Rosatom to Build Kazakhstan’s First Nuclear Power Plant (Part One)

Executive Summary:

• Kazakhstan has selected Russia’s Rosatom to construct its first post-Soviet nuclear power plant (NPP), despite earlier indications that China’s CNNC would win the bid. A second plant may still be awarded to CNNC.
• Environmental risks, particularly regarding Kazakhstan’s nuclear legacy, the unresolved issue of the disposal of nuclear waste, and water scarcity, have sparked public opposition.
• Rosatom’s problematic record in building a NPP in Belarus, which included accidents, a lack of transparency, and long delays, and the effects of potential Western sanctions on Rosatom, threaten plans for the construction of the plant.

On June 14, Kazakhstan selected Russia’s state-owned nuclear corporation Rosatom to build its first nuclear power plant (NPP) since Soviet times (RBC, June 16). In October 2024, over 70 percent of respondents in a popular referendum in Kazakhstan supported the idea to construct a new NPP (Central Election Commission of the Republic of Kazakhstan, October 7, 2024). Kazakhstan officials, and President Kassym-Jomart Tokayev in particular, have been determined to construct a new NPP for some time (Rtvi.com, October 8, 2024). In its bid, Rosatom competed against China National Nuclear Corporation (CNNC), Korea Hydro & Nuclear Power (KHNP), and Électricité de France (EDF). Kazakhstan’s selection of Rosatom came as a surprise, as just several days before the announcement of its chosen vendor, CNNC was viewed as a clear favorite to construct this particular plant. Kazakhstan plans to sign an agreement on nuclear cooperation with the People’s Republic of China (PRC), however, and announced that a second NPP is likely to be built by CNNC (Agency of the Republic of Kazakhstan for Atomic Energy, June 14; see EDM, July 9). Notably, Rosatom is said to head an “international consortium” rather than build the NPP single-handedly. Kazakhstan has taken certain measures to reduce risks and uncertainties associated with the choice of a Russian service provider, as choosing Rosatom poses economic and environmental risks.

When Kazakh officials intensified discussions about the need to construct a new NPP, several local experts, civil society groups, and the public expressed deep concern about the environmental risks. Such concerns are not only fuelled by memories of the Chornobyl and Fukushima nuclear disasters. They are also informed by Kazakhstan’s Soviet past. Between 1949 and 1989, the territory of Soviet Kazakhstan experienced no fewer than 468 instances of nuclear weapons testing (United Nations, August 29, 2023).

As a country that was subjected to this nuclear experiment, the population remains extremely sensitive to virtually everything related to the nuclear domain (Masa.media, December 5, 2023). Specific fears include potential harm to the fragile ecosystem of Lake Balkhash, where the plant is planned to be constructed. The lake is already experiencing drying and may face further degradation from plant operations (see EDM, March 30, 2021). Russia’s design of pressurized water reactors (PWR) called VVERs, meaning water-water power reactors (водо-водяной энергетический реактор (ВВЭР), vodo-vodyanoi enyergeticheskiy reaktor), relies on water for cooling and related operations (Rosatom, accessed July 11).[1] This poses a major problem for Kazakhstan. Kazakhstan’s water resources are stagnating, and the situation is forecasted to aggravate further by 2037, when construction is expected to be finished (ORDA, February 16, 2024; see EDM, March 30, 2021). Moreover, experts emphasize that there is currently no known way to manage nuclear waste safely, meaning this issue would be inherited by future generations (Radio Azattyq, September 18, 2024). Looking at Kazakhstan’s decision from this angle—and taking into consideration an example of Rosatom’s NPP built in Belarus—the choice of a Russian provider seems rather controversial.

Similar to Kazakhstan, Belarus also selected Rosatom to construct its first NPP (BelTA, November 4, 2013). Scandals related to the construction of the Astravets-based NPP haunted the process from its early days. The first such episode occurred in 2016, when a group of Belarusian activists claimed that Minsk was withholding information about an accident related to the reactor pressure vessel (Radio Azattyq, August 4, 2016). Officials later acknowledged that an “incident” had taken place on the construction site (Energobelarus.by, July 27, 2016). The Belarusian opposition has since revealed that a staggering 18,000 incidents of varying scales had occurred during the construction of the NPP and afterwards (Greenbelarus.info, December 22, 2021). A report from the International Strategic Action Network for Security (iSANS) highlighted multiple instances of information concealment related to the construction and operation of the NPP (iSANS, March 7).

In the event of potential environmental incidents on the construction site or following the official launch of the NPP, Kazakhstan would incur both direct and indirect economic losses. Germany and the PRC have expressed interest in exploring cooperation in developing Kazakhstan’s renewable energy potential, with a focus on green hydrogen in particular. Kazakhstan is also exploring the possibility of exporting this energy to the European Union (The Astana Times, June 24). Given that the production of green hydrogen requires massive amounts of water, any incident could jeopardize Kazakhstan’s ambitious plans for developing this industry.

There are also direct economic issues that Kazakhstan might face as a result of selecting Rosatom as its provider. First, the financial aspect of the project remains unclear. Kazakh sources suggest that Russia has reportedly offered a long-term export credit, yet no specific details have been published (Tengri News, June 16). Kazakhstan-based experts, even those who underscore positive aspects of choosing Rosatom as a contractor, have pointed out that Russia appears to have already failed to provide necessary funding for three combined heat and power facilities in Kokshetau, Semey, and Oskemen (Ust-Kamenogorsk) despite officially signing an inter-governmental agreement in April 2024 (Ratel.kz, May 6). It is unclear what exactly occurred with these projects, but Kazakhstan is considering collaboration with Chinese or South Korean companies moving forward (Central Media News, July 9). This poses a question about Russia’s ability to provide necessary funding for the construction of the NPP in full and without delays, which was the case with the construction of the NPP in Belarus.

The second aspect is related to anti-Russian economic sanctions. Despite Rosatom not having been sanctioned, the Russian side should not be excessively optimistic. In 2024, the United States sanctioned the Russian uranium industry, which Russian experts had considered indispensable to the U.S. supply chain (see EDM June 3, 2024). Based on available information, in case Rosatom is placed on the sanction list, it is unclear how Kazakhstan would be able to navigate this precarious situation. Judging by the example of the first Turkish NPP in Akkuyu, where construction was considerably delayed due to secondary sanctions, Kazakhstan could face similar challenges (TASS, December 16, 2024; see EDM, June 25).

Finally, there are issues related to the potential profits from a Russian-built NPP. In the case of Belarus, which received a $10 billion loan from Russia to construct its first NPP, the country’s ability to make a profit from the NPP—or even repay the loan to Russia—has been hindered by the rejection of some EU countries to purchase energy from Belarus (Delfi.lt, August 27, 2020; RBC-Ukraine, July 1, 2021). Additionally, the International Atomic Energy Agency (IAEA) reported that the NPP was operating at about half of its installed capacity during its first two years (IAEA, accessed July 11). A somewhat similar situation developed around the Akkuyu NPP, where the expected price of electricity might be several times higher than the price of solar-generated electricity (Radio Azattyq, April 25; see EDM, June 25).

The economic and ecological sustainability of Kazakhstan’s choice of Rosatom to construct its first NPP leaves many questions and uncertainties. Part two will address the geopolitical factors in this situation.

Note:

[1] Pressurized water reactors (PWRs) are the most common type of reactor used globally today.