MINISTERIAL ROUNDTABLE ON FINANCING AFRICA’S NUCLEAR ENERGY FUTURE
Identifying Risks in Nuclear Energy Financing (Financial, Technical, Political) and De-Risking the Sector
Statement
By
Mr. Claver Gatete
United Nations Under-Secretary-General and
Executive Secretary of ECA
Kigali, Rwanda
17 December 2024
Your Excellency Lassina Zerbo, Chairman, Rwanda Atomic Energy Board,
Honourable Jimmy Gasore, Minister of Infrastructure, Rwanda,
Honourable Ministers and representatives of governments,
Honourable Nana Menya Ayensu, Special Assistant to the President for Climate Policy, Finance and Innovation, The White House, USA,
Mr. William D. Magwood, IV, Director-General, OECD Nuclear Energy Agency,
Mr. Rafael Mariano Grossi, Director-General, International Atomic Energy Agency,
Distinguished delegates,
It is a privilege to join you here at home in Kigali, a city that, like others on the continent, epitomizes Africa’s potential for innovation and resilience.
I wish to begin by extending my gratitude to the Government of Rwanda, the United States Africa Nuclear Energy Summit (USANES), and the Nuclear Energy Agency (NEA) for organizing this timely and strategic gathering to explore the challenges and opportunities of nuclear energy and how to finance and de-risk for Africa’s nuclear energy future.
As we meet today, over 600 million Africans lack access to electricity – a stark reminder of the energy inequities that hinder our continent’s development.
This energy deficit undermines industrialization, weakens our healthcare systems and impedes education, among others.
Yet, as Africa’s population grows and industrial demands rise, we face an unparalleled opportunity to chart a sustainable energy future.
And nuclear energy, with its low-carbon footprint, reliability and long-term stability, must be part of this conversation.
Globally, nuclear energy has demonstrated its transformative potential.
It accounts for an estimated 10% of global electricity generation and plays a pivotal role in reducing greenhouse gas emissions.
Indeed, there is no reason why this cannot be our continent’s story as well.
For Africa, nuclear power offers the promise of stable baseload electricity that is essential for powering industries, facilitating regional trade under the African Continental Free Trade Area (AfCFTA), and meeting our commitments under the Paris Agreement.
To be clear: Africa is no stranger to the potential of nuclear energy.
South Africa leads the continent with the operational Koeberg nuclear plant, which has reliably powered homes and industries for decades – in fact, since 1984.
Meanwhile, Egypt is building the El Dabaa nuclear power plant under intergovernmental financing scheme, a US$30 billion investment that underscores the long-term viability of nuclear financing.
It is also commendable that countries such as Rwanda, Ghana, Uganda, Nigeria and Zambia are taking bold steps in advancing collaborations to bring nuclear energy closer to reality.
However, Africa’s progress is set against the backdrop of challenges that other regions have managed to navigate.
Globally, nuclear energy financing has evolved from predominantly public funding to diverse models like equity investments, export credits, corporate finance, public-private partnerships and other blended mechanisms.
And these models hold lessons for Africa as we mobilize resources for high-capital projects.
Excellencies,
Distinguished Delegates,
In this respect, allow me to highlight three critical risks and how we can collectively address them:
The first is financial risks.
The high upfront costs of nuclear projects deter many African nations with limited fiscal space.
Public investments in nuclear energy plants require capital structuring, securing funds, availing equity and/or accessing debt.
Also, extended construction timelines can delay returns on investment if projects are poorly planned or executed.
To mitigate this, we must focus on innovative de-risking mechanisms, including structuring appropriate debt and equity balance, concessional financing, co-investment with strategic partners, crowding-in private sector actors through partnership models, and enhancing the role of development finance institutions.
This must be supplemented by strengthening technical and institutional capacity to deliver well-managed projects.
The second is technical risks.
Nuclear energy demands a robust technical infrastructure and skilled human capital to effectively manage construction and operational risks.
Additionally, design, technology selection, licensing, infrastructure development such as roads and power grids, and performance monitoring are relevant areas of risk management.
Technical capacity to manage operational risks, such as operational standard management, fuel supply security, and nuclear risk management are also required.
Currently, many African countries lack the expertise to manage the lifecycle of nuclear facilities – from construction to waste management.
In this regard, investments in human capital development, facilitated by regional cooperation under the AfCFTA, will be paramount.
Furthermore, we must leverage global partnerships for technology transfer and skills training.
And the third is political and social risks.
Public perception on nuclear energy remains a significant hurdle.
Incidents such as Chernobyl and Fukushima often evoke fears of safety and environmental harm.
Moreover, concerns about the potential misuse of uranium for non-peaceful purposes must be addressed transparently.
Furthermore, potential investors and partners may raise concern around stability of policies, laws and regulations in support of nuclear energy development.
It is essential that governments prioritize public awareness campaigns and implement stringent regulatory frameworks to build trust and ensure safety, and also establish conducive and stable legal and policy regimes.
Excellencies,
Distinguished Delegates,
Despite these challenges, I am optimistic about Africa’s nuclear future.
I therefore propose five strategies to help us to unlock its full potential.
First, Africa’s success in this endeavor will lie in leveraging its collective strength.
Through regional cooperation initiatives, like the Alliance for Sahel States’ shared nuclear facility in the Sahel or cross-border power pooling, such as the Eastern Africa Power Pool (EAPP), we can reduce costs and maximize efficiency.
It is crucial that platforms like the African Union and the regional economic communities champion this collaborative approach.
Second, small modular reactors offer a game-changing opportunity for Africa.
Their scalability, lower cost and ease of deployment make them ideal for countries with smaller grids or limited financing.
Governments should prioritize pilot projects and fast-track regulatory approvals for maturing small modular reactors.
Third, we must explore innovative financing models that bring together strategic partners from the public sector, corporate partners and the private sector, as well as leveraging sovereign wealth funds, green bonds and international climate financing mechanisms.
Furthermore, development banks will be important in this endeavour in offering blended risk-mitigating financial solutions for private sector investment.
Fourth, building a skilled workforce is the cradle of nuclear industry development.
From engineers to safety inspectors, Africa must invest in training programmes and exchange initiatives.
This requires not just national efforts, but also regional integration, aligned with the vision of the Africa Continental Free Trade Area (AfCFTA), to allow for the seamless transfer of knowledge and expertise.
Finally, our recent adoption of the Pact for the Future underscores the need to position our youth and technology as central pillars in Africa’s nuclear ambitions.
In this respect, we must leverage progressive programmes like the Global Digital Compact to ensure that Africa’s digital revolution supports the nuclear sector, from advanced simulations to real-time monitoring systems.
Distinguished Delegates:
As I conclude, nuclear energy is a bridge to Africa’s sustainable future.
And ECA, and its partners, remain committed to provide the required technical cooperation and advisory services as member States pursue their nuclear energy development journey.
I thank you for your kind attention.