Financing Arrangements for Nuclear Power Projects in Developing Countries

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353
TECHNICAL REPORTS SERIES No.
Financing Arrangements for
Nuclear Power Projects
in Developing Countries
A Reference Book
INTERNATIONAL ATOMIC ENERGY AGENCY, VIENNA, 1993

FINANCING ARRANGEMENTS FOR
NUCLEAR POWER PROJECTS
IN DEVELOPING COUNTRIES
A Reference Book
The following States are Members of the International Atomic Energy Agency:
AFGHANISTAN HOLY SEE PARAGUAY
ALBANIA HUNGARY PERU
ALGERIA ICELAND PHILIPPINES
ARGENTINA INDIA POLAND
AUSTRALIA INDONESIA PORTUGAL
AUSTRIA IRAN, ISLAMIC REPUBLIC OF QATAR
BANGLADESH IRAQ ROMANIA
BELARUS IRELAND RUSSIAN FEDERATION
BELGIUM ISRAEL SAUDI ARABIA
BOLIVIA ITALY SENEGAL
BRAZIL JAMAICA SIERRA LEONE
BULGARIA JAPAN SINGAPORE
CAMBODIA JORDAN SLOVENIA
CAMEROON KENYA j SOUTH AFRICA
CANADA KOREA, REPUBLIC OF SPAIN
CHILE KUWAIT SRI LANKA
CHINA LEBANON SUDAN
COLOMBIA LIBERIA SWEDEN
COSTA RICA LIBYAN ARAB JAMAHIRIYA SWITZERLAND
COTE D'lVOIRE LIECHTENSTEIN SYRIAN ARAB REPUBLIC
CUBA LUXEMBOURG THAILAND
CYPRUS MADAGASCAR TUNISIA
DEMOCRATIC PEOPLE'S MALAYSIA TURKEY
REPUBLIC OF KOREA MALI UGANDA
DENMARK MAURITIUS UKRAINE
DOMINICAN REPUBLIC MEXICO UNITED ARAB EMIRATES
ECUADOR MONACO UNITED KINGDOM OF GREAT
EGYPT MONGOLIA BRITAIN AND NORTHERN
EL SALVADOR MOROCCO IRELAND
ESTONIA MYANMAR UNITED REPUBLIC OF
ETHIOPIA NAMIBIA TANZANIA
FINLAND NETHERLANDS UNITED STATES OF AMERICA
FRANCE NEW ZEALAND URUGUAY
GABON NICARAGUA VENEZUELA
GERMANY NIGER VIET NAM
GHANA NIGERIA YUGOSLAVIA
GREECE NORWAY ZAIRE
GUATEMALA PAKISTAN ZAMBIA
HAITI PANAMA ZIMBABWE
The Agency's Statute was approved on 23 October 1956 by the Conference on the Statute of the
IAEA held at United Nations Headquarters, New York; it entered into force on 29 July 1957. The Head-
quarters of the Agency are situated in Vienna. Its principal objective is "to accelerate and enlarge the
contribution of atomic energy to peace, health and prosperity throughout the world".
© IAEA, 1993
Permission to reproduce or translate the information contained in this publication may be
obtained by writing to the International Atomic Energy Agency, Wagramerstrasse 5, P.O. Box 100,
A-1400 Vienna, Austria.
Printed by the IAEA in Austria
March 1993
STI/DOC/10/353
TECHNICAL REPORTS SERIES No. 353
FINANCING ARRANGEMENTS FOR
NUCLEAR POWER PROJECTS
IN DEVELOPING COUNTRIES
A Reference Book
INTERNATIONAL ATOMIC ENERGY AGENCY
VIENNA, 1993
VIC Library Cataloguing in Publication Data
Financing arrangements for nuclear power projects in developing countries : a
reference book. — Vienna : International Atomic Energy Agency, 1993.
p. ; 24 cm. — (Technical reports series, ISSN 0074-1914 ; 353)
STI/DOC/10/353
ISBN 92-0-100993-3
Includes bibliographical references.
1. Nuclear industry—Developing countries. 2. Industrial development
projects—Finance. I. International Atomic Energy Agency, n. Series:
Technical reports series (International Atomic Energy Agency) ; 353.
VICL 93-00054
FOREWORD
This reference book reviews the main features and problems or difficulties
involved in the financing of nuclear power projects with special reference to
developing countries. It provides basic information and advice to developing
countries interested in nuclear power projects as part of their power sector planning.
The book outlines the general characteristics of financing a nuclear power
project and presents innovative approaches for power generation financing. It
discusses the special conditions and requirements of nuclear power projects and their
financing complexities. The focus is on the practical issues that need to be dealt with
in order to successfully finance these power projects, as well as the constraints faced
by most developing countries. Possible ways and means of dealing with these
constraints are presented. The main topics covered by the book are the:
— Special circumstances related to the financing of nuclear power projects,
— Costs and economic feasibility of nuclear power plants,
— Conventional approaches for financing power generation projects in develop-
ing countries,
— Experience gained and lessons learned,
— Alternative approaches for mobilizing financial resources.
A recurring theme in the book is how the problems and difficulties associated
with the need for more foreign exchange in many developing countries can be
solved, and the inadequacy and complexity of the present international financing sys-
tem for supporting financing requirements in the magnitude needed for a nuclear
power project. Alternative approaches should be considered to overcome constraints
on financing nuclear power projects in many developing countries. However, it
appears that new financing approaches in the power generation sector have not yet
proved to be successful for nuclear power.
The book reflects experience gained from the Agency's two seminars on the
financing of nuclear power projects in developing countries held in Vienna (1985)
and in Jakarta (1990), the latter in co-operation with the Government of Indonesia,
and from a 1987 study conducted by a Senior Expert Group on the Promotion and
Financing of Nuclear Power Programmes in Developing Countries. This reference
book was prepared by the Agency's Division of Nuclear Power with contributions
from experts within and outside the Agency. The responsible officer was Y. Tatsuta
of the Division of Nuclear Power. In the preparation of this report, valuable
contributions to, and/or reviews and comments on, the various drafts were made by
some members of the Advisory Group meetings on contracts and the financing of
nuclear power projects in developing countries, by S.G. Xu (Guandong Nuclear
Power Joint Venture Corporation Limited, China), J.-P. Lee (Korea Electric Power
Corporation, Republic of Korea), M. Kanzaki (Japan Electric Power Information
Center, Japan), J.A. Marques de Souza (NUCLEN, Brazil), H. Mitsuishi (Japan
Atomic Industrial Forum, Japan), H. Tsuchida (Electric Power Development Corpo-
ration, Japan) and, in particular, by A.F. El-Saiedi (Nuclear Power Plants Authority,
Egypt), H. Herold (Kreditanstalt fur Wiederaufbau, Germany) and K. Shimazaki
(The World Bank). G. WoiteandC.W. Hu, of the IAEA Division of Nuclear Power,
prepared sections 3.2-3.6 in Chapter 3.
The IAEA expresses its appreciation to all those who participated in the prepa-
ration of this reference book and also to the Member States that made available
experts to assist in this work.
EDITORIAL NOTE
Although great care has been taken to maintain the accuracy of information contained
in this publication, neither the IAEA nor its Member States assume any responsibility for
consequences which may arise from its use.
The use of particular designations of countries or territories does not imply any judge-
ment by the publisher, the IAEA, as to the legal status of such countries or territories, of their
authorities and institutions or of the delimitation of their boundaries.
The mention of names of specific companies or products (whether or not indicated as
registered) does not imply any intention to infringe proprietary rights, nor should it be
construed as an endorsement or recommendation on the part of the IAEA.