Putin promises Egypt $25 billion in assistance
Russia will grant Egypt a loan of $25 billion for the Al Dabaa Nuclear Power Plant, Russian President Vladimir Putin announced at a session of the Valdai Discussion Club in Sochi.
The Russian State Atomic Energy Corporation Rosatom will be providing the reactors for the plant.
“We have great plans to collaborate [with Egypt] in the economic sphere,” Putin said, “This will involve energy, not just hydrocarbon, but also nuclear energy”.
“We are starting to build a nuclear power plant, as you know, on the basis of a Russian loan of $25 billion,” the Russian President observed, adding that “it is a good loan, with a good interest rate”.
“The repayments of the body of the loan will begin from 2029, I believe. These are good, preferential terms,” he continued, claiming that this would ensure the full utilization of the energy equipment and “develop the Egyptian economy”.
The loan will be issued by the Russian National Wealth Fund (NWF) in tranches of $3-4 billion, and will be the largest loan in the fund’s history.
The decision was made to use the NWF because Russia’s budget does not have such resources available, and borrowing such a large amount on the market would be problematic, explained Russian Finance Minister Anton Siluanov.
“The loans are being provided not through expenses, but by soliciting sources of financing. This is why we will need to borrow a similar amount and issue it to another country. The amount is large. That’s why, in our view, if we achieve the seven percent level, when considering the areas of investment, the NWF’s funds could be used,” the minister said.
According to the Accounts Chamber, foreign governments (their legal entities) had a total of $13 billion in overdue debt to Russia at the start of 2018. One third of all dollars issued as loans abroad ($39 billion) could not be recovered. In a year, the debt delinquency rate grew by 36% ($3.5 billion).
The intergovernmental agreement between Russia and Egypt to construct a four-reactor nuclear power plant was concluded in November 2015, and the follow-up engineering development and logistics contract was signed in December 2016.
In December 2017, Rosatom CEO Alexey Likhachev and Egyptian Minister of Electricity and Renewable Energy Mohamed Shaker signed the acts which brought the commercial contracts into effect.
The construction of all four reactors is expected to be completed between 2028-2029.