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Nuclear energy, as an asset class, has the potential to report well against a wide range of Environmental, Social and Governance (ESG) data collection and accounting metrics, according to a new report from the Generation IV International Forum (GIF). This should allow nuclear energy to be considered as an investable asset class, thereby allowing nuclear companies and projects to access climate finance.
- Source: World Nuclear News
- Date: Wednesday, 08 September 2021
- Original article: world-nuclear-news.org/Articles/GIF-highlights-nuclear-s-ESG-attributes
Government appears to favour ‘Boot’ model alread used by Russia
Koeberg, near Cape Town, is the only commercial nuclear power station in South Africa.
The Nuclear Industry Association of South Africa (Niasa) has proposed six possible funding options for new nuclear, but government officials have suggested the most likely is a “build, own, operate and transfer” (Boot) model similar to that used by Russia for project including Akkuyu in Turkey.
Niasa told Engineering News that the very high proportion of the cost of energy that comes from the repayment of capital means interest rates will be fundamental to the viability of any new nuclear project in South Africa.
The association said real interest rates – which are adjusted for inflation – on state debt could be in the range of 2% to 3%, while real interest rates on high risk equity finance could vary from 10% to 15%. It said this explains why some new nuclear projects such as state-supported projects in China could be very competitive while others, such as the private equity funded Hinkley Point C in the UK, needed some kind of state guarantee such as long-term power purchase agreements.
Niasa told Engineering News that the very high proportion of the cost of energy that comes from the repayment of capital means interest rates will be fundamental to the viability of any new nuclear project in South Africa.
The association said real interest rates – which are adjusted for inflation – on state debt could be in the range of 2% to 3%, while real interest rates on high risk equity finance could vary from 10% to 15%. It said this explains why some new nuclear projects such as state-supported projects in China could be very competitive while others, such as the private equity funded Hinkley Point C in the UK, needed some kind of state guarantee such as long-term power purchase agreements.
Niasa identified six financing options that could be used to fund a new nuclear programme. The first was state funding for the entire project or state provided sovereign loan guarantees using reserves and cash flows from state-owned companies, as was the case with the United Arab Emirates’ Barakah project.
- Source: Nucnet
- Date: Wednesday, 20 May 2020
- Original article: nucnet.org/news/industry-association-proposes-financing-options-for-new-build-5-2-2020