South Africa is waiting for Rosatom’s money

putin and zuma.jpg South African President Zuma and Russian President Vladimir Putin. (Photo: Kremlin.ru)

JOHANNESBURG, South Africa—While the Russian economy is seemingly in a state of freefall, seeing its rouble plunge even deeper down the bottomless pit, its financial help is anticipated optimistically at the other end of the world: South Africa seems to be seriously counting on Russian federal budget funding to finance an ambitious nuclear build program experts estimate will cost between $40 billion and $100 billion.

The Russian State Atomic Energy Corporation Rosatom is not only offering to build eight nuclear reactors in the country, but to create an entire nuclear industry in South Africa that could export reactors to neighboring nations. The agreements on the development of nuclear energy Russia has recently signed with Nigeria and Ghana seem to be part of the same general idea.

All of this, though, looks far from realistic at the moment, given that the better part of the continent lacks reliable power lines to handle the transmission of electricity. Still, South Africa and other African nations are rich in deposits of uranium – a commodity whose reserves in Russia are limited.

Rosatom in Africa.jopg A Rosatom information booth in South Africa. (Photo: Vladimir Slivyak)

Russia has earlier already made a proposal to South Africa to build a nuclear fuel production facility. Otherwise, nuclear material would have to be transported across enormous distances on routes lying in vicinity of a number of unstable regions, including areas controlled by Somali pirates. Should the South African nuclear fuel program be realized, however, the issue of additionally reprocessing spent nuclear fuel in South Africa will likely come up for the same reason. As a result, reactor plutonium will start piling up in South Africa, something that is hardly conducive to better security.

The intergovernmental agreement that the Russian Federation and the Republic of South Africa signed in September 2014 is unusual for its degree of elaboration. The document mentions several locations for future nuclear power plants, the reactor technology expected to be used there, and the total combined capacity of the reactors proposed for construction – equivalent to eight reactors of the VVER-1200 type. It also contains a very specific limitation of liability for any damage that may arise from a nuclear accident, and gives Russia veto power to enjoin South Africa from cooperating with any other country on nuclear issues.

Shadows of corruption

The government of South Africa kept a tight lid on the text of the agreement for about six months until its contents were revealed in the media thanks to the efforts of the environmental organizations Ecodefense and Earthlife Africa.

Several weeks ago South African Energy Minister Tina Joemat-Pettersson announced the beginning of the nuclear procurement process – in other words, a tender – which is expected to be conclude by the end of the financial year. Officially, it is stated that the company that will land the reactor order has not been selected yet. In corroboration of that statement, the minister presented to the South African parliament texts of agreements signed with France, the United States, China, and South Korea as well as Russia.

Still, an analysis of these documents leaves no doubt as to which country will be the winner: None of the agreements with the exception of that with Russia includes any marginally significant details, and the one on cooperation with the United States was inked as long as 20 years ago – meaning it hardly has anything to do with this ongoing tender.

South africa NPP.jpg The spot on South Africa's coast where Rosatom plans to build a nuclear power plant. (Photo: Vladimir Slivyak)

Based on these facts, environmental activists in South Africa soon intend to file a lawsuit against the government for alleged violation of nuclear procurement rules. There is little doubt that the fundraising campaign to collect enough money for the litigation – 1.5 million South African rand, or roughly $120,000, will be needed – will prove successful. And at the very least, the court case can put the brakes on the nuclear program in South Africa for several years.

Opposition to nuclear initiative gets loud

Meanwhile, public disapproval of South African President Jacob Zuma’s nuclear energy development initiative is getting ever more vocal. Opposition against the program has already been sounded by the influential South African trade union association COSATU, a number of business associations, environmental groups, renowned journalists and experts. Even the government lacks unity on the matter, with the Ministry of Finance saying it cannot give its go-ahead on the program without a clear understanding of what the sources of financing will be. No money has been spoken for by this program in the national budget.

As of today, reports and op-eds in South African media are overwhelmingly and decidedly critical of the proposed nuclear program. Besides the economic and environmental arguments – and Rosatom lends itself easily to criticism even without mentioning Chernobyl, and South African environmentalists have already published a detailed report on Rosatom’s environmental record – with corruption as the most frequently mentioned theme.

South africa St Francis Gaansbai Wester Cape South Africa, near where Rosatom plans its nuclear build. (Photo: Vladimir Slivyak)

Only recently, South Africa was forced to deal with a huge corruption scandal involving an arms deal, and now the public’s attention is pinned to what the press has dubbed the “Nkandla scandal,” which arose out of the allegation that President Zuma used a considerable amount of state funding to finance upgrades on his own home. The opposition has taken the Nkandla matter to court and is demanding the return of at least part of the money. Most observers are convinced that President Zuma’s nuclear project will result in yet another corruption scandal, this time probably the biggest in the country’s history.

