Another Chinese nuclear deal has been signed; at the G20 summit on the shores of Antalya, Turkey.
This time the deal is between China and Argentina and is worth an estimated USD 15bn. According to sources, Chinese banks and associated companies will provide investments and loans worth 85% of the project costs, and loans will be repaid at an annual rate of 6.5% over 18 years. Roughly 60% of materials will be locally manufactured; the remainder imported from China. State-owned China National Nuclear Corp. (CNNC) in co-operation with Nucleoeléctrica Argentina SA (NASA) will build both reactors, the first of which will cost circa USD 6bn and will utilise Canada Deuterium Uranium or “Candu” technology, while the second will be made using China’s own Hualong-1 reactor technology; something China has been keen to export.
This deal is expected to almost double Argentina’s nuclear power capacity; which is currently generated from the three existing nuclear plants. On discussing the agreement, Argentine economy minister, Axel Kicillof said, “The construction of two new nuclear power plants will ensure our energy supply in the future,” adding that the agreements “are very favourable for us as they give us energy and competitiveness”.
According to Argentine Minister of Planning and Public Investment, Julio Miguel de Vido, this is the largest investment any country has made in Argentina “considering the preferential interest rate and the payment terms” in the agreement. Having provided significant financing and investment to dam, railway, maritime and energy projects throughout America's “backyard”, China has recently pulled out of investing in the more “risky” LatAm countries, for example Venezuela, and has turned focus to the likes of Argentina. Just last year, China provided Argentina with a USD 11bn swap agreement to help prop up the country’s flagging reserves.
This Sino-Argentine nuclear deal could not have come at a better time, especially as Buenos Aires is virtually excluded from international credit markets. In fact, China has been broadening its global infrastructure presence and is fast becoming the world’s lender due to its ability to provide favourable financial terms to countries like Argentina which has been shunned from global credit markets, or sanctioned; in the case of Russia.