(Bloomberg) -- The US beat out Russia last month to build Ghana’s first small modular nuclear reactor, in a deal Washington sees as prizing its technology over cheaper financing even as the West African nation keeps future options open.
An agreement between Nuclear Power Ghana and Regnum Technology Group that uses NuScale Power LLC technology defeated rivals including Russia’s state-owned nuclear company Rosatom Corp.
The US is “cognizant of the financing challenge that Western technology faces in comparison to the Rosatom value proposition,” Joshua Volz, a Department of Energy official said in a Sept. 7 interview in Cape Town.
“Our Ghanaian partners see that richer value proposition of that long-term relationship with the United States that is much broader than simply ‘how are we going to pay for this asset in the short term,’” he said.
The US and Russia have vied to establish nuclear projects across Africa in recent years, part of a broader tussle over sway in the resource-rich region that’s seen Moscow’s influence advance at the expense of the West.
Rosatom, which is also said to be seeking to take over uranium assets in Niger from a French-state-controlled company, is building a plant in Egypt and signed a deal with Guinea in June. The Russian firm pitched a plant to officials in Accra, Ghana’s capital in May, according to its website.
The US is engaging with Kenya in nuclear as well as geothermal energy, which can use technology developed in American oil and gas fields, Volz said.
“We are here for a broader and deeper and richer relationship and if we can use energy as that platform and that beachhead for that relationship, then we’re happy to do that,” he said, adding that the Export-Import Bank of the US and Development Finance Corp also play a role.
In Ghana, while financing is being discussed, the country could still look elsewhere for nuclear power, said Deputy Energy Minister Herbert Krapa. Different projects could also be considered, including with Chinese developers, he said.
At the same time, funding energy projects will remain a major concern for Ghana, which recently received support from international bondholders to restructure $13 billion of its debt.
SMRs are set to be less efficient in generating electricity than their larger counterparts, the Department of Energy wrote this month in a report, which calculated the median kilowatt price of an small reactor to be more than 50% higher than a traditional unit.
NuScale, the only small modular reactor licensed by US regulators, pulled the plug on its only project in November after costs surged.
It previously estimated average generation costs of $55 a megawatt hour in 2016. But newer estimates show costs surging to almost $120 a megawatt, pushed higher by skyrocketing prices of commodities including steel, carbon fibre and copper.
Regnum didn’t immediately answer emailed questions on whether it has any projects built or in development.
“Rosatom views African countries, and Ghana in particular, as strategic partners for development of sustainable energy solutions, including Small Modular Reactors,” the company said in an emailed response.
--With assistance from Jonathan Tirone.
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