Russia provides Egypt loan for nuclear power construction


At the last international parliamentary conference ‘Russia – Africa in a Multipolar World’ held on March 20 under the auspices of the State Duma of the Russian Federal Assembly, Russian President Vladimir Putin indicated in his speech that the partnership between Russia and African countries has gained additional momentum and is reaching a whole new level, and further added that “Russia would continue helping African countries with electricity production, which so far covers only a quarter of the continent’s needs.”

According to the transcript made available at the Kremlin website, Russia is offering new environmentally friendly technologies, primarily in nuclear energy. Rosatom is already building a nuclear power plant in Egypt and plans to expand its involvement in the development of the national energy systems of the African continent. And that Russia, in some countries, would provide 100-percent funding of these nuclear projects.

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. The deal was signed after a comprehensive bilateral discussion held and both expressed high hopes that Russia would help construct the country’s first nuclear facility.

The Egyptian Ministry of Electricity and Renewable Energy first signed the agreement and development of the nuclear plant construction project in February 2015 with Russia’s Rosatom. The agreement indicates the construction of four power blocks, each with 1,200 megawatts of capacity.

Sergei Kiriyenko, then the head of Rosatom, said at that time that as soon as the technical and commercial details of the project were finalized, sources of finance would be worked out or considered. Its estimated cost, at the time, was $12.5 billion, and the plans were to undertake the construction with the help of foreign investors.

After several negotiations and renegotiations since 2015, Russia resigned finally the contract for the nuclear construction during the first Russia – Africa summit. Seated in a sizeable conference hall on October 23, Russian President Vladimir Putin and Egyptian President Abdel Fattah el-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.

Egypt attaches great importance in its relations with Russia. But what is particularly important for their bilateral relations, Abdel el-Sisi assertively reminded: “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.”

Rosatom’s Director General, Alexey Likhachev, also emphasized at the first Russia-Africa summit that Rosatom has been cooperating with more than 20 African countries. In fact, Rosatom has shown business interest in Africa. Over the past two decades, at least, it has signed agreements that promised construction of nuclear energy plants and training of specialists for these countries.

Desirous to show some policy achievements at the forthcoming second Russia-Africa summit rescheduled for late July 2023; Russians are rushing to lay the first concrete for the second unit of the El Dabaa Nuclear Power Plant in the Arab Republic of Egypt.

The total cost of construction is fixed at $30 billion. The parties signed an agreement to provide Egypt with a loan of $25 billion for the construction of the nuclear power plant which covers 85% of the work. The remaining expenses will be covered by the Egyptian side by attracting private investors. Under the agreement, Egypt is to start payments on the loan, which is provided at 3% per annum, in October 2029.

El-Dabaa is the first nuclear power plant in Egypt and the first major project of Rosatom in Africa. Egyptian media have quoted the Head of the Egyptian Nuclear Power Plants Authority, Amjad Al-Wakeel, as saying concrete was laid for the second reactor in November 2022.

According to the project estimates by Rosatom, construction of all four NPP units is planned for completion by 2028-2029. The description made available on its website, State Atomiс Energy Corporation, popularly referred to as Rosatom, is a global leader in nuclear technologies and nuclear energy.

Our monitoring and research show that Russia and Egypt signed an intergovernmental agreement on the construction of an NPP far back in November 2015. The contract for engineering, procurement, and construction of the El Dabaa NPP was signed on December 31, 2016. But the loan was made available only in 2022.

In his speech at the parliamentarian’s conference, Putin referred to “large Russian investment projects are being implemented in Africa, and will continue to help African countries with electricity production, which so far covers only a quarter of the continent’s needs.”

Long before this event, many experts have criticized Russia’s policy in Africa. For instance, writing under the title “Russia’s Policy Towards Africa” back in September 2019, Institute of African Studies researcher Olga Kulkova explicitly noted that Russia has strengthened its presence in Africa over the past few years. It has signed new agreements with several countries there, including on cooperation in the field of military technology, security and counterterrorism.

