I was a panellist at the Africa4Nuclear event at Wits University under the banner “Reimagining Nuclear” on Monday. My topic focused on what signals are needed to attract long-term capital into new energy technologies, including nuclear.
With deputy energy & electricity minister Samantha Graham Mare in the room, I explained that the first signal is policy and regulation. Money flows where there is certainty; investors need predictable, transparent and enforceable regulations.
Policymakers had a 2010 Integrated Resource Plan (IRP) that signalled 9.6GW of nuclear, and the 2019 IRP was silent on this — this was folly and fed into narratives of technologies that are politically motivated. Hopefully, the 2025 IRP will be clear on its nuclear stance in the short and long term.
Nuclear energy requires long-term policy commitments due to its capital intensity and long development cycles. I bemoaned at the height of stage 6 load-shedding in 2023 that if we had executed nuclear, as was designed in the IRP 2010, the first 1.6GW unit would have come online in 2023, all else being equal.
Capital flows also follow bankable feasibility studies and structured procurement programmes. Any SA nuclear programme will have to be bankable on all fronts. The projects will need to be technically feasible, economically and financially viable, and conform to legal and regulatory frameworks, while ensuring a fair, just and equitable society.
In structuring infrastructure projects a fully wrapped engineering, procurement and construction project delivery model is desired, with a clear off-taker guaranteed for the payback period, typically 20 years. This with an operations and maintenance partner and a fuel supply agreement with all the cost escalations and relevant hedging instruments. Almost every risk over a 20-year period must be factored in and accounted for in the financial model, which translates into a tariff.
Infrastructure projects also require derisking instruments such as guarantees, political risk insurance, export credit, blended finance and concessional capital to crowd in private investment and make borrowing cheaper.
Clarity will furthermore be needed in terms of grid access and availability for any nuclear plant. Due to the size of nuclear plants, this may require a buildout of new transmission and related infrastructure. This will depend on siting, servitudes and land access, considering that it needs to be built before the nuclear plant is commissioned.
The 2025 International Atomic Energy Agency’s “Outlook for Nuclear Energy in Africa” report highlights that rapid population growth, urbanisation and economic growth are driving energy demand in Africa. With Egypt (in construction), Ghana, Nigeria and Kenya pursuing nuclear, there is a call for nuclear expertise and the supply chain to be concentrated in Africa.
SA has extensive nuclear experience in running Koeberg, in disposing of nuclear waste, as well as world-class nuclear research & development facilities. SA universities also have a reputation for producing outstanding nuclear physicists who are responsible for cutting-edge nuclear interventions such as the base technology for small modular reactors, powering desalination plants, hydrogen production, medical isotope creation, and remote energy needs such as data centres and mining operations.
Despite the errors of the past (yes, I’m referring to the pebble bed modular reactor), SA should specialise in areas where it has a comparative advantage, by producing goods and services most efficiently. Nuclear medicine, technical expertise, global partnerships, rich uranium deposits, the only operational nuclear power plant in Africa, innovation and keen industrial development are our comparative advantages.
With an expansive coastline, local nuclear expertise with global experience, an established supply chain, increasing electricity demand and a keen interest in nuclear in the region, SA is primed for a resurgence of nuclear.
• Mashele, an energy economist, is a member of the board of the National Transmission Company of SA.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.