France reveals nuclear funding strategy for SA

Mar 14 2016 07:18
Matthew le Cordeur

Paris – In its bid to win the 9 600 MW South African nuclear build programme, the French will propose a funding model that seeks assistance from international and domestic financial partners.

France, through EDF and Areva, will likely seek funding assistance from other countries like China, as well as Eskom and South Africa’s intensive energy users to fund the upfront costs of the programme.

However, Envoy of the French President for the nuclear partnership, Dr Pascal Colombani, explained that the full 9 600 MW would unlikely be rolled out at once, so the upfront cost should not be as high as previously quoted in the press.

Speaking to media in France last week, he referred to President Jacob Zuma’s State of the Nation address, in which he said nuclear energy would be rolled out at a pace and scale the country could afford.

France will await the request for proposals, which will be announced by the end of March, before finalising its funding model. While the overall proposal is not complete, Colombani said it “is in good shape”.

The French told media that its rates will be close to OECD standards, adding that it won’t propose giving dangerous loans such as below sub-prime as this will be too risky to delivery. “You must look carefully at what you're buying,” an official said. “You must examine how much safety, technology, and control you have over your product.”

The other countries seeking to win the lucrative deal include Russia, China, South Korea, the US and Japan.

France facing challenging times

EDF, which will head up the bid for France, is currently facing criticism over its nuclear new build project in the UK, while Areva announced a €2bn loss for 2015 ahead of restructuring plans.

Last week, finance director Thomas Piquemal quit after clashing with CEO Jean-Bernard Lévy over plans to push ahead with EDF’s flagship R392bn Hinkley Point C nuclear project in the UK, which Piquemal wanted to delay or pull out of. In this project, EDF reached an agreement to get China General Nuclear Power Corporation (CGN) to take a 33.5% stake in the project.

The Financial Times said the French utility’s share price had lost 54% in the 12 months to date last week, due to a drop in electricity prices and lower demand for nuclear generation.

EDF’s own Flamanville 3 nuclear plant in France should already be connected to the grid, but the project, which is six years late and €7.2bn (R121bn) over budget will now only connect to the grid at the end of 2018. A French official told South African media that this was normal for a first-of-a-kind Generation 3 reactor, explaining that their latest projects are speeding up. “We are learning fast.” 

“Areva plans to create a new group later this year - currently referred to as ‘New Areva’ - that will bring together all its fuel cycle operations: mining, chemistry, enrichment, recycling, dismantling, logistics and related engineering,” reported World Nuclear News.

* Fin24 was a guest of the French government. France's Areva is one of the bidders for SA's proposed nuclear build programme.

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areva  |  eskom  |  nuclear energy  |  sa nuclear deal



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