“This has reinforced Russia’s traditionally friendly ties with its African partners, after its sudden withdrawal from Africa in the early 1990s which was, indeed, a strategic blunder. But Russian authorities have become fully aware of these primary policy mistakes. Now is the time to revitalize and rebuild the old ties and also important to forge new ones. Russia’s policy towards Africa can be described as unique, but it has fewer financial and economic opportunities for implementing its policy on the continent compared to that of China,” Olga Kulkova wrote in her report.

According to reports, Russia has also signed for such construction of nuclear plants in a number of African countries but unsuccessful in implementing its side of the agreements during the past decade. These include agreements with Algeria (2014), Ghana (2015), Ethiopia (2019), Republic of Congo (2019), Nigeria (2012, 2016), Rwanda (2018), South Africa (2004), Sudan (2017), Tunisia (2016), Uganda (2019) and Zambia (2016). Memoranda of Understanding (MOUs) were signed with Kenya in 2016 and Morocco in 2017.

Ryan Collyer, the Regional Vice-President of Rosatom for Sub-Saharan Africa, told this author that energy (construction and repair of power generation facilities as well as in peaceful nuclear energy and the use of renewable energy sources) is an important area of the economic cooperation between Russia and Africa.

According to him, with reference to Egypt, the plan is to commission four power units with VVER-1200 type reactors with a capacity of 1200 MW each by 2028. “We will supply nuclear fuel throughout the entire NPP life cycle (60 years), provide training services, and carry out maintenance and repairs within ten years after each unit’s start. With our initial agreement signed in 2015, and necessary infrastructure still being put in place, the El Dabaa project is firmly underway,” he said.

Ryan Collyer further explained that a nuclear power program is a complex undertaking that requires meticulous planning, preparation, and investment in time, institutions, and human resources. The development of such a program does not happen overnight and can take several years to implement.

According to his explanation, another critical question is the cost. Most of the funds are needed to during the construction period. Building a large-scale nuclear reactor takes thousands of workers, massive amounts of steel and concrete, thousands of components, and several systems to provide electricity, cooling, ventilation, information, control and communication.

With over 100 million population, Egypt is the most populous country in North Africa, popular referred to as Maghreb region and part of the Arab World. Egypt is the third most populous country after Nigeria and Ethiopia in Africa. About half of Egypt’s population live in urban areas, mostly spread across the densely populated centers of greater Cairo, Alexandria and other major cities along the Nile Delta.

Many policy researchers and analysts have written about Russia’s financial capabilities in implementing bilateral policy projects in Africa. Their common observations are that for the past three decades since the collapse of the Soviet era, Russia has not been a major economic giant in Africa compared to Western and European countries and Asian partners such as China.

During these several years, there have been little tangible results from Russia’s grandiose economic diplomacy. A lot more important issues have received little attention since the first African leaders summit. Its policy model is limited to military-technical cooperation. With the current evolving geopolitical processes, stringent sanctions due to its ‘special military operation’ and its focus on these, Russia is unlikely to commit high financial resources to the development challenges facing African countries.

South African Institute of International Affairs (SAIIA), a policy think tank, suggested in its recent latest report that Africa needs to forge a unified approach to Russia before 2023 Russia-Africa summit. It highlighted the need for the development of a continental Russian strategy to avoid becoming a pawn in global power games.

Perhaps, the most important way forward is for African countries to work in cooperation with one another. Thus, developing relationships beyond short-term impact is critical to ensure the continent is not dominated by other global powers’ interests. Overcoming passivity could involve the following steps: Africa urgently needs a Russia strategy. To that end, the African Union (AU) can – and should – engage with its members in a more structured manner and help them put together joint positions on critical issues related to Russia and other partners, like the United States, China, Europe and others.


Please enter your comment!
Please enter your name here