Jozii Admasu
The Global Position and Market Context of ROSATOM
The Soviet Union had a huge historical influence on the growth of nuclear power facilities around the world. This influence continues to shape the global nuclear industry, as many projects still adhere to Soviet-era designs and principles. This legacy was further consolidated and globalized following the formal incorporation of ROSATOM by Vladimir Putin in December 2007, which centralized Russia’s nuclear assets and aggressively promoted its technological blueprint on the international stage.
The Russian nuclear power plant industry is primarily driven by the state-owned atomic energy corporation ROSATOM. As a global leader, ROSATOM is the main force behind the Russian nuclear power plant industry as one of Russia’s largest employers, with over 370,000 employees as of 2020. The corporation holds more than one-third of the global market share in uranium enrichment and supplies 17% of the world’s nuclear fuel.
Over 70% of the world’s nuclear reactors were developed by ROSATOM, which historically joined the international market in 1971 with the Europeans and expanded to many other nations, using nuclear contracts to fortify diplomatic connections. However, its activities in the markets of Europe and many Western countries have become highly insecure in the wake of the war in Ukraine and the subsequent international sanctions imposed by NATO members and supporters. ROSATOM’s longstanding partners face significant obstacles as a result of the European Union’s 2025 plan, which requires member nations to stop collaborating on Russian nuclear developments by the end of this year.
The ROSATOM Novel Approach to their Financial Model and Global Targeting
In response, ROSATOM has pioneered a pragmatic financial model of a project deliver method for the continuation of other international nuclear power plant projects, notably the Build-Own Operate (BOO) for the global projects starting in Turkey financing over 90%. This financial concept makes the use of both business and diplomatic connections to finance 80-90% of the entire nuclear plant cost and provides low-interest payback options spread out over 20–25 years. This is a major departure from conventional intergovernmental agreements and has the potential to revolutionize the nuclear industry by transforming the sector while removing the need for host nations to make large upfront financial investments. The Russian law also does not allow direct transfer of funds of export credits to the sovereign borrower.
This model shall be recognized as more than a financial tool; it is a powerful geopolitical instrument, particularly in nations outside of NATO and the Ukraine alliances. By offering long term financing and taking ownership of key energy infrastructure, Russia gains deep-seated economic and energy influence. Russia embeds itself deeply into a nation’s economic and energy sectors, gaining deep-seated economic and energy influence. This leverage allows it to affect electricity pricing and ensure the prioritization of loan repayments. While some view this approach as a form of Russian form of debt trap diplomacy, though it is also seen by some as a transformative opportunity for energy sector enhancement.
As a result of this approach, ROSATOM is now more focused on Asia and Africa, including Latin America. In Asia, countries including China, India, Bangladesh, Vietnam, Uzbekistan, Kazakhstan, Turkey, and Iran have already secured deals, while Indonesia, Mongolia, Saudi Arabia, and the UAE are in advanced discussions.
The ROSATOM`s Focus on the African Market
The primary target for this financial model is Africa. The deployment of their latest nuclear model of VVER-1200 MW reactor requires a minimum national population of 44.676 million in the country, needing an additional 200 kWh/year per capita (equivalent to 8,935.2 GWh/year at 85% efficiency, excluding transmission losses).
Therefore, the most viable candidates are Africa’s most populous nations: Nigeria, Ethiopia, Egypt, the Democratic Republic of the Congo, Tanzania, South Africa, Kenya, and Uganda. Medium and smaller-sized reactor designs are possible for countries with lower population or energy demands.
∙ Egypt: Has signed and begun the second nuclear power plant in Africa next to the South Africa`s Koeberg NPP in Africa but this is the first Generation III+ reactor nuclear power plant in the continent to develop four VVER-1200 units total capacity of 4,800 MW plant in the northern Egypt with a budget of $30 billion USD whereas the $25 billion USD of the 85% loan is covered by Russia with a 3% interest rate with loan term of 13 years from 2016 to 2028. “It was not clear at the time what the deal was worth, but Egypt’s president Abdel Fattah al-Sisi said the loan would be paid off over 35 years.” Reuters, but the most common sources say the repayment period is 22 years. signed in December 2017 in the presence of both presidents.
The Egypt`s NPP El Dabaa Nuclear Power Plant (NPP) construction permission and construction details of each units; Unit 1 & 2 construction application was sent to Nuclear Power Plant Agency (NPPA) on June 30, 2021 which was to check the scientific qualifications and accumulated expertise necessary for achieving the duties assigned to it in relation to the management, operation and maintenance of nuclear power plants in Egypt. Unit 1 got its construction permission on June 29, 2022, after a year and a half, and construction of the first safety-related concrete was poured immediately within a month on July 2022. While Unit 2 was permitted on October 31, 2022, where the construction was started within 3 weeks on November 19, 2022, which is a Nuclear energy day in Egypt. Whereas the remaining two units of Unit 3 and Unit 4 construction permits were applied on December 30, 2021 to Egypt`s NPPA together, where Unit 3 obtained its construction license on March 30, 2023, and the construction started within 2 months in May 2023. The final Unit 4 construction license was given on August 30, 2023, with the first concrete poured in January 2024. This timeline shows a systematic, unit-by-unit progression, with each subsequent permit being issued after the previous one, demonstrating the regulatory process for this large-scale project.
