170 



(4) Reaffirmation of the earlier Commission decision to pur- 

 chase all plutonium and uranium 233 produced in foreign nuclear 

 power plants from fuel supplied by the United States through 

 June 30, 1963, subject to availability of appropriations. 



FINANCIAL ASSISTANCE FOR FOREIGN NUCLEAR POWERPLANTS 



In extending special incentives to encourage foreign use of nuclear 

 power, the U.S. Government faced a dilemma. On the one hand it was 

 well established that the AEC should treat domestic and foreign users 

 of nuclear power alike. On the other, special incentives were seen nec- 

 essary to induce foreign utilities and governments to risk investment 

 in demonstration nuclear power plants. For example, it would have 

 been advantageous to lease nuclear fuel to foreign users, which would 

 have offered the incentive of a lessened capital outlay. However, at that 

 time the domestic nuclear industry was evolving rapidly toward self- 

 sufficiency and the AEC required it to buy enriched uranium outright 

 rather than lease it. Likewise, while the AEC would fund research 

 and development for domestic nuclear power demonstrations, it would 

 not share in the requisite capital investment. 



The dilemma was resolved in October 1956 by providing special 

 assistance to foreign nuclear power projects through a different chan- 

 nel which was not available to the domestic nuclear industry. The AEC 

 and the Export-Import Bank agreed upon joint action to help finance 

 the construction of nuclear power plants in nations having bilateral 

 agreements with the United States. This arrangement was judged nec- 

 essary because of the still undemonstrated economics of nuclear power 

 and the known higher capital investment required for nuclear power 

 plants in comparison with conventional fossil fueled power plants. The 

 Bank announced its willingness to consider applications for loans to 

 cover the capital costs of nuclear power plants for privately owned, but 

 not state owned, utilities abroad. The announcement indicated that the 

 terms for such loans would be similar to those for the financing of con- 

 ventional power plants for which equipment and technical services 

 were obtained from the United States. The Bank indicated that it 

 would require the following for a nuclear power project: 82 



(1) A comprehensive engineering survev : 



(2) A technical report by the United States Atomic Energy 

 Commission; 



(3) An arrangement for supply of the nuclear fuel for the 

 term of the loan: 



(I) Evidence of overall financial and economic soundness: 



(5) Evidence of availability of funds to defray the costs which 

 must be met with local currency : and 



(6) Assurance as to the ability of the country to service the 

 dollar debt involved. 



The Bank made clear that funds so loaned could be used only to buy 

 equipment, materials, and technical services from the U.S. nuclear 

 industry. 



-is Atomic Energy Commission. Radiation Safety and Major Activities in the 

 Atomic Pneryy Programs, July-December J956, op. cit., p. 15. 



