Egypt Hopes for Russia's Nuclear Plant Construction

Published on 16th June 2020

Last October 2019, during the first Russia-Africa Summit, Russian President Vladimir Putin and Egyptian President Abdel Fattah al-Sisi reaffirmed commitment to scale-up cooperation in various economic sectors and particularly expedite work on the special industrial zone and the construction of proposed four nuclear power plants, raising hopes for an increased power supply in Egypt.

On October 23, Putin told the Egyptian delegation: "As for our bilateral relations, we continue to implement ambitious projects that have been coordinated by us, including a nuclear power plant and an industrial zone in Egypt. We are working very actively in these areas, and we are planning to invest $190 million in infrastructure development projects and to attract up to $7 billion."

In his response, Abdel Fattah el-Sisi warmly expressed gratitude for holding the first Russia-Africa Summit. 
"I would like to point out that we view Russia as a reliable partner of the African continent. We hope very much that Russia will be working in Africa in all spheres and fields, including in that of the development, as well as in the financing of infrastructure projects on the continent and in particular in energy and road construction," the Egyptian leader told Putin.

Abdel el-Sisi continued: "I would like to assure you of our high appreciation of our bilateral relations, which are developing in various formats, especially after we signed a comprehensive cooperation agreement. We sincerely hope that our relations will continue to develop in all fields and spheres."

"As for the nuclear power plant, we set a high value on our bilateral cooperation. We strongly hope that all topics related to this project will be settled without delay so that we can start implementing the project in accordance with the signed contract. Mr President, we hope that the Russian side will provide support to nuclear energy facilities in Egypt so that we can work and act in accordance with the approved schedule," he added, in conclusion.

Related Russian ministries, departments and agencies are usually tasked to coordinate and implement bilateral agreements. In the case of nuclear power, State Atomic Energy Corporation, popularly referred to as Rosatom, is the main player. Rosatom has shown business interest in Africa. Over the past two decades, it has signed agreements that promised construction of nuclear energy plants and training of specialists for Africa. Rosatom has been cooperating with more than 20 African countries, in particular, building the largest "El-Dabaa" NPP in Egypt with an installed capacity of 4.8 GW. 

Director General Alexey Likhachev notes that more reliable, affordable and stable energy is the basic condition for achieving sustainable development goals. "We can make a qualitative breakthrough in Africa in terms of technological development and the use of nuclear technology in the next few years," he says. 

According to Reuters, the Egyptian Electricity and Renewable Energy Minister Mohamed Shaker said earlier at the International Atomic Energy Agency's ministerial conference that Russia had asked for $12 billion for the nuclear plants, a reliable solution for energy deficit. In this regard, the development of nuclear energy is important for Egypt.

"We made significant strides in the preparation of all strategic agreements [regarding the construction of a NPP in Egypt] with our strategic partner, Russia. We have also completed all technical, financial and legal aspects," he said.

Egypt decided to build an NPP due to the need to redress the energy balance to reduce emissions of greenhouse gases and to save hydrocarbons which the country has earmarked for petrochemicals. "We have few traditional sources of electricity generation. The potential of hydro energy is gradually waning. Following the adoption of a special plan to cut greenhouse gas emissions we stopped using coal plants, however, energy consumption will grow," according to the Minister.

Nuclear deals with Russia:

Egypt has been considering the use of nuclear energy for decades. The Nuclear Power Plants Authority [NPPA] was established in 1976, and in 1983 the El Dabaa site on the Mediterranean coast was selected. Egypt's nuclear plans, however, were shelved after the Chernobyl accident. In 2006, Egypt announced it would revive its civilian nuclear power program, and build a 1,000 MW nuclear power station at El Dabaa at an estimated cost of $12.5 billion. In March 2008, Egypt signed an agreement with Russia on the peaceful uses of nuclear energy. 

Early February 2015, President Putin and President Abdel Fattah el-Sisi signed an agreement to set up a nuclear plant in Dabaa, on the Mediterranean coast, west of the port city of Alexandria, where a research reactor has stood for years. 