∙ Ethiopia: Is progressing towards starting construction on a 2,400 MW plant (2 x VVER-1200) in October 2025, supposedly fully financed by Russia. This power plant is equivalent to that of the Rooppur Nuclear power plant design of Bangladesh, which was designed, contracted and financed up to 90% ($11.38 USD) by ROSATOM in Dec 2015 with a total budget of 12.65 billion USD and 10 year grace period to repay within 20 year with a 40 equal bi-annual installment dated to March 15 and September 15. The general contract for the construction of two units is an EPC (Engineering, Procurement, and Construction) contract, and it includes construction, installation, erection work, the development of working documentation, the supply of equipment and materials, nuclear fuel for initial loading and two reloads, personnel training, and commissioning. The Levelized cost of Electricity (LCOE) from the government of Bangladesh is estimated at $56.73/MWh. The Bangladesh Prime Minster has requested ROSATOM to build two additional units on the completion of the first two units, which will be equivalent to Egypt`s El Dabaa plant.
∙ Uganda: Russia is promoting a VVER-1000 MW model. With an 85% efficiency rate, this would add about 146 kWh per person per year for Uganda’s 51 million inhabitants, potentially doubling the country’s current usage of about 110 kWh per person.
∙ Nigeria: Signed a Memorandum of Understanding in January 2025 for a 4,800 MW plant (4 x VVER-1200) in Akwa Ibom. The facility is projected to generate 35,740.8 GWh annually (at 85% efficiency). This production is almost equal to the expected 38,000 GWh of combined energy from the GERD and three additional proposed Blue Nile dams.
In my opinion, for Nigeria’s case with its 230 million people, an additional 4,800 MW plant (4 x VVER-1200) would be feasible to meet the country’s enormous electricity demand totaling 9.6 GW nuclear power plant, providing an extra 310 kWh per person.
∙ Other African Nations: Rwanda and Zimbabwe have cooperated and planned on a Small Modular Reactor (SMR) of 200-300 MW. Ghana is in the feasibility study stage for a 1,000 MW plant, while Kenya and Tanzania have signed Memoranda of Understanding (MoUs) for preliminary studies.
While a nuclear energy renaissance in Africa appears to be a possibility given the number of ambitious projects on the horizon, my analysis will highlight specific drawbacks of pursuing nuclear power plants in some African countries and their neighbors, particularly for hydropower rich nations like Ethiopia and the Democratic Republic of Congo (DRC).
Another possible development market for RASATOM is in the Latin American countries, such as Brazil, Argentina, and Bolivia, which are already being utilized.
Financial Evaluation of the Ethiopian Nuclear Power Plant
The latest VVER-1200 reactor is going to be used for the project which has an improved efficiency capacity up to 90% and a service life of up to 100 years. For conservative calculation, using 85% efficiency and an 80 year service life provides an annual generation of 8,935.2 GWh per reactor, or a lifetime output of ~715 TWh.
A single VVER-1200 unit is expected to cost $7.2 billion USD to build, or roughly $6 million per MW, or $6,000 per KW.
Regarding Ethiopia`s project, a projected 2,400 MW facility (2 x 1200-VVER):
∙ Total Loan Principal: Estimated at $14.4 billion USD.
∙ Interest rate: 3%
∙ Completion Schedule: First unit (1,200 MW) in 2032; second unit (1,200 MW) in 2034. ∙ Repayment Terms: 25 years starting in 2035, with a 3% interest rate, using the BOO model. ∙ Annual repayment amount: The amortization calculation results in an annual payment of
$826,961,343 USD for 25 years, resulting in a total repayment of $20,674,033,574.13 (approx. $20.67 billion USD) by 2060.
The Implication of Electricity Pricing for Ethiopians
To ensure a sustainable balance for both consumers and the utility provider, the minimum electricity price must be set at a level that covers, at a minimum, the project`s annual debt repayments along with all operational and maintenance costs, if possible with other miscellaneous expenses, including profits.
∙ Annual energy generation: 17,870,400 MWh = 2,400 MW at 85% capacity factor ∙ Annual repayment amount: $826,961,343 for 25 years
∙ Price to Cover the debt: Energy generated divided by the debt amount
$826,961,343 / 17,870,400 MWh = $46.27548029143164 USD/MWh
So $46.28 USD per megawatt hour or $4.628 US cent per kilowatt hour is the least amount to sell the electric current, this electric pricing covers only the loan repayment and does not include operational and maintenance (O&M) costs, fuel costs, waste management, decommissioning fund, grid integration, transmission expenses, profit margins, taxes, or other unforeseen costs. Pricing the electric current is very sensitive as we change small variables, even without adding an extra expense but loss of energy while it`s being delivered to the inhabitants.
