Challenges Ahead For South Africa’s R250-Billion Nuclear Power Plan

South Africa’s ambitious plan to procure 2,500MW of new nuclear power has been estimated to cost R250 billion.

This initiative, spearheaded by the Minister of Electricity and Energy, Kgosientsho Ramokgopa, aims to secure national treasury approval by August 2024.

However, energy expert Hartmut Winkler has raised significant concerns regarding the feasibility of securing the necessary funding for this project.

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According to Winkler, the R250 billion estimate only covers the construction costs, excluding the expenses associated with servicing the station. Drawing comparisons with similar projects in Bangladesh and France, Winkler emphasizes the potential financial burden.

“The country would most probably need to secure a major loan. The station would also then need to be serviced later and add to the cost,” he explained during an interview with Newzroom Afrika.

Winkler further speculated that the national treasury is unlikely to approve such a massive expenditure.

“If it happens, it’s still got to go through a huge number of processes. It’s not just the treasury approval; it’s far more than that,” he stated, expressing skepticism about the project’s eventual approval.

In January 2024, Minister Ramokgopa gazetted a determination that confirmed the government’s commitment to procuring additional nuclear power.

The document outlines that the procurement process will be transparent, competitive, and cost-effective, potentially involving Eskom or other private entities.

Ramokgopa highlighted that Eskom’s experience with the Koeberg plant positions it as a likely operator for the new nuclear station.

He also mentioned that internal discussions are ongoing regarding the type of technology to be deployed, with a focus on rapid deployment, cost efficiency, and advanced effectiveness.

The electricity minister said, “We are starting the process of gazetting, so we are triggering essentially a procurement process.

“We are going out to ensure that we are able to get that additional 2,500MW of nuclear capacity to ensure that we are able to meet the issues of national security and energy sovereignty.”