Atucha III on pause: signature with China for the construction of the new nuclear power plant in Argentina postponed

Far away seems to be that first of February last year when Governor Axel Kicillof signed the contract with the China National Nuclear Corporation (CNNC) and Nucleoeléctrica Argentina (NA-SA) for the construction of the fourth nuclear power plant in the country, Atucha III.

That first photo represented the signing of a commercial contract between the parties, after which a series of necessary conditions must be fulfilled until the work actually gets underway. One of them, and possibly the most important, is the financial issue.

To date, Argentina and China have not reached an agreement on the financing of the construction of the nuclear power plant or the repayment rates. As a result, the project is at a standstill. According to TN, no Chinese delegation has visited the Atucha Nuclear Center in Zárate for almost 6 months.

The conflict over financing

The project was budgeted at US$ 8.3 billion and it was stipulated that 85% of the financing would be provided by a consortium of Chinese banks led by ICBC. However, the Ministry of Economy knows that Argentina is not able to take charge of the remaining 15% and is looking for China to take charge of the total amount of the work.



"Nobody is going to embark on an 8 billion dollar project without having the financing assured", admitted to TN José Luis Antúnez, the president of NASA, the state-owned company that manages the three existing nuclear power plants in Argentina.

The first deadline to close the final contract expired in October last year and the Energy Secretariat requested an extension, which was granted until October this year, as detailed by the head of NASA. This does not mean that the work will start during these months, but that the conditions will continue to be negotiated to try to reach a final agreement.

It is worth emphasizing one point. The negotiation for the financing of the project is not on behalf of either Nucleoeléctrica or the Chinese nuclear company, but it is at the state level because "the awarding of the contract was not made through a public tender but through a treaty in force between both countries since 2014 that provides for this type of mechanisms for cases" such as Atucha III, Antúnez explained.

Who should negotiate it then? The Ministry of Economy through the Secretariat of International Economic and Financial Affairs. But, as mentioned by the president of NASA, another issue is of utmost relevance: the prioritization of the project. A previous and internal step of each country that is needed to reach a rubric and subsequent monetary disbursement.

"Argentina has not prioritized it, China has since 2017 when they started negotiating the construction of Atucha III", detailed the head of the Argentine nuclear company during a TN tour of the Atucha Nuclear Complex. This same lack of prioritization was blamed on the former Secretary of Strategic Affairs, Gustavo Beliz, from different sectors close to Kirchnerism.

The political background and the pressure from the U.S.

Behind every economic issue there is a political background, and even more so in this case. According to what TN has learned, the Government admits that neither Alberto Fernández nor Sergio Massa are willing to give the order to sign a contract of such magnitude, which will heavily indebt the country with a work that may not even be finished during the next presidential term.



There is also the increasingly strong pressure from the United States for Argentina not to continue deepening the already established commercial and strategic link with China. The construction of a nuclear power plant with financing from Beijing is one of the projects that do not generate any sympathy in Washington.

In the last months, the Casa Rosada adopted a pendulum position between both powers, with the urgency of receiving the support of Joe Biden's administration in the negotiation with the IMF and getting more