Assurance of Supply for Nuclear Fuel
IAEA LEU Bank
On 3 December 2010, the IAEA Board of Governors authorized the IAEA Director General to establish a reserve of low enriched uranium (LEU), or an IAEA LEU bank. Owned and managed by the IAEA, the IAEA LEU bank will help to assure a supply of LEU for power generation.
Should an IAEA Member State´s LEU supply to a nuclear power plant be disrupted, and the supply cannot be restored by the commercial market, State-to-State arrangements, or by any other such means, it may call upon the IAEA LEU bank to secure LEU supplies, without distorting the commercial market. This initiative does not diminish in any way States´ rights to establish or expand their own nuclear fuel production.
In May 2011, the IAEA circulated criteria for a host state and invited Member States which may wish to host the IAEA LEU bank to make their intentions known. In this regard, Kazakhstan is the only Member State that has formally expressed its interest. An IAEA technical mission to Kazakhstan in August 2011 was set up to assess the two sites offered to locate an IAEA LEU bank. To finalize the decision on selecting the site, the IAEA and the Government of Kazakhstan are discussing the relevant technical matters.
Donors have pledged about 125 million US dollars and 25 million euros to cover the initial estimated operational expenses and to the purchase and deliver LEU to the IAEA LEU bank in a Host State or States. Only pledged contributions and additional voluntary contributions of funds and services will be used to cover start-up and operational costs. The operation of the bank will have no financial implications for the IAEA regular budget.
With these financial resources the IAEA LEU bank aims to have enough LEU to meet the fuel fabrication needs for two to three reloads of fuel for a 1,000 MW(e) light water reactor.
The LEU will be made available to an eligible IAEA Member State at the market prices prevailing at the time of supply. The proceeds will then be utilized to replenish the stock of LEU in the IAEA LEU bank.
Requirements for supply
LEU from the bank will only be supplied to a Member State which fulfills the following eligibility criteria:
- The Member State is experiencing a supply disruption of LEU to a nuclear power plant and is unable to secure LEU from the commercial market, or through State-to-State arrangements, or by any other such means;
- The IAEA has made a conclusion that there has been no diversion of declared nuclear material and no issues relating to safeguards implementation in the requesting State are under consideration by the IAEA Board of Governors; and
- The Member State has brought into force a comprehensive safeguards agreement requiring the application of IAEA safeguards to all its peaceful nuclear activities.
LEU from the IAEA LEU bank, as a mechanism of last resort, can only be supplied to a Member State upon advance payment, when the Director General concludes that these three criteria are fully met.
Recipient State's obligations
The Recipient State shall conclude a Supply Agreement with the Agency and through it undertake that:
- The LEU from the IAEA LEU bank can only be used for fuel fabrication for the generation of energy at a nuclear power plant;
- The LEU may not be used to manufacture any nuclear weapon or nuclear explosive device, nor for any other military purpose;
- It shall not further enrich, reprocess, retransfer or re-export the LEU unless the IAEA agrees;
- It shall apply the applicable IAEA safeguards, safety standards and physical protection measures to the LEU; and
- It shall take responsibility for all liability for any nuclear damage that may be caused by a nuclear incident associated with the use, handling, storage or transport of the LEU supplied under the Agreement.
- The IAEA LEU bank shall be located in one or more Member States that are prepared to host the bank;
- For the IAEA´s LEU bank effective operation, the IAEA will ensure that the Host State or States apply IAEA safeguards, safety standards, safety measures and physical protection measures to the LEU in the bank;
- The Host State shall grant the Agency the right to transport LEU to and from the IAEA LEU bank as determined by the Agency; and
- If necessary, guaranteed transit arrangements shall be concluded with States neighbouring the Host State.
- European Union: €20 million paid out of €25 million pledged;
- Kuwait: US$ 10 million - paid in full;
- Norway: US$ 5 million – paid in full;
- United Arab Emirates: US$ 10 million - pledged;
- United States: US$ 49 540 000 – paid in full; and
- Nuclear Threat Initiative: US$ 50 million – paid in full.
The IAEA Statute provides the Agency with the authority to carry out the activities that are necessary to establish and operate an IAEA LEU bank.