Argentina and China finally reached an agreement on the construction of the nuclear power plant Atucha III after five years of negotiations. The final deal contains a small detail which made the headlines today, as the power station will cost US$ 1.6 million less than it was supposed to, when the deal was set by Cristina Kirchner’s government.
The nuclear plant was calculated at a cost of US$ 7.4 million when the deal was reached by the former minister of production Julio de Vido. With the new agreement, and the station being built conjointly with China and Canada, the project will only cost US$ 5.8 million.
Atucha III will be the third Argentine nuclear reactor within the Atucha complex. The first was started in 1974, and the second in 2014. The agreement for the third reactor was signed on the 30th of March, after months of negotiations between the Ministry of Energy, led by Juan José Aranguren, and Xi Jinping’s government. “The project carried out by the last government had some irregularities, a large amount of local costs which were not clear and needed to be adjusted. China understood and accepted the new conditions,” said to Infobae a source who worked on the long-lasting negotiations.
Argentina has three nuclear stations working today: the two power plants on the Atucha complex, as well as the Embalse station, all located in the northern part of the country. According to Argentine media, Macri’s government plans to sign the final treaty with China during the G20 summit, to be held in Buenos Aires this coming November. The country is still working on the agreement, as in addition of the construction of Atucha III, the deal would also include the construction of a fifth power station in the country. They hope to finalize this part of the arrangement in May in order to start the construction of Atucha III by 2019.
The financing of the power plant will be divided between the three countries included in the agreement. China will provide US$ 2.2 million of the funding, Canada nearly US$ 800,000, and Argentina will finance the rest. The other main differences between this contract and the one signed by Kirchner’s government is the local labor force, which will increase up to 40 percent. Moreover, the new agreement is now based on Argentine law, which means that in case of any juridical issues, it will be settled in the country. In the previous contract drawn by Julio de Vido, any lawsuits had to be handled in the United Kingdom.
In the past few years, China has been the leading force in term of nuclear construction, despite the sector’s slowdown. It has built the most power stations in the last decade and has the highest number of planned constructions too, leading the market despite only being the third nuclear-generating country behind the United States and France.
Greenwich University lecturer Steve Thomas explained that the Chinese domination was due to four factors: the low costs of the Chinese companies; the highly qualified workforce they possess; the financial resources they have in reserve; and finally the issues that every single one of their competitors are dealing with. French Areva and Japanese Toshiba all experienced important delays recently while the Russian Rosatom struggles due to the economical sanctions held against the country.
Third in the energy sector of Latin America, Argentina’s electrical market is not powered by the nuclear stations, which only represent 5 percent of its income. The fossil fuel industry creates the majority of the electricity produced (61 percent) while renewable energy, thanks in part to the hydraulic generators, holds 34 percent. These are numbers that both the Kirchner and Macri administrations have tried to change since they got into power, and it seems like it could finally be the case.