Working to save Visaginas

  • 2002-02-28
  • Greg Kaser
You report that Visaginas, where the Ignalina nuclear power plant is to be shut down, "could become a ghost town" ("People's lives at stake in nuclear plant closure," #294). The European Commission, to which I am a consultant, is actively working to avoid this scenario.

Your piece quoted Ignalina workers asking how they will be able to retrain and what jobs they can expect once the atomic reactors are shut down over the next few years. These are exactly the problems that our EU and Lithuanian team of experts has been addressing.

The two nuclear reactors must be shut down to meet European safety regulations. About 4,600 jobs will be lost, of whom 30 percent will be women. According to demographic and social studies, Visaginas, a town of 30,000 inhabitants, faces terminal decline over the next 20 years if nothing is done.

But decommissioning is an activity that will require around 1,300 to 1,500 workers on site for the next 20 years. The International Decommissioning Support Fund, managed by the European Bank for Reconstruction and Development, is financing preparatory projects worth over 200 million euros ($182 million), with additional funding for decommissioning after 2005.

Opportunities exist for Lithuanian companies to participate. For this reason the Lithuanian Business Employers Confederation has a branch in Visaginas and last year signed a three-way partnership with the mayor and the power plant to facilitate this.

Moreover, Visaginas has a thriving foreign-owned textile venture, a well-qualified labor force familiar with the Internet and a pleasant natural environment. We identified business opportunities in the service sector and tourism, and we consider that the location is suitable for foreign investment, with the right incentives from the government.


In the late 1980s I worked with local authorities from coal-mining regions in Western Europe to develop a package of economic development measures funded by the EU. So I know the difficulties that the Ignalina region is up against, living, as I do, in a coal and steel city myself, where 80,000 jobs were lost in the mid 1980s.

Last year, with my Lithuanian, British and Finnish colleagues, we produced a regeneration strategy commissioned by the European Commission and the Lithuanian Ministry of Economy. Representatives from the local communities, trade unions and business associations participated at every stage of our work.

We proposed that 8.5 million euros be set aside by the EU funds for job creation, retraining, infrastructure and social programs. Other contributions to the program should come from the national and municipal budgets, the EBRD's Decommissioning Fund and other governments, mobilizing a total of 14 million euros of public funds.

Over half of the EU funding should go toward loans to small- and medium-sized enterprises, to leverage private finance into the local economy. We calculated that this program would help stabilize the employment situation in the Ignalina region.

The European Union is co-funding the establishment later this year of a development agency, a business information and consultation center and a business incubator. We have produced operating plans for these agencies, which are needed to draw up projects eligible for EU and other international support.

Last year the EU Phare program made small grants for a variety of community initiatives to support employment and employability. The grants included two projects to support foreign language training, for a small-business development fund set up by the three local governments of the region, marketing plans for two local companies and a survey of redundant workers' skills.

The key to turning the longer-term plans into reality lies with the local and national authorities. When our EU mining regions had to restructure, the local authorities played an active role in shaping economic development.

I am in no doubt that just as the EU provided earmarked funds worth nearly a billion euros for the mining communities, where 380,000 people lost their jobs, equivalent support per redundancy will be forthcoming for Ignalina's people.

It is very much up to the Lithuanian government and the local authorities to take this process forward, by appointing experienced and dynamic individuals to head up the development agencies and find the matching funds from state budgetary resources.

Greg Kaser is an economist and project director with P-E International Consultants Ltd. (UK). He has been working with A. Abisala and Partners, a Lithuanian consultancy, since 2000 on a social strategy for the Ignalina region, on behalf of the EU's Phare program. The opinions are those of the author alone and should in no way be taken to reflect the policies or opinions of the European Commission.