Exim Bank Boosts Taiwan - and U.S. - Nuke Industry

The United States Export-Import Bank (Exim) has agreed to loan $858 million to Taiwan for a nuclear plant that U.S. companies will help build.

The Exim loan amounts to 75% of the financing of Taiwan's fourth nuclear plant. The U.S. government loan will carry an interest rate of 10.75% and will not have to be paid back in full for 25 years.

The U.S. firm, Combustion Engineering, is the leading candidate to receive the contract to build the plant.

"Combustion Engineering has the first negotiating rights," says Bill McClure, commercial officer for the American Institute of Taiwan, the U.S. government liason with Taiwan. Combustion Engineering acknowledges being strongly in the running for the contract, "but we have no word on any final decision," says Dean Miller, director of public information for the company.

The Exim loan, yet to be formally approved, is the bank's largest so far this year, representing about 22% of Exim's budget for fiscal 1982.

Exim's "preliminary commitment" came after months of bidding wars with other major Western countries, according to Ann Frey, press officer at Exim. "It was a very intense competitive situation," says Frey. "France, Germany, Japan, and Switzerland were involved (bidding for financing agreements) in addition to the U.S. and Britain."

As a result of the competition, Exim's terms for financing gradually became more generous. "The agency first made an offer in September," says Frey. The amount of finance then being discussed was only 42.5%, she says, but by March, Exim had raised the level to 75% - the legal limit allowed by USS. statutes.

Exim's financing of this project has come under criticism. "There is no safe site in Taiwan to build a nuclear reactor," says Virginia Foote, associate director of the Washington-based Center for Development Policy. According to Foote, "the risk of earthquakes and volcanos," plus "the population density" of Taiwan make a nuclear plant dangerous. "No site would pass NRC (U.S. Nucleai Regulatory Commission) standards," Foote says.

Foote also objects to Exim's general policy of making loans for nuclear projects abroad. "If Congress wants the nuclear industry to be bailed out, then bail it out now, "she says, "But as it is now, the nuclear companies are capturing the Export-Import Bank for loans Congress never intended it to make.