Nuclear energy vendor Rosatom says the recent intergovernmental agreement between the Russian Federation and South Africa is “not a deal”, but merely a broad outline of what the company and Russia have to offer South Africa in the area of nuclear energy.

Regional VP: sub-Saharan Africa Viktor Polikarpov tells Engineering News that Rosatom has “no intention of jumping the gun” and is more than willing to participate in an “open, unbiased and transparent” procurement process. The South African government will prescribe the rules of any future procurement process and Rosatom “will abide by those rules”.

Polikarpov, who only recently joined Rosatom’s Sandton office, having previously worked for minerals group Renova as part of its African business development team, admits that the wording of the press statement released on September 22 did leave room for misunderstanding and misinterpretation.

In the joint statement, Rosatom and the Department of Energy (DoE) said: “[The] agreement lays the foundation for the large-scale nuclear power plants (NPPs) procurement and development programme of South Africa based on the construction in South Africa of [up to eight] new NPPs with Russian VVER reactors with total installed capacity of up to 9.6 GW.” They added: “These will be the first NPPs based on the Russian technology to be built on the African continent.

The DoE subsequently clarified that no deal had been signed to procure reactors from Rosatom and indicated that the agreement formed part of a “preparatory” phase ahead of an eventual procurement process, for which no firm date had been set.

The department also said a similar agreement had already been signed with South Korea and that future nuclear agreements were likely to be concluded with other vendor countries and companies, including France, Japan, China and the US.

Polikarpov argues that such agreements are not uncommon for either the South African government or Rosatom, which is actively pursuing a policy of globalisation and is in the process of building 28 VVERs inside and outside Russia and is bidding on a further 22 units.

He expects that the South African government will make the contents of the agreements public ahead of any procurement process. He also confirms that the agreement covers aspects such as 60% localisation, supported by investments of up to $10-billion to build a nuclear industry; skills development; technology transfer; and financing. It also deals with a possible new research reactor and aspects relating to the development of a nuclear-fuel cycle.

Rosatom has three broad financing models, including the sale of its solution to a domestic utility, taking equity stakes in nuclear plants and pursuing projects on a build, own and operate (BOO) basis. Polikarpov indicates that the BOO solution is the most likely for South Africa and adds that it is likely to be supported by a State loan from the Russian Federation.

Its offer is also likely to include a strategic partnership arrangement, whereby South Africa could emerge as a nuclear supply hub for Rosatom reactors into the rest of Africa.

“The idea is not to build power plants, but to build a modern nuclear-industry cluster in South Africa,” Polikarpov explains, adding that he believes its value proposition will be a compelling one once the procurement process is started.

He acknowledges that Rosatom’s reputation may have been “tarnished” by the way the announcements was handled, but says the group “does not engage in politics” and remains committed to pursuing the South African market opportunity.