Why does Argentina want a Hualong One?

Why does Argentina want a Hualong One?

Energy is enlisting the commercial contract to contract China for the construction of the fourth nuclear power plant, an estimated work of around US $ 7,5 Billion for which enriched uranium technology will be used, different from the one used by Argentina.

In the first stages of its administration, the government of Mauricio Macri put emphasis on reviewing in detail the framework agreement signed by Cristina Fernandez de Kirchner, with China. The Hualong One would be located in Buenos Aires territory and built by the China National Nuclear Corporation (CNNC). It would be financed by a banking consortium led by ICBC and Exim bank, which will contribute some US $ 6,5 Billion to repay in twenty years, with eight years of grace and 4.5% annual interest.

The loan will be returned with the energy generated by the Hualong One. The state-owned Nucleoeléctrica Argentina Sociedad Anónima (NASA) will take the debt (with the guarantee from the Treasury) and repay it with the sale of electricity from the plant. The electricity would cost around 70 dollars per Mw, very close to the current average wholesale price.

Other substantive conditions already agreed are that

The acquisition of the Hualong One would help to develop the technology of the Carem25 (a reactor of smaller size that Argentina is manufacturing with a view to exporting by 2022), because 40% of the work will be local, including civil works, assembly and components.

Furthermore, the level of responsibility of the Chinese contractor was reinforced, which, according to a preliminary scheme of obligations, was vague and limited to 1% of the contract value.

The choice of the Hualong One by the government of Mauricio Macri remains with the vision of Kirchnerism, which had as a strategic priority to build a bridge with China, second commercial partner and suitable financing source for infrastructure.

About Author

Arnaud Lefevre

Arnaud Lefevre is the Chief Executive Officer of Dynatom International. Arnaud is in charge of the international development of the business portfolio.