At a minimum, the electricity tariff must be $46.28 USD per megawatt-hour ($0.04628 per kilowatt-hour) to cover only the project’s loan repayments. This price, however, does not account for the extensive and long-term expenses required for the plant’s operation, including operational and maintenance (O&M) costs, fuel, waste management, decommissioning funds, grid integration, transmission expense, profit margins, taxes or any other unforeseen expenses. Additionally, the final pricing is highly sensitive to external variables, as even minor factors like 7% transmission losses can significantly impact the revenue required to ensure financial viability up to $3.48 USD/MWh, for both the utility provider as well as the user inhabitants. Let`s see the impact of this scenario:
Current pricing with a 7% Transmission loss: The effective repayment cost calculation:
∙ Annual energy generation: 16,619,472 MWh = (2,400 MW at 85% capacity factor) – 7% transmission loss (1,250,928 MWh)
∙ Annual repayment amount: $826,961,343 for 25 years
∙ Price to Cover the debt: Energy generated divided by the debt amount
$826,961,343 / 16,619,472 MWh = $49.75858095852865 USD/MWh
So the cost rises to $49.76 USD/MWh for the 7% transmission loss with a change in around $3.483100667097006 USD/MWh to be exact.
Minimum Suggested Viable Pricing for 2 VVER-1200 model: Setting a final consumer price of $60.00 USD/MWh would generate nearly $1 billion ($997,168,320) in annual revenue with the 7% transmission loss. After the debt payment, this would leave an annual surplus of approximately $170.2 million USD ($170,206,977) to contribute toward O&M and other operational expenses.
The preceding analysis emphasizes Ethiopia`s nuclear energy framework, highlighting the crucial strategy of electricity pricing and its capital requirement of nuclear power. This concept can be extrapolated to other similar projects in countries of varying sizes, such as double sizes of Egypt and Nigeria or smaller nations planning for a single VVER-1200 reactor, by scaling the relevant variables.
Let`s see Turk Akkuyu Nuclear power plant scenario where it`s design is four VVER-1200 /509 model, where the Turkish Electricity Trade and Contract Corporation (TETAS) has guaranteed the purchase of the 70% power generated from the first two units and 30% from the other two units over to be sold at $123.5 USD/MWh for 15 years as a power purchase agreement and the remaining power will be sold in the open market by the producer. Now, let`s calculate the revenue generated from this agreement for the 15 years and its lifetime economy.
∙ Annual energy generation of two units: 17,870,400 MWh = 2,400 MW at 85% capacity factor ∙ Available energy to be sold at fixed price: 70% of the 1st 2 units + 30% of the other 2 units (17,870,400 MWh * 70%) + (17,870,400 MWh * 30%) = 12,509,280 MWh + 5,361,120 MWh = 17,870,400 MWh
∙ Available energy to be sold at open market price: 30% of the 1st 2 units + 70% of the other 2 units (17,870,400 MWh * 70%) + (17,870,400 MWh * 30%) = 5,361,120 MWh + 12,509,280 MWh = 17,870,400 MWh
∙ Electricity price:
o Fixed price = $123.5 USD/MWh
o Open Market = $21-71 USD/MWh
∙ Annual energy revenue per agreement`s Fixed Price: 17,870,400 MWh * $123.5 USD/MWh= 2,206,994,400 USD/year
o Total 15 year revenue of Fixed Price: 2,206,994,400 USD/year * 15 Years= $33,104,916,000US dollars
∙ Annual energy revenue per Open Market: 17,870,400 MWh * $21-71 USD/MWh= $375,278,400 to $1,268,798,400 USD/year
o 15 year revenue of open market: $375,278,400 to $1,268,798,400 USD/year * 15 Years= $5,629,176,000 to $19,031,976,000
∙ Total energy revenue of the 15 years of both fixed & Open Market: $33,104,916,000 + $5,629,176,000 to $19,031,976,000 = $38,734,092,000 to $52,136,892,000 USD ∙ Total lifetime Akkuyu NPP revenue (60 years): Total energy revenue of the 15 years of both fixed & Open Market multiplied by four for a simple calculation of the 60 years: o $38,734,092,000 to $52,136,892,000 USD * 4 = $154,936,368,000 to $208,547,568,000
The Akkuyu nuclear power plant generates $155 to $208.5 billion USD over the 60 years of its lifetime, where there`s a big chance of upgrading its lifetime up to 80 – 100 years, which can directly add more revenues as well. The construction cost budget is estimated to $25 billion US dollars where ROSATOM financed over 90%. We can easily estimate that the NPP within its lifetime can generate a profit of at least $100 billion USD.
Editor’s Note : Views in the article do not necessarily reflect the views of borkena.com
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Given the progress of Ai revolution in all economic sectors, acessing Nuclear fusion energy is not far from reality. Why poor nation trapped themselves in debts for old technology of Nuclear plants