It’s Back: South Africa Invites Foreign Financing ‘Solutions’ On Nuclear Fleet, Cites Koeberg Success

By Dana Sanchez Published: December 22, 2016, 12:46 pm
nuclear fleet South AfricaKoeberg nuclear plant at Melkbosstrand, South Africa. Photo: eNCA

South Africa has formally jump-started its seemingly stalled nuclear build program with a request for information from potential foreign contractors that includes financing solutions on building a new fleet of nuclear power stations.

“This request for information is the first step leading to the appointment of one or more foreign specialist suppliers who will work with the South African team in the construction of the new fleet of nuclear power stations‚” the government said in a statement Tuesday, Times Live reported.

South Africa’s Koeberg nuclear power station, located 30 kilometers north of Cape Town, is the only one in the country and the entire continent. Koeberg is owned and operated by South Africa’s national electricity supplier, Eskom. Its two reactors are the cornerstone of the South African nuclear program.

Eskom generates about 95 percent of the electricity used in South Africa and about 45 percent of the electricity used in Africa.

Eskom released the request for information for 9,600MW of new nuclear power generation capacity, but said it has not begun the procurement process, Moneyweb reported.

The government has missed several deadlines this year for releasing bid documents amid concern about the affordability of nuclear for South Africa.

The government recently appointed Eskom and the South African Nuclear Energy Corporation (Necsa) as joint procurement agents. In November, Eskom acting CEO Matshela Koko said bid documents would be released before the end of the year. Eskom confirmed they would be released on Dec. 15. That deadline passed.

On Tuesday, Koko tweeted, “Eskom describes the RFI as a stand-alone information-gathering exercise that ‘seeks to gather information including experience related to recent nuclear project capacities and costs, proposed financing solutions and localisation opportunities,'” according to Moneyweb.

The South African government delayed the release of the request for proposals for the nuclear build program following reports that senior politicians – including President Jacob Zuma  – had met in secret with Russian stakeholders to arrange the deal, Biznews.com reported in October:

Environmental groups have warned that the nuclear build program could bankrupt the country. There are also concerns that the project will benefit individuals linked to President Jacob Zuma. South Africa’s nuclear state agency Necsa has denied that Rosatom is a front-runner in what is an “open race.” Rosatom, meanwhile, stands ready to submit a bid.

Russian government-controlled news agency Tass put out its own press release following the announced request for information, saying companies from five countries including Russia are expected to place their bids. “We welcome the release of the request for information and remain an interested party,” said Victor Polikarpov, Rosatom regional vice president of sub-Saharan Africa.

France, U.S., China and South Korea are also interested, Eyewitness News reported.

Russia spelled out some of the delays South Africa has made in the nuclear program procurement process: “South Africa…was expected to announce a … construction tender in 2008 in a bid to reduce its reliance on ageing coal power stations. The announcement was postponed until 2014 and later delayed again until the first quarter of 2016,” Tass reported.

Despite the delays, Eskom said South Africa should stick to its original plan of bringing a new nuclear power plant online by 2025, Reuters reported. Energy analysts have said the 9,600 MW plan was ambitious time-wise, and unnecessary. Zuma opponents raised concerns about a lack of transparency in deals which could cost $80 billion.

Several meetings between Zuma and Russian President Vladimir Putin over the last two years led to speculation that Rosatom had won the contract before the public tender was launched. South Africa’s government and Rosatom denied this.

The government’s nuclear program also faces public opposition. South African Faith Communities Environment Institute and Earthlife Africa Johannesburg hoped to overturn the nuclear build program in court, according to Reuters.

As recently as Dec. 13, Forbes reported that “the stalemate over the proposed nuclear reactors to power the continent’s most advanced economy shows no sign of being resolved.”

But one thing South Africa has on its side is experience.

“Over 40 years ago‚ in collaboration with foreign partners‚ South African embarked on the construction of Koeberg nuclear power station. That decision turned out to be a great success. This time around we can do even better,” said Kelvin Kemm, chairman of the  South African Nuclear Energy Corporation. “This is an exciting move that this major initiative is now underway.”

Eskom also talked Tuesday its successes‚ saying that it “and Necsa have a proud record in the safe management of nuclear facilities and have through this gained valuable experience to manage a program of this nature,” Times Live reported.

The request for information asks countries that want to submit bids to supply nuclear power station technology to South Africa to show their intentions to bid by answering some questions. The RFI process closes April 28.

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