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Russian Firm Says Nuclear Programme Could Mean ‘Big Gains’ For South Africa

Russian Firm Says Nuclear Programme Could Mean ‘Big Gains’ For South Africa

By Lynley Donnelley | From Mail & Guardian Africa

Despite concerns over the potential cost of South Africa’s nuclear procurement programme, Russian state nuclear firm Rosatom believes it could mean big financial gains for the country.

Presenting at the 2016 Nuclear Africa conference, on Wednesday, Rosatom project manager Irina Manina, gave the firm’s estimates of the economic benefit the nuclear programme could provide.

In terms of employment, the nuclear programme could create 10 200 jobs during construction, 10 000 jobs in related industries and consumer goods, and just over 5700 jobs during the operation of new nuclear plants.

Rosatom estimates that the nuclear programme would add $22.8-billion in gross value added to the economy, tax income of $3.8-billion during construction and $48.7- billion.

Meanwhile the benefit to local subcontractors directly involved could be in the order of $21-billion.  South Africa plans to procure 9600MW of nuclear power, as set out in the integrated resource plan (IRP) of 2010.  The costs of these nuclear ambitions are estimated to be between R400-billion to R1-trillion.

Affordability a concern

The affordability of nuclear is one of the key concerns for critics of the programme. The plan has been controversial for other reasons, including the failure of government to endorse a revised draft of the IRP, which contains updated economic information underpinning the policy, and recommends a delay to timelines for nuclear procurement.

South Africa is facing numerous economic challenges, placing the government’s budget under ever growing pressure. It faces further credit ratings downgrades, which will relegate South Africa’s debt to sub-investment grade or junk status. This will have serious implications for the country’s cost of borrowing and its ability to finance a new nuclear build programme.

Ratings agency Moody’s is in the country to assess South Africa, after placing it on review for a downgrade.  While in the country, Moody’s said it would explore “the implications of expensive schemes, such as nuclear energy and National Health Insurance, for the government’s finances in an environment of rising interest rates.”

Read more at Mail & Guardian Africa