Russian nuclear energy agency Rosatom has begun construction on the Dabaa nuclear power plant by conducting measurements of the site, according to Electricity Minister Mohamed Shaker.
The new nuclear plant will work with a production capacity of 4,800 MW and investments worth $25bn.
Shaker said the Russian company started preparations for the establishment of Dabaa nuclear power plant; however, it has not received any financing yet and has yet to sign any contracts. Despite this the on-site preparations are considered legal, he said.
President Abdel Fattah El-Sisi announced during his meeting with Russian president Vladimir Putin, on the sidelines of the G20 summit held in China, that Russia had already started construction of Dabaa nuclear plant.
Shaker added that all the technical procedures and negotiations for the Dabaa plant have been completed and only the legal aspects are waiting to be decided on to sign the final contracts, saying that there are no points of disagreement about Dabaa plant.
High-level government official revealed that major state bodies, which were not specified, are carrying out the mission of revising the contracts and agreements of Dabaa nuclear plant before signing them, especially given that the initial contracts were signed by both the Egyptian and Russian presidents and any mistake in the drafting or the items may lead to political and economic problems.
He said that there are obstacles in the loan that are supposed to be granted to Egypt by banks, while the state’s major bodies are seeking to reach solutions to sign the final contract of the nuclear plant before the end of the year, refusing to disclose what these obstacles are.
The official gazette published on 19 May the approval of President Abdel Fattah Al-Sisi on the agreement between Moscow and Cairo about granting a Russian government loan to establish the first nuclear energy plant in Egypt. Russia will grant Egypt a $25bn loan to finance the building and operation equipment of Al-Dabaa plant.
The loan is used to finance 85% of the value of each contract to implement works, services, and shipments of the project. The Egyptian side will pay the remaining amount representing 15% in the form of instalments. The amount will be paid for the benefit of the authorised Russian institutions in a way that suits the contracts, in the form of an advance or any payment that is made later after implementing works and services and delivering supplies.
The term of the loan is 13 years over the period from 2016 until 2028, with a 3% annual interest rate.
The minister of electricity revealed that a number of companies have applied for the signing of the agreement to purchase energy for the first phase of the renewable energy feed-in tariff projects. He stressed that the ministry is willing to sign the agreement after the conclusion of the project’s financial closing, no later than 27 October.
Shaker added that the ministry seeks to diversify the sources of electricity production. Negotiations are ongoing with a number of companies in order to establish electricity plants fueled by coal. All technical aspects of several companies were reviewed; however, it is necessary to carry out financial and legal reviews on them before concluding the contracts, according to Shaker.
“The first clean coal-fired electricity plan will be working and connected to the national electricity grid within four years,” he noted.