The South African government wants the country to have by 2023 eight new nuclear reactors. Actually, Rosatom has never built anywhere at this pace. For instance, the agreement with Turkey, on building a nuclear power plant at Akkuyu, was signed five years ago, but any real construction work is even yet to begin at the site. Pre-construction activities have just started at Akkuyu, and of the $20 billion promised by Russia to fund the construction of four reactors there only five percent has so far been allocated.

Rosatom’s proposed building schedule excessively aspirational

According to Rosatom’s statements, by the close of last year, the corporation had amassed some $100 billion worth of orders for 27 new reactors. But only projects in China and Belarus are at a stage of active construction. Evidently, the Russian nuclear giant’s capabilities for landing new agreements are practically limitless and yet far surpass its own capacity for actual reactor construction.

Most likely, though, given the state of Russian economy, both Rosatom’s ability to build fast and the possibility to attract funding for projects abroad will now be open to question. Not to mention the quality of construction – and to judge that one need look no further than the 2011 collapse of the reinforcing steel for the reactor containment building at the site of the second phase of Leningrad Nuclear Power Plant, near St. Petersburg.

south africa st francis bay.jpg South Africa's St. Francis Bay, near Rosatom's planned nuclear power plant build. (Photo: Vladimir Slivyak)

Signing a contract with South Africa will unlikely change dramatically the established practice, so only the very naïve would expect the reactors in South Africa to be built very soon. Still, the inability to keep to brisk construction schedules seems to be having no effect on the siphoning of more and more credit funding out of the Russian federal budget, even at a time of a direst economic crisis. It’s an interesting to ask who has more reason to be concerned – Russian or South African taxpayers. Granted, if the latter are worried in earnest, the former, it appears, couldn’t be bothered anymore.

There is one more heatedly debated aspect to the proposed nuclear program. South Africa is experiencing a crippling energy shortage, which lets itself be felt in frequent planned power outages practically all over the country. The nuclear industry is undoubtedly trying to make use of this situation – all the while choosing not to advertise that building a reactor takes, on average, about 10 years, and in certain cases three times as long. This means that the construction of nuclear power plants will in the foreseeable future have no impact on the energy crisis whatsoever. Meanwhile, there is an alternative: developing renewable sources of energy, which, in fact, have been seeing vigorous growth both in South Africa and in other African nations.

According to the International Energy Agency, which is a quite conservative entity, almost 4 GW in new renewable capacities will be launched in South Africa by 2016 (in Russian). This would correspond roughly to 40 percent of the nuclear capacity envisioned in the deal with Russia. Kenya is looking soon to start operating 1.4 GW of solar capacities, which will allow the country to cover about a half of Kenya’s energy demand with renewable energy. Ethiopia, too, is developing ambitious renewable energy plans.

kenya solar Solar panels sprouting in remote locations in Kenya. (Photo: moresolarinc.com)

Calculations made by two reputable research institutes published in July show that the price of nuclear electricity following the launch of the eight reactors would be among the highest electricity prices in South Africa – 50 percent higher than for electricity generated from wind and 20 percent higher than for that produced by solar panels or coal plants, in today’s prices. And these were based on the lowest estimate for the envisioned nuclear program, at $40 billion.

Going ahead with the decision to develop nuclear energy will not only mean for South Africa spending what it has now, but will, furthermore, force it into enormous debt. And it will undoubtedly be a kiss goodbye to further development of renewable sources, which could help the country overcome its energy crisis now – not 10 or 20 or 30 years in the future.

But on the other side of the scales are the nuclear ambitions of the president of South Africa, reinforced lavishly by his friendship with his Russian counterpart, Vladimir Putin, and that could tip the balance when the strategic decision on the country’s future is being made. South Africa’s last nuclear project – a PBMR reactor – was under discussion for twenty years, but eventually never came to be. It remains to be seen what South Africa chooses this time.

Vladimir Slivyak is co-chairman of the Russian environmental group Ecodefense. This comment was written in Johannesburg, South Africa, where the author has been on an extended visit helping the local environmental NGO Earthlife Africa mount an awareness campaign about the economic and environmental risks of nuclear power. Originally written in Russian, this piece was initially published on the website of the radio station Echo Moskvy and was translated into English for publication by Bellona.

 

Vladimir Slivyak

ecodefense@gmail.com

Maria Kamentskaya