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Nuclear next for Egypt

The country's expanding energy mix is aimed at ensuring steady electricity supply, thus minimising the risk of social unrest

Egypt is going energy mad. The country is on course soon to be self-sufficient once more in natural gas, with the mega-giant Zohr offshore gasfield due onstream in December. It's also pressing ahead with a number of renewables ventures. Now, Egypt has committed itself as well to nuclear power.

Like several other Arab countries, Egypt has been toying with the idea of a nuclear project for years without a clear notion of when and if it might proceed. In November 2015, the idea began to take shape when Egypt and Russia signed an intergovernmental agreement to work together on a nuclear scheme. That was the signal for the start of negotiations between the two sides. Almost two years later the documents are all ready.

During the recent BRICS summit in China Presidents Abdel-Fattah el-Sisi and Vladimir Putin put the final touches to the deal. The Egyptian leader invited his Russian counterpart to fly to Egypt to witness the signing of the final contract, at a date to be announced.

The nuclear plant is to be built at Dabaa in Egypt's western desert, on the coast some 105 miles (170km) west of Alexandria. It's a region that witnessed heavy fighting during World War 2, so mine clearance will be a major feature of the land preparation project. The venture will consist of four units, each with capacity to produce 1,200 megawatts of electricity, and take 12 years to complete.

As for the cost, the total bill is put at $30bn, with the Russian government lending $25bn of it. Egypt is hoping that private investors will cover the shortfall, and it's agreed to start repaying its loan from Russia in 2029.

Assuming the project goes ahead, then Egypt's long-term electricity generation needs are likely to be coveredespecially if the natural gas sector continues to thrive. One of Sisi's main objectives since coming to power in 2014 has been to ensure uninterrupted supply of electricity to all the country's 95m inhabitants, having identified power cuts during the hot summer months as a significant cause of social unrest. This is one of the reasons why Egypt has gone out of its way to offer IOCs favourable terms for gas exploration and development projects, onshore and offshore.

Keeping Egypt secure and stable is also vital for the success of the planned nuclear ventureto reassure potential foreign investors that their money is safe. Sisi will also hope that his security forces have eliminated the jihadi Islamist rebellion by the time the plant is complete. For while Dabaa is a long way from the Sinai desert, the centre of the current unrest, a nuclear plant would be a very tempting target for a group dedicated to the overthrow of the Egyptian regime.

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