Source of funds for K2/R4 project (US$ million)

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