Nuclear energy – a gateway for Russia’s power in the MENA region
In the area of nuclear energy, Russia holds the monopoly with its strategic outreach plan to build and operate nuclear reactors worldwide. Offering a full package consisting of investments, loans, fuel, services, training, and development gives the Russian national company ROSATOM the edge over the possible competition and enables it to gain a huge advantage on the energy market in the countries where it is involved. Furthermore, internally it contributes significantly to the Russian economy and externally it strengthens Russian influence. Having the chance to operate some of the reactors (in partnership with the local government) in exchange of supplying a large part of the building costs gives ROSATOM the possibility to gain revenues during a significant period of time and political leverage that can be used by the Russian government in other affairs with the local governments.
The Middle East and North Africa is a region of contrast, a region where hard power still counts the most and where nuclear energy seems set to expand in the coming years. In Iran, ROSATOM has already built a reactor that is operational, Iran – Bushehr 1, and it has already contracted another two units in Iran: Bushehr 2 and 3 (contracted in November 2014, financial scheme in place). Across the Middle East, ROSATOM has also struck deals with:
- Egypt – El Dabaa (four units), cost of around $26 billion, loan contracted for around 35 years by the Egyptian Government;
- Jordan – Al Amra (two units), cost of around $10 billion with the Jordanian government owning 50.1% and the rest by ROSATOM;
- Turkey – ROSATOM will build the Akkuyu power plant, with the expectation to complete the power plant in 2023; the Russian company holds 51% of the project after selling 49% to a Turkish consortium.
I argue that this is part of the overall Russian offensive-dominance strategy in the Middle East aimed at reasserting Russia as an important player across the region and not only, at the same time projecting power in connected areas such as North and Sub-Saharan Africa. Obtaining nuclear power hegemony across the region is an essential aim, always expanding in this sense – agreements to cooperate on nuclear energy issues as in the cases of Tunisia and Algeria, are all parts of this strategy. The region is attractive for nuclear energy expansion from multiple points of view. The states in the region want to develop nuclear energy coupled with the desire to develop good relations with Russia. Prices that are significantly lower than the competition and financial packages that further reduce costs make the Russian offer hard to refuse.
Although Russia seems to hold all the cards in the regional nuclear power market, on the overall economic overview, it accounts for very little compared to the economic power projected by the EU and the US. Without a doubt, the investments made will pay off in the long term and enable Russia to project influence in the politics of the Middle East. However, based on all the information, it is difficult to believe that this influence will yield more power for Russia in the region compared to the EU and the US in the future to come.
The states that are in the process of developing nuclear projects in partnership with Russian offshoots also face some important risks that can affect them from a political, economic, environmental, and even diplomatic standpoint. The political vulnerability stemming from being dependent on Russia has given its stake in the projects and the fact that Russia will supply the reactors with nuclear fuel appears to be the main threat for the client countries on one side and the biggest leverage for the Russian government on the other side. Because these are long-term projects a lot of issues can appear over time such as worsening relations between countries, lack of financial resources to complete (given the huge amount of costs and the high level of investments necessary in technological developments, education, safety & security), postponing terms, etc. Technological developments on alternative sources of energy will no doubt evolve, making nuclear energy less attractive, subsequently making nuclear reactors less popular in the region. Furthermore, there are environmental risks deriving from the disposal of nuclear waste, which highlights the need to have adequate plans on this aspect.
Alone, nuclear energy cooperation will not reinstate Russia as a power player in the region, but as part of a bigger strategy, it shows signs of success. However, because the region is very volatile, it is difficult to predict future developments. In short-term (signing contracts for building power plants, enhancing relations with countries in the region through developing cooperation mechanisms), I believe this strategy serves its purpose in the nexus of projecting power in the Middle East and North Africa region.