South Africa Concludes Large-Scale, Non-Transparent Nuclear Deal with Rosatom

On September 22, 2014, South Africa signed a partnership agreement with Rosatom for the construction of up to eight VVER-type nuclear reactors with a total capacity of 9,600 megawatts (MW).  The agreement implies Rosatom has been selected as the preferred bidder after it submitted a $40 to $50 billion proposal in November 2013 that included covering at least one third of the price and additional Russian bank financing. (The competition included Toshiba/Westinghouse, Areva, Korea Electric Power Corporation and Guangdong Nuclear Power Holding Company).  Initial estimates put the cost of construction per reactor at roughly $5 billion.

Just days after the partnership agreement was signed an unnamed South African government official indicated that the deal was essentially finalized and the details were to be kept secret.  The Department of Energy and the Nuclear Energy Association of SA (Necsa) later walked back the statement, indicating there was no procurement deal finalized, just a country-to-country framework agreement. 

There is media speculation that South Africa President Jacob Zuma had ‘‘‘hidden reasons‘ for concluding this deal in a non-transparent fashion, pursuant to his lengthy visit to Moscow for meetings with President Putin last month. 

Deal ‘‘‘sweeteners‘ reportedly included the education of South African nuclear specialists at Russian Universities, some $10 billion in promised orders for South African firms, development assistance for South Africa‘s nuclear infrastructure and the side construction of a joint Russian-technology-based multi-purpose research reactor.