Funds destined for PBMR

8 November 2004

The South African government will supply funds of 500 million rand ($82 million) to the pebble bed modular reactor (PBMR) project for the next year. The money will help PBMR Pty, the development consortium, place key contracts necessary for the eventual construction of a demonstration plant.

Among the tasks that must be completed before demonstration are the construction of a helium test facility and the development of turbine machinery. It is estimated that a total investment of about $1.3 billion will be required before the 110MWe demonstration unit, planned for Koeberg, near Cape Town, and the associated fuel plant, planned for Pelindaba, can be completed.

An environmental impact assessment (EIA) of the demonstration, which will be hosted by the state-owned utility, Eskom, alongside the two 965MWe PWRs it operates at Koeberg, was given a positive record of decision by the ministry of environmental affairs and tourism in 2003 but the ministry is currently processing a number of appeals. A final verdict on the EIA is expected within the next few weeks. PBMR Pty spokesman Tom Ferreira told NEI that, if a positive EIA decision came soon, then construction of the demonstratin plant and pilot fuel plant would commence in 2007 and be completed in 2010.

Shareholders in the PBMR Pty consortium include BNFL, the Industrial Development Corporation of South Africa, and Eskom. Ferreira said that negotiations were ongoing with a number of potential partners including a local consortium over entry to the project.

Before pulling out of the project, US generator Exelon held a 12.5% share and had been guiding it through pre-application licensing review work in the USA, where discussions continue with regard to a future design certification request. Ferreira said that seven US utilities are interested in the project and that the government funding should make it easier to attract investors. In addition, some refinements to the design promise "reduced complexity, potentially higher efficiency and reduced costs."

The new funding is part of a greater investment into infrastructure by the South African government. Some 84 billion rand ($13.8 billion) has been provisionally allocated to power infrastructure in a plan that envisages generating 4-5000MWe from 24 commercial-scale 165MWe PBMR units.

Announcing the spending plans, minister of public enterprises, Alec Erwin, said that initial public offering (IPO) of shares in Eskom would form part of the programme, but stressed that the firm would remain state-owned. Erwin said that the previous IPO of 20% of South Africa's Telkom could serve as a guide to the scale of any offer of Eskom shares but that such a move would not be made before 2006.

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