Clean & honest broker lacking colonial baggage: Russia investing in Africa’s huge energy potential
Africas economic potential is enormous: the continent contains significant mineral and energy deposits, a young and growing population, and an underdeveloped energy sector desperately in need of investment.
Approximately 640 million people, or two-thirds of the entire populace, dont have access to electricity. According to the African Development Bank, energy poverty reduces GDP growth by four percent every year. Russias energy industry, in comparison, is booming. Its state-run nuclear energy company Rosatom has an order book of 34 reactors in 12 countries worth $300 billion. Recently, Moscow has set its eyes on Africa where most states have either already struck a deal with the Kremlin or are considering one.
Africas long march forward
Currently, only South Africa is operating a commercial nuclear power plant with plans on the table to expand capacity. Another ten states are in different stages of planning and negotiations including Algeria, Egypt, Ghana, Kenya, Namibia, Nigeria, Tanzania, Tunisia, Uganda, and Zambia.
Energy poverty is a significant problem in the worlds least developed continent. The lack of access to a reliable and affordable source of energy is a severe impediment to economic development. Although the costs of renewables have decreased significantly over the years, technical and geographic limitations impede the rapid rollout of solar and wind energy. Also, Africa is urbanizing much quicker than the rest of the world where cities are expanding by eight percent every year compared to two percent globally – which puts even more pressure on the existing energy systems.
The Russian deal is particularly appealing to countries lacking nuclear knowhow due to Moscows comprehensive offer regarding financing, construction, and operation of the facilities. Currently, Rosatom is experimenting with a contract known as build-own-operate under which ownership of the plant remains in Russian hands while energy is sold to the host country. This new type of contract is appealing to several African states who lack the means to finance construction. In some instances, the mineral resources of host countries could function as a deposit for any liability comparable to Moscows arms-for-platinum deal with Zimbabwe worth $3 billion.
The Russian deal is also attractive for countries lacking the necessary infrastructure because Moscow takes back nuclear waste which means that host countries don't have to worry about storage. From a security point of view, this could alleviate concerns regarding weapons production through plutonium reprocessing or threats from non-state actors.
Moscows is reusing its successful Middle East strategy comprised of diplomacy, energy, and security. The Kremlin has presented itself as a clean and honest broker lacking the colonial background of most Western countries. Africas relative instability and need for cheap energy makes it a good match for Russia which is looking to expand its global presence and find new markets for critical industries such as energy.
From Moscows perspective, sanctions and deteriorated relations with the West have increased the need to improve its relations with other parts of the world. Africa is not a new frontier for the Kremlin, which maintained diplomatic and military contact with the continent during the Cold War to counterbalance the US This time, however, Moscow is not driven by ideology but by the need to increase influence and its position as a global power.