Russia and Egypt Courtship

Egypt's dream of building a nuclear plant has spanned several years, with agreement that was signed [as far back in March 2008] during an official visit to the Kremlin by the ousted Egyptian President Hosni Mubarak, and then through another former Egyptian leader Mohammed Morsi who discussed the same nuclear project with Putin in April 2013 in Sochi, southern Russia.
Mohammed Morsi had sought $4.8 billion loan from International Monetary Fund [IMF], and an unspecified amount of loan from Russia to build the nuclear power plant. He hoped Russia would accelerate and expedite efforts, and provide financial backing for the project during his political administration.  The same year, following the revolutionary events and after a wave of mass anti-government actions, the army outsted the Moslem Brotherhood and their leader Mohammed Morsi, resulting in postponing or suspending the nuclear construction agreement. 

Renewable Energy Sources

Egypt is classified as having a high power system size [24,700 MW installed generation capacity in 2010 with more than 40 grid-connected plants]. As of 2010, 99% of the Egyptian population has access to electricity.

Since the early 2000s, power outage rates and durations, as well as distribution system losses, have trended downwards indicating that distribution companies have improved their overall customer service quality over the past decade; however, Egypt has seen a great weakening in its supply security. The power system's generation reserve capacity declined from 20% in the early 2000s to 10% by the 2010s.

The weakening of Egypt's supply security has caused widespread social issues. To deal with the extremely high demand for electricity, rolling blackouts and power cuts were implemented throughout the summer of 2012 causing great tension between the government and the people of Egypt.

The current energy strategy in Egypt [adopted by the Supreme Council of Energy in February 2008] is to increase renewable energy generation up to 20% of the total mix by 2020. The energy mix includes the use of hydropower, solar wind and nuclear. There are four main hydroelectric generating stations currently operating in Egypt. Experts have questioned why Egypt could not maximize the use of the river Nile that stretches 6.695 kilometers, especially for agricultural, industrial and generating energy for the region. Egypt has a high solar availability as a result of hot desert climate. Egypt has a high potential for wind energy, especially in the Red Sea coast area. As of 2006, 230 MW of wind energy was installed, and again 430 MW of wind power was installed in 2009.

In March 2015, British Petroleum [BP] signed a $12 billion deal to develop natural gas in Egypt intended for sale in the domestic market starting in 2017. Egypt is an important non-OPEC energy producer. It has the sixth largest proved oil reserves in Africa. Over half of these reserves are offshore reserves. Although Egypt is not a member of OPEC, it is a member of the Organization of Arab Petroleum Exporting Countries. 

Swinging for Nuclear Power

Lack of electricity supply is a huge restraint on African economies and specifically for Egypt, nuclear power could be an excellent source of large-scale grid electricity. Nuclear is not expensive compared with other energy sources. But for African countries to develop nuclear power, the governments must first establish the necessary legal and regulatory framework. The project must comply with all international standards and regulations on nuclear power. Africa has a shortage of skills for nuclear power so developing nuclear power would necessarily mean increasing skills in the field.

Egypt shows high optimism toward adoption of nuclear power as an important and indispensable source of energy that will underpin sustainable growth of the economy in the country. The four blocks of the nuclear power plant will cost about $20 billion, according a website report of the Egyptian Ministry of Electricity and Renewable Energy. Media reports have also revealed that nuclear companies from China, the United States, France, South Korea and Japan seek to take part in international tender.

Egypt's Economic Potentials

With over 100 million inhabitants, Egypt is the most populous country in North Africa. Egypt is the third most populous country after Nigeria and Ethiopia in Africa. About half of Egypt's residents live in urban areas, with most spread across the densely populated centers of greater Cairo, Alexandria and other major cities along the Nile Delta. 

The economy has been transforming from one based upon agriculture to an economy with more emphasis on the services sector. Egypt's economy mainly relies on income from  tourism, remittances from Egyptians working abroad, revenues from the Suez Canal and  foreign aid. 

With one of the largest and most diversified economies in the Middle East, which is projected to become one of the largest in the world in the 21st century, Egypt has the third largest economy in Africa. Egypt is a founding member of the United Nations, the Non-Aligned Movement, the Arab League, the Organization of Islamic Cooperation and the African Union. 

By Kester Kenn Klomegah
The author writes frequently about Russia, Africa and the BRICS.

 


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