Rosatom’s recent deal with Egypt to build a 4800 MW capacity nuclear plant is one of the largest nuclear energy deals in this century, writes Dan Yurman nuclear energy specialist and author of the Neutron Bytes blog. It is one of several giant nuclear projects taking shape in the Middle East, Yurman notes.

It is one of the largest nuclear energy deals (4800 MW) inked so far this century and is similar in scale as a project in terms of electricity generation capacity to the four 1400 MW units being built by South Korea in the UAE.

Assuming these two projects, and a 4800 MW project in Turkey, are finished by the end of the decade, new nuclear capacity in the Middle East will total over 15,000 MW of electrical generation capacity.

A unique deal

Russia’s State Atomic Energy Corporation “Rosatom” is reported to have signed contracts with Egypt for construction of four 1200 MW VVER type nuclear reactors, the company’s chief announced this month.

Alexey Likhachev said that Rosatom signed commercial deals with Egypt worth $60 billion to construct the Dabaa nuclear power plant as well for its maintenance and supplies of nuclear fuel.  The $60 billion figure is apparently a life cycle cost with the reactors themselves costing about $29 billion.

“These contracts are the first-ever in the nuclear industry and are Russia’s largest non-crude products export agreement”

The nuclear plant will be built with a Russian loan of up to $25 billion at an annual interest rate of three per cent. The payment schedule will be 35 years. Egypt will provide the remaining 15 percent of the costs in cash.

“These contracts are the first-ever in the nuclear industry and are Russia’s largest non-crude products export agreement,” Russia Today (RT) quoted Likhachev as saying. “This is certainly a very big contribution to the development of Russian-Egyptian relations.”

Russia will also build factories in Egypt for the domestic manufacture of nuclear plant components, bringing in the required expertise; and Rosatom will service the plant for 60 years.

According to the Egyptian energy minister, Mohamed Shaker, the plant is due to be completed by 2026-2027. The Dabaa coastal site is located about 200 miles west of Cairo.

According to the World Nuclear Association (WNA), these are the first commercial nuclear reactors to be built in Egypt and only the second such facilities to be built on the African continent [the first outside of South Africa]. In addition to the construction of the reactors, infrastructure investments will be needed in regional transmission grids and local power lines.

The nuclear power will be needed as Egypt has been running short of natural gas to generate electrical power

The new plant will require 1500 km of 500 kV transmission line. The government owned utility NPPA expects to have four nuclear desalination plants operating by 2025.

Rosatom plans to move spent fuel from the reactors wet to dry storage as quickly as possible and then to return the spent fuel to Russia for reprocessing. Nonproliferation experts are concerned about the project. WNA reports that Egypt signed the Nonproliferation Treaty in 1968, but until 1981 refused to ratify it unless Israel did. It has not signed the Additional Protocol.

An alternative for natural gas

WNA points out that the nuclear power will be needed as Egypt has been running short of natural gas to generate electrical power.

WNA reports that Egypt has long been reliant on natural gas for power generation. Annual domestic production of gas peaked in 2009 at 62.7 billion cubic meters (bcm), and had declined to 41.8 bcm by 2016. Over the same period, the country’s gas consumption rose from 42.5 to 51.3 bcm.

Supply constraints have arisen after the government halted new exploration contracts in 2013. As a result, there are now significant gas supply constraints, particularly for heavy industry, as the government has shifted supplies to domestic consumers.

The units to be built in Egypt are similar to the four 1200 MW VVER nuclear reactors Rosatom is building in Turkey at the Akkuyu site on the country’s Mediterranean coast. That plant is being financed 50/50 between Rosatom and Turkey.

Problems have arisen there over local financing which remain unresolved, but the project has broken ground. Issues are over guarantees for rates and are a key item. Roastom’s financial deal there is to build and operate the plant for 15 years and then sell it to equity investors.  The cost of the project in Turkey is estimated to be about $30 billion.

Editor’s Note

 Dan Yurman is a nuclear expert and publisher of the blog NeutronBytes.

 This article was first published on Dan Yurman’s blog Neutron Bytes and is republished here with permission.

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