Rosatom explains benefits of state backing to plant projects

11 February 2016

Russia's gross domestic product gains three roubles for every one invested in building a nuclear power plant in the country, and two roubles for units built abroad, Rosatom deputy director general Kirill Komarov said in an interview with Vestnik Atomproma published on the state nuclear corporation's website yesterday.

"Our calculations speak for themselves: the construction of nuclear power plants in Russia with the national localization of production rate of 95-98% creates an additional seven to ten jobs in other industries […], boosting the socio-economic development of the country as a whole," Komarov said. "At the same time, when we build nuclear power plants abroad, Russian companies account for 60-70% of the work."

Asked whether it was beneficial for Russia to issue multi-year state loans to Rosatom's foreign customers, Komarov said, "Absolutely. Firstly, government support of projects such as in Turkey and Finland is logical in terms of promoting Russia's high-tech products. Secondly, it is undoubtedly beneficial to Russian industry. After all, when we build a nuclear power plant abroad, the lion's share of orders is available to enterprises based in Russia." High-tech products, such as nuclear reactors, engage a wide range of industries, "creating a long chain of added value", he said.

The construction of nuclear power plants abroad also "creates long-term economic ties", he said.

"Modern nuclear power plants under construction have a planned service life of 60 years with a possible extension to that, which means we will have the opportunity to offer our products and services not only in the construction phase, but also during the plant's entire operation. This includes fuel, services, staff training, repairs and modernization work." This "benefits the state" in creating jobs, orders for industry and taxes, thus "multiplying" the state's return on an investment in a project.

Asked whether Russian government support for Rosatom's work was a competitive advantage, Komarov said the country was "well-known" as an exporter of oil, gas and non-ferrous metals, but was also an exporter of high-tech products, including those produced by the nuclear power industry.

"And everything we do in the sector is not only safe - that's the most important thing of all - but also competitive in the global market compared with other vendors - the owners of the technology, as well as with other types of generation. Especially if we compare the cost of electricity not at the time of the capital expenditure, but throughout the entire lifecycle of the plant."

Russia is financing the Akkuyu nuclear power plant project in Turkey under a build-own-operate model and according to an intergovernmental agreement signed in 2010. Rosatom will build four 1200 MWe Gidropress-designed AES-2006 VVER pressurized water reactors at the Akkuyu site.

In January last year, Russia's Cabinet of Ministers approved up to RUB150 billion ($2.3 billion) in funding from the country's sovereign wealth fund for the Hanhikivi 1 nuclear power plant project in Finland. Most of the funding will take the form of a loan guaranteed by export credit agencies, while the remainder will be "other loans". Hanhikivi 1 is expected to provide revenues to the Russian federal budget of RUB338 billion ($5.2 billion) throughout the whole duration of the project.

An inter-governmental agreement Russia signed with Hungary in early 2014 would see Russian enterprises and their international sub-contractors supply two VVER-1200 reactors at Paks, as well as a loan of up to €10 billion ($10.5 billion) to finance 80% of the project.

In December last year, Bangladesh and Russia reportedly agreed to invest $12.65 billion in a project to build two 1200 MWe nuclear power units at Rooppur. Russia would finance up to 90% of the total cost of the project as credit with an interest rate of Libor plus 1.75%. Bangladesh would pay off the loan within 28 years with a ten-year grace period.

Researched and written
by World Nuclear News