South Africa in Early Stages of Nuclear Power Deal with Russia

South Africa's nuclear cooperation deal with Russia is part of a tender process that will involve other competing countries.

This is according to government officials who also said that it is not a contract to build power plants.
The Russian atomic agency Rosatom said on Monday it had signed a 10 billion dollar deal with Pretoria to install 9.6 gigawatts of nuclear capacity by 2030 to help Africa's most advanced economy cope with chronic electricity shortages.

However, South African government officials said the agreement was still in the early stages, after the main opposition party criticised the deal.

"There will be a South African procurement process of course. There will be other inter-government agreements signed," Xolisa Mabhongo, an executive at South African state agency Nuclear Energy Corporation, said from Vienna, where the agreement was signed.

The bidding process would be completed by mid-2015 before any final contracts were signed, officials said.

"They (Rosatom) jumped the gun," a senior South African government source, who is part of the country's delegation to an International Atomic Energy Agency conference in Vienna, told Reuters.
"These kinds of inter-governmental agreements are standard with nuclear vendor countries. We foresee that similar agreements will be signed with other nuclear vendor countries, France, China, Korea, the US and Japan."

South Africa has an energy plan in place to build six new nuclear power plants by 2030, providing 9,600 megawatts (MW) of power at a cost estimated between 400 billion rand and one trillion rand.
But the energy department said last December it may delay the programme and focus instead on coal, hydro and gas as alternative energy sources.

On Tuesday, South African energy analysts and opposition parties criticised the Rosatom agreement, saying the government was making expensive "backroom deals" which flouted procurement procedures.

"My suspicion is Rosatom are talking up their side and it has been very badly handled by our government," the opposition Democratic Alliance's Lance Greyling said.

"It is also worrying that the announcement first came from Rosatom. It suggests backroom deals going on."

South Africa's credit rating could be threatened if it commits itself to nuclear installations it cannot afford, Nedbank economist Dennis Dykes warned.

"Hopefully ... there will be a lot more transparency before we actually have a final decision made," he said.

South Africa is struggling to meet rising electricity demand due to ageing infrastructure and its failure to build new power plants in over two decades.

The government recently said it had approved a support package for state-run power utility Eskom, which will see the company raising over four billion dollars in additional debt and receiving an equity injection from the state.

South Africa has one nuclear power station that provides around five per cent of the country's 42,000 MW of installed generating capacity. Nearly all the rest comes from coal.

SOURCE: http://www.cnbcafrica.com/news/resources/2014/09/24/sa-russia-power-deal/