You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App

NEW SENS search and JSE share prices

More about the app

Rosatom says Russia can fund SA’s $100bn nuke plan

If state-owned Rosatom is awarded the construction contracts.

Russia’s government is ready to help South Africa fund new nuclear plants, estimated to cost as much as $100 billion, if state-owned Rosatom is awarded the construction contracts, a company official said.

Moscow-based Rosatom has suggested several funding models, including helping South Africa secure a Russian loan, Viktor Polikarpov, regional vice president for sub-Saharan Africa, said in an interview in Cape Town on Thursday. The loan duration might be 20 years and South Africa would only start repayment when the first plant starts operating, he said.

“The interest rate the government is offering is not very high, it’s really lucrative,” Polikarpov said. “We won’t get this interest rate anywhere, at any bank.”

South Africa plans to add 9,600 megawatts of nuclear power to the national grid and wants the first reactors to be operational by 2023, a target Polikarpov says is attainable. While the Department of Energy wants to award the contracts by the end of March next year, the National Treasury says it still needs to establish whether they are affordable.

While Rosatom would consider building, owning and operating plants in South Africa, as it has done in Turkey, such contracts would be more complex, Polikarpov said.

 

The Question

“The question will be how can we secure a power-purchase agreement,” he said. “This model is possible but maybe not so viable at this time.”

The new reactors could cost as much as $100 billion over 15 years, according to Des Muller, head of Johannesburg-based building company Group Five Ltd.’s nuclear construction division. That’s more than five times what state-owned electricity utility Eskom Holdings is spending on two coal-fired plants that will generate a similar amount of power.

The South African Department of Energy’s 2013 master-plan, rejected by the government, suggested deferring a decision on building atomic power facilities until at least 2025, and scrapping the idea if the cost exceeded $6,500 per kilowatt of capacity. Countries such as Pakistan, Turkey and Belarus were paying $4,200 per installed kilowatt, and India, China and South Korea $2,500, the department said in a statement Tuesday.

“We can target what the South African government is expecting,” Polikarpov said. “The final cost of the build will be determined by the final contracts which are to be signed with the preferred bidder. We say that we are still able to compete.”

Areva SA, EDF SA, Toshiba Corp.’s Westinghouse Electric Corp., China Guangdong Nuclear Power Holding Corp. and Korea Electric Power Corp. have also shown interest in bidding to build the plants in South Africa.

Rosatom is building nine reactors in Russia and 29 elsewhere. It controls the entire process from uranium purchase and fuel fabrication to design, construction and commissioning of plants, helping contain costs, according to Polikarpov.

“We are generating a lot of cash,” he said. “Our revenue is $16 billion a year and our revenue from overseas contracts is $5 billion, which we can invest into new build.”

©2015 Bloomberg News

COMMENTS   3

Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in to comment.

SIGN IN SIGN UP

Guptas + uranium mine = ?
Join the dots…

First of all. An independent corruption watch dog (that includes nuclear specialists, CA’s, judges etc) should be appointed immediately to monitor the tender processes. It’s according to me a last stab from # 1 to pocket BIG before he retires as president. It’s no co-incidence that Jacob Zuma hurried to Russia a few weeks back for some “under the table” discussions. It’s no coincidence that Rosatom fired hundreds of employees for corruption and has ex executives serving jail terms for corruption. They (Rosatom) know the intricacies of corruption just too well. It’s no coincidence that the biggest tender in SA history will go to them. The ANC government is selling the tax payer of SA out to Russia, and even the next generation of South Africans will have to carry the brunt of being tossed for the wolves (cross generation major financial debt). This all happening under our noses when we know massive bribes will be paid to those that will never live long enough to experience the economic destruction their actions will lead too. SA needs to be unfcuked. SA needs to be be freed from Zuma and his cronies.

SA taxpayers tossed for the wolves so a few can line their pockets going into retirement. The next generation will still pay off on these major debts. SA can’t afford this. It’s economic suicide.

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Podcasts

INSIDER SUBSCRIPTIONS APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING PORTFOLIO TOOL CPD HUB

Follow us:

Search Articles:
Click a Company: