The Department of Environmental Affairs (DEA) has granted authorisation to State-owned power utility Eskom to build a new 4 000 MW nuclear power plant in the Western Cape, according to a letter seen by Reuters.

Construction at Duynefontein, close to South Africa's only existing nuclear site Koeberg, will only go ahead once the National Nuclear Regulator (NNR) has granted an installation site license, the letter from the government to Eskom said.

"The project comprises the construction and operation of a Generation III pressurised water reactor type nuclear power station of up to 4 000 MWe, comprising two or three nuclear reactor units and associated infrastructure," the letter from Sabelo Malaza, a chief director in the department, said.

A department spokesman did not immediately respond to requests for comment.

The new plant is located north of Koeberg, Africa's only commercial nuclear power station.

Eskom wants to add 9 600 MW of nuclear capacity – equivalent to up to ten nuclear reactors – to help wean the economy off polluting coal in what could one of the world's biggest nuclear contracts in decades.

In April, a South African pact with Russia's Rosatom to build nuclear reactors was deemed unlawful by a court and there are also concerns over the cost of the plans and their transparency.

Nuclear reactor makers including Rosatom, South Korea's Kepco, France's EDF and Areva, Toshiba-owned Westinghouse and China's CGN are eyeing the South African project, which could be worth tens of billions of dollars.

Eskom welcomed the authorisation on Friday, saying that at the beginning of the project, five sites were considered. Eskom's preferred choice for the site was Thyspunt along the east coast.

However, environmental activists who successfully challenged the government's nuclear programme in court said they were studying the environmental permit and would probably appeal.

"This is creating regulatory confusion and chaos because you might end up with one authority who has authorised and the other one, the NNR, may potentially come to a different decision and say it is too risky and shouldn't go ahead," said Liz McDaid, of the Southern African Faith Communities’ Environment Institute.