(1) At the proposal of Mr Karel Van Miert, Commissioner in charge of credit and investments, the Commission today adopted a communication to the Council and the Parliament accompanied by a draft Council decision with a view to using a significant proportion of Euratom's outstanding borrowing capacity to help finance improvements in the efficiency and safety of existing nuclear power stations in central and eastern European countries and the CIS. Euratom lending to the beneficiary countries could total approximately ECU 1 billion, covering 10% of the estimated investment required to upgrade the nuclear power stations of the countries involved. - - - Nuclear power is the source of a significant percentage of the electricity generated in central and eastern Europe and the CIS. Existing nuclear power stations generally suffer from poor efficiency and inadequate safety. It is essential to upgrade them if accidents that would have dramatic consequences for the continent of Europe are to be avoided. The European Council meeting in Lisbon (June 1992) had called on the Council to look into the possibility of using Euratom loans to finance investment aimed at improving the level of efficiency and safety of nuclear power stations in central and eastern Europe and the CIS. The Munich G7 summit (July 1992) had also highlighted the importance of improving nuclear safety in these countries. The Euratom Treaty makes provision for the Commission of the European Communities to finance investments in the industrial production of electricity of nuclear origin and in industrial fuel cycle facilities. Such loans are administered by the Commission of the European Communities. While loans granted by Euratom totalled ECU 2.8 billion, the ceiling on Euratom borrowing was raised from ECU 3 billion to ECU 4 billion by the Council of Ministers on 23 April 1990. In coming years, nuclear projects within the Community will not be a major drain on this source of funds. (1) COM(92) 467 There is therefore a lending margin of over ECU 1 billion. The Commission proposes putting these funds to use by extending the scope of the instrument to cover nuclear projects in the countries of central and eastern Europe and the CIS. To this end, it proposes that the Council should amend Euratom Decision 77/270 to allow the Commission to channel Euratom funds to such countries. This instrument, which already operates within the Community, will represent a logical extension of ongoing operations under the TACIS and PHARE programmes providing technical assistance for the improvement of nuclear safety. The draft decision is accompanied by an annex that sets out the lending conditions. The loans must be guaranteed by the State in which the investment is being made. The Commission will limit such loans to 50% of the total cost of the projects. The term of the loan will depend on the type of project and the life-span of the assets financed. The maximum term will be 20 years. Interest rates will be closely tied to the cost of the borrowings used to finance the loans. Financial assistance will only be granted to projects that have been approved by the relevant national authorities. Before approving each application, the Commission, assisted by the EIB, will examine the technical impact of each project on safety and will ensure that there is economic justification for it. Commissioner Van Miert is convinced that judicious use of the Euratom instrument will make a significant contribution to the modernization requirements of the nuclear industry in the countries concerned, that it will lead to a gradual introduction of market mechanisms and, above all, that it will bring about an improvement in safety so essential to the citizens of Europe. * * *
