Egypt, Russia expected to finalize nuclear deal

Russian President Vladimir Putin, right, and Egyptian President Abdel Fattah El-Sissi shake hands during a meeting in the Russian Black Sea resort of Sochi, Russia. (AP file)
Updated 10 December 2017
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Egypt, Russia expected to finalize nuclear deal

CAIRO: Egypt is expected to finalize contracts for its first nuclear power plant during a visit by Russian President Vladimir Putin starting Monday.

Egyptian President Abdel Fattah El-Sisi will sign the contracts with Putin, according to senior sources quoted by Reuters.

As per an agreement in 2015, Russia will finance and operate the plant in El-Dabaa, west of Alexandria.

Two large Russian nuclear power reactors with significant desalination capacity will be built. Russia is extending a loan to Egypt to cover the cost of construction.

Egypt’s official gazette last year said the loan was worth $25 billion, and would finance 85 percent of the value of each work contract, services and equipment shipping. Egypt would fund the remaining 15 percent.

Representatives from Russia’s State Atomic Energy Corp. Rosatom and Russian universities reportedly visited major Egyptian universities recently to explore means of employing Egyptians at the plant.

Egypt has wanted a nuclear plant since the 1960s, but for various reasons — including foreign political pressure and few energy shortages at the time — the plans were shelved.

But after several delays, Egypt and Russia agreed in 2015 that the latter would fund the project.

The deal commits the two countries to building a nuclear power station that will start operating in 2022 and satisfy about half of Egypt’s energy needs, officials said.

According to several studies, El-Dabaa is the most suitable location because it is less prone to earthquakes and has suitable weather conditions and groundwater movement, as well as sea currents and tides, Al-Ahram newspaper reported.

With a population of nearly 104 million and vast energy needs, Egypt wants to diversify its energy sources, said Saeed Sadek, professor of political sociology.

“Given Egypt’s booming population, and the impact Ethiopia’s Renaissance Dam is expected to have on Egypt’s water resources when it starts operating, the need for this nuclear project is more significant today,” he told Arab News, adding that Russia is eager to boost its presence in the Middle East.

“The project has a chance, but it will face challenges from the EU, which had said on several occasions that it’s unhappy to witness a Russian nuclear plant in Egypt,” Sadek said.

Middle East expert Justin Dargin from Oxford University told Arab News: “Egypt has a real chance to move forward with this development as it has already established vast human resources in engineering and technology.”

He added: “Egypt has often exported this talent to other Arab countries. With Russia's assistance, Egypt would certainly be able to construct El-Dabaa.”

But there are public concerns over how the country will be able to secure the plant given the current instability.

“It’s always a difficult issue to secure nuclear material. Even developed countries such as the US and UK have had incidents with their nuclear plants,” said Dargin.

“Egypt would have to be extra cautious with its nuclear facilities as they could be targeted by extremist groups,” he added.

“In 2012 there was a theft of nuclear material at El-Dabaa, so the government would have to reassure the public that it has the highest safely protocols there.”


Treasury Secretary: US ‘could not be happier’ with Bahrain outcome

Updated 27 June 2019
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Treasury Secretary: US ‘could not be happier’ with Bahrain outcome

  • Mnuchin confident of raising the first $4 billion soon

MANAMA: Jared Kushner’s “workshop” aimed at securing economic prosperity for Palestine closed with optimistic forecasts from President Donald Trump’s special adviser that it could be the basis for a forthcoming political deal with Israel.

Kushner told journalists at a post-event briefing: “I think that people are all leaving very energized, very pleasantly surprised at how many like-minded people they see. It is a solvable problem economically, and the reason why we thought it was important to lay out the economic vision before we lay out the political vision is because we feel we need people to see what the future can look like.

“The Palestinian people have been promised a lot of things over the years that have not come true. We want to show them that this is the plan, this is what can happen if there is a peace deal.”

The next stage, before a political deal is attempted, will be to get feedback from the event and agree to commitments for the $50 billion package for Palestine and other regional economies.

“I think you need $50 billion to really do this the right way, to get a paradigm shift,” Kushner added.

US Treasury Secretary Steven Mnuchin said: “I could not be happier how this has gone,” adding that he was “highly confident we will soon have the first $4 billion. It’s going to be like a hot initial public offering.”

Most of the attendees at the event in Manama, Bahrain, gave Kushner’s economic proposals a serious hearing and agreed it was a useful exercise. Mohammed Al-Shaikh, Saudi minister of state, said: “Can it be done? Yes it can, because it was done before. In the mid-1990s to about the year 2000 there was a global coordinated effort by the US and other countries. I was at the World Bank at the time. I saw it. If we could do it then with significantly less money we can do it again.”

Others warned, however, that there was still a long way to go on the political aspects of the Israeli-Palestinian relationship. Tony Blair, the former British prime minister and Middle East peace envoy, said a political deal was essential.

“This is an economic plan that, if it is implemented, is going to do enormous good for the Palestinian people. But it isn’t a substitute for the politics. There will be no economic peace. There will be a peace that will be a political component and an economic component. The economy can help the politics and the politics is necessary for the economy to flourish.

“The politics has got to be right in this sense as well. The obvious sense people talk about is how do you negotiate the contours of the boundaries of a Palestinian state in a two state solution,” Blair said.

Christine Lagarde, managing director of the International Monetary Fund, highlighted the work the fund has done in conflict situations. “We had an exceptional result in Rwanda, and a good economic outcome in Mozambique,” she said. But she contrasted this with disappointing results in other African conflicts.

Lagarde said that the aim of the economic plan should be to create jobs. “The focus should be on job-intensive industries, like agriculture, tourism and infrastructure.”

Willem Buiter, special economic adviser to US banking giant Citi, said there were obstacles to the Kushner plan succeeding. “Necessary conditions for any progress are peace, safety and security. And there must be high-quality governance and the rule of law in Palestine,” he said.

HIGHLIGHTS

• Jared Kushner believes the conflict is a ‘solvable problem economically.’

• The senior adviser vows to lay out political plans at the right time.

• Expert urges external funding in the form of grants or equity, rather than loans.

He also suggested external funding should be in the form of grants or equity, rather than loans. “We should not burden a country trying to escape from its past with high debts,” he added.

Some attendees warned of the risks to investor funds in the current political situation in the Middle East. 

But Khalid Al-Rumaihi, chief executive of the Bahrain Economic Development Board, said: “Risk is not new to the region. We’ve tackled it for the past 30 to 40 years, but that has not stopped investment flowing in.

“Investors trade risk for return, and the Middle East has learned to cope with risk and conflict. There are pockets where the risk is high and Palestine is one of them. But I remain positive. The return in the region is higher to compensate for the risk,” he added.

At a session of regional finance ministers, Mohammed Al-Jadaan of Saudi Arabia said: “The region is in desperate need of prosperity and hope. There is a way forward, but you need political commitment.”

UAE Finance Minister Obaid Al-Tayer added: “We are decoupling politics from economics. If it’s the only initiative on the table we should all give it a chance.”