Russian nuclear corporation Rosatom sees international energy projects as a priority. Africa’s energy market, which has been neglected by Russian companies since the collapse of the Soviet Union, seems now to be the fastest growing. Russia is gradually returning to the continent, with Rosatom at the forefront. Viktor Polikarpov, Vice President of Rosatom Central and Southern Africa, speaks to Rosatom Newsletter about the prospects and nuances of working in the region.
— How promising is the African market for nuclear technologies and solutions?
— This market has a huge potential. Africa’s GDP grows 5 to 7% per annum. There are 1.2 billion people living in Sub-Saharan Africa. Increasing by 3% annually, this figure will rise by a half by 2025, while the share of young people in the region will be the world’s highest.
Africa is facing an acute shortage of electric power. Out of 54 countries in our area of responsibility, 25 are hit by energy crisis. About 630 million people have no access to electricity. African countries are on their way to industrialization, urbanization is going on, and the middle class – some 300 million people – is growing. They want to live a decent life.
With only 120–180 kWh generated annually per capita, Africa lags far behind more economically developed countries. Just compare: 7,500 kWh is generated per capita in Europe and 15,000 kWh in the USA. Sub-Saharan Africa – not counting the South African Republic – has only 27 GW of installed capacity. With South Africa included, the total installed capacity is about 68 GW. That means the region needs at least 90 GW more.
Africa is developing, and we see no other alternative than nuclear. Although the local climate offers a plenty of opportunities for renewables, everyone understands that without nuclear energy it will be impossible to supply enough power for these countries to meet their ambitious goals. If we look at South Africa, 95% of its power generation is coal-fired. The country has no sufficient water or gas resources. This is the reason why it will have to embark on nuclear sooner or later.
— What is the current demand for nuclear construction in Africa?
— We expect 4 to 5 power units to be built in the region by 2035. South Africa with its nuclear plant at Koeberg is the only nuclear country on the African continent by now. We are considering the possibility of building nuclear power plants in Nigeria, Ghana and Kenya. Uganda has also expressed its willingness to build a nuclear plant by 2035.
Another potential customer is Zambia, which has also announced its plans to build a nuclear power plant. We have already signed a set of documents with Zambia on the construction of a nuclear science and technology center to help the country embark on nuclear. It took us as little as two years to move from preliminary discussions to agreements.
I would like to stress that our relationships with African countries are based on long-term cooperation.
— What power projects other than nuclear plants are carried out by Rosatom?
— We are promoting small hydro plants produced by Ganz, a Hungarian subsidiary of Rosatom’s AEM. These plants can find a very good market in Africa. Containerized hydro power plants are a quick and cheap solution as they can be easily delivered and installed. We plan to deliver the first hydro installations to Africa as early as next year. Our first commercial contract signed in January 2018 provides for a small hydro plant to be built at Mpompomo Falls in the province of Mpumalanga, 300 km away from Johannesburg.
— Rosatom operates in many areas that require nuclear technologies. Which of them, apart from the power industry, have the greatest potential in Africa?
— Cancer is a pressing issue in the region. Nearly 12.5% of adults under 75 – around 100 million people – have cancer. Countries like Ghana and Nigeria report about 20,000–25,000 cases of cancer every year, and many of the patients are children, while relevant medical centers are rare. As I said, Zambia has decided to establish a nuclear science and technology center. It will also have a medical facility.
Another area of interest is irradiation of food products. The continent produces much food like fruit and vegetables. Unfortunately, about 40% of them perish, and Africa keeps starving. Our offer is to set up irradiation centers which will, firstly, extend the shelf life of food products and, secondly, increase their export potential. Many countries like Uganda, Kenya and South Africa export coffee, tea and spices. Their shelf life must be long enough to be delivered to Europe and other regions, and this is where an irradiation center might come into play.
African countries are well aware of those problems and ready to spend their money on isotopes. South Africa operates Safari-1, a research reactor fabricating isotopes, and we collaborate with them in this area.
We also focus on staff training. For instance, Zambia sent 40 students to Russia to study nuclear science over the last two years. The speed of nuclear power development in Zambia is unprecedented. The country is working on workforce training, creating the nuclear infrastructure, and amending its regulatory framework accordingly. All this is just a preliminary to implementing a national nuclear program.
— Nuclear projects are always long-term and need political stability.
Africa has become more stable politically in the 21st century. For example, Ghana, Nigeria, Uganda, Kenya and Zambia are democratic countries and have been such for more than 50 years. Recent history shows that opposition has come to power by way of election, not war. Victories of the opposition may be challenged, but only before court. Political stability is crucial for the countries choosing nuclear.
The latest example is Ghana where the opposition has taken over. Both the old and new governments have been positive about nuclear energy. If we take a look at Ghana’s history, it declared independence in 1960. As early as 1961, Ghana and the USSR signed their first agreement to build a research reactor. And now we are actively discussing new projects with our partners.
– Many Rosatom Group companies would like to work in Africa. How can they enter this market? By winning tenders?
– Tenders are invited but have local specifics. Our key responsibility is to support Russian companies in selling their products and services on the local market.
– Could you give more details on the specifics of doing business in Africa?
– I have worked in European and American companies. Doing business in Africa is totally different. First, it is about personal relations. It can take years until you win trust and recognition as a partner. This is the reason why our business is developing slower than we would like it to. This somewhat irritates Europeans who want everything to be done fast – get off the flight, hold a meeting, sign documents and fly back. It is never like that in Africa.
Second, the European mentality tends to be logical while Africans have an emotional perception of things. There is an African saying that goes: you must impress rather than express. It means that an impression you make is more important than logic you demonstrate. Africans are emotional, impressionable and very sensitive. Those who work here should be in love with Africa and have an understanding of its culture.
A refusal in the African culture is perceived as an insult, and Africans never say no for this reason. At times, the talks may seem a success while the deal is rejected in fact and the contract will never be signed. Any pressure will return a soft smile and a formal consent but no business relationships in the future.
We are here to keep abreast of the situation after our colleagues’ visits and find out what is happening in reality. We need to understand what our African partners think and what should be done to be a success on this market. Sincerity plays a great role. You should not conceal problems if they arise. Africans take them and react to them adequately. But if you start dodging issues and making things up, they just break off contacts with you.
Africans like jokes. You should keep a sense of humor in everything. It is appreciated as is a non-standard approach or informal communication.
– What do you think is the main achievement of Rosatom’s regional office in Africa?
– It is too early to draw a bottom line. We are building a foundation for Rosatom’s activities in the region. Let us say, we have settled down, signed a number of documents and launched projects to establish nuclear centers. We are expanding the available product range, doing market research for Rosatom and its subsidiaries, and implementing extensive educational programs. And yes, our work is a success. Young Generation in Nuclear, a non-governmental organization recently established in South Africa, pushes forward the idea of developing nuclear energy. At present, its membership totals 330 students who will work in the African nuclear industry in the future. Activities of the Young Generation in Nuclear cover Kenya, Uganda and Tanzania. I would not believe five years ago that such a movement could appear in Africa. Young people want to study nuclear technology and promote nuclear energy. This is key to success of our nuclear programs in Africa.
In 2014, Rosatom opened a regional office in Johannesburg (South Africa). Its area of responsibility covers Sub-Saharan Africa, or 54 countries. By now, the office has built contacts with Zambia, Nigeria, Ghana, Congo, Kenya, Uganda, Tanzania, South Africa, Namibia, and Ethiopia.
Many of these countries have signed framework agreements or memorandums of understanding with Rosatom. The framework agreement signed between Russia and Nigeria in 2012 resulted in a contract signed in 2017 to develop a nuclear station construction project and a multi-purpose research reactor project. A contract to construct a science and technology center was also signed between Russia and Zambia.