The Angra 1 nuclear power plant [39]

Furnas ordered the first, second and third nuclear power plants because the planned site for these reactors was within its area of responsibility, and also because nuclear power plant construction was to be pursued by a Government owned firm with financing from the national budget and foreign loans guaranteed by the Government.

Construction of the Angra 1 nuclear power project (a 657 MW(e) PWR) started in 1972 and commercial operation began in 1984. The loans amounted to US $1117 million, of which $371 million were supplied from foreign sources and

$746 million provided domestically (Table XXII) [39]. Locally financed funds were used for construction work, while the internationally financed portion was used to cover foreign equipment and engineering costs. Comparing various nuclear power plant construction activities in the 1970s, the construction period was exceptionally long and the magnitude of the investment for Angra 1 was exceptionally large.

TABLE XXE. LOANS FOR THE CONSTRUCTION OF ANGRA UNIT 1 [39]

(amounts in millions of US dollars; amounts in square brackets are in millions of South African rand)

Year 1970 1971 1972 1973 1974 1975 1976 1977 1978 1989 1980 Total Local 1.75 2.8 112.7 8.1 8.1 98.9 86.2 192.4 234.9 745.85 Foreign 138.0 . 34.6 49.0 149.7 371.3 loans [2.4] [2.0]

Total 1.75 2.8 250.7 8.1 8.1 98.9 34.6 86.2 241.4 234.9 149.7 1117.15 [2.4] [2.0] [4.4]

Note: South African currency was used to finance the acquisition of uranium concentrate (U3Og), which was purchased from South Africa for the first fuel load.

In addition to the financing for plant construction, Furnas received a loan from the uranium supplier, South Africa, of Rand 4.4 million (then about $3.74 million) for purchasing the first fuel load.

5.6.1.1. International financing for Angra 1

International financing continued from 1972 to 1980. The US EXIM provided four financing arrangements for Angra 1 during these nine years.

In 1972, US $138 million were loaned by EXIM — $128 million were spent on construction and $10 million on fuel fabrication. The loan maturity was set at 15 years, starting on 1 February 1978, with an interest rate of 7.5% per annum (7% plus a fee of 0.5%). This was the largest loan which Furnas received at that time.

In 1973, Rand 2.4 million (approximately $2 million) were loaned by the Industrial Development Corporation of South Africa Ltd. The terms of repayment were 2.5 years starting from 1978, with an interest rate of 6.25% per annum.

In 1976, the South African Industrial Development Corporation's loan was increased to Rand 4.4 million and the difference from the previous loan of Rand 2 million was lent by this corporation. Furnas used this to purchase UF⁶ from NUFCOR of South Africa. Enrichment services were contracted from what was then the United States Atomic Energy Commission. Also in 1976, additional loans were obtained from a consortium, constituting the US EXIM, PEFCO and Morgan Guaranty Trust Company (N.Y.), amounting to $34.6 million. Of this loan, 50%

came from the EXIM and the rest equally from the other two members of the consor-tium. The repayment term was 15 years, from 1978 to 1993. The interest rate was to be settled between 7.5 % per annum, and a rate which is 1.75 % higher than a mini-mum commercial lending rate (MCLR).

In 1978, $49 million were loaned by a consortium consisting of the US EXIM and Morgan Guaranty Trust Company, and also independently by Morgan Guaranty Trust. The conditions were as follows:

Consortium Morgan Guaranty Trust Co.

Loan (US dollars) 33.15 million 15.85 million Maturity 1979-1993 1979-1988

Interest rate 5.5-8.985% per annum (i) MCLR plus 1.0% per annum (ii) Credit supplier's prime rate

plus 1.75% per annum In 1980, $149.7 million were loaned by an EXIM led consortium. This amount was then on-lent to Furnas by ELETROBRAS, a parent company of Furnas. The

sum of $51 million came from a consortium in which the EXIM share was $24 mil-lion, PEFCO $12 million and Bankers Trust Co. $15 million. The rest of the 1980 loan, $98.7 million, came from a part of the loan acquired from abroad by ELETROBRAS. The EXIM's conditions are repayment from 1981 to 1993 at an interest rate of 6.0-9.5% per annum.

In 1985, a further contract with EXIM was signed for $59.3 million for improvements to the plant. For repairing the electrical generator of Angra 1 and related services carried out by Siemens/Kraftwerk Union (KWU), financing con-tracts were signed in 1988 with Ausfuhrkredit Gesellschaft mbH (AKA) in the amount of DM 4.25 million and with the Kreditanstalt fur Wiederaufbau (KfW) for DM 4.25 million.

5.6.1.2. Local financing for Angra 1

Local financing continued from 1970 to 1979. During these years, national loans were provided mainly by ELETROBRAS and the Brazilian National Treasury.

In 1970, ELETROBRAS loaned $1.75 million for Angra 1. The site for the plant was selected in 1970, so that Furnas spent this loan for basic construction work, such as site preparation, improvement and widening of roads, building an airport for small aircraft, construction of substations, geological and land surveys and work-house construction.

In 1971, $2.6 million, or 4.8% of the 1971 borrowing from ELETROBRAS, were used for continuing basic construction work. The rest went for the construction of hydro and thermal power plants. Furnas spent $0.2 million of its own money in addition to $2.6 million for basic construction work for Angra 1. In the same year, selection was made of a 657 MW(e) PWR from Westinghouse. Negotiations for acquiring funds from the EXIM were successfully concluded.

In 1972, $112.7 million, or 66% of the sum lent by ELETROBRAS, were applied to the construction of Angra 1. In 1973, ELETROBRAS lent $8.1 million to Furnas. In 1974, the Comissao Nacional de Energia Nuclear, the Brazilian Nuclear Energy Commission, donated $8.1 million. In 1975, $90 million were bor-rowed from ELETROBRAS and $8.9 million from FINAME, Brazil's lending organization for purchasing machinery. In 1977, $86.2 million were lent, of which

$76.3 million came from ELETROBRAS and $9.9 million from FINAME. In 1978,

$185.9 million were loaned by ELETROBRAS and $6.5 million were appropriated by the Brazilian National Treasury. In 1979, ELETROBRAS provided $231.1 mil-lion and the Brazilian National Treasury appropriated $3.8 milmil-lion.

5.6.1.3. Current situation of Angra 1

Angra 1 is currently operating, and Angra units 2 and 3 are under construction.

Construction of Angra 1 started in 1972 under a turnkey contract with Westinghouse,

and achieved first criticality in 1982. However, it encountered many technical problems that delayed commercial operation until January 1985. Even after achiev-ing full power operation, it encountered difficulties, includachiev-ing a lawsuit on its emer-gency preparedness, financial problems, extensive repairs to the electric generator and modifications to the steam generators. These resulted in a 16 month shutdown, from June 1987 to April 1988. Furnas has sued Westinghouse, claiming tens of mil-lions of dollars in damages for poor workmanship; the case remains unsettled [40].

In 1989, during a refuelling outage, and on a petition from local Green Party politicians, a lower court judge barred the restarting of the plant on the grounds that its emergency preparedness was inadequate. However, three months later, a higher court ruled that Angra 1 could be restarted.

With such a problem filled history, the cumulative capacity factor of Angra 1 remained at a low 20.1%. Operational Safety Review Teams from the IAEA have been invited twice and the plant received a favourable report. After the repair of the electric generator, the availability factor increased to 40.6% during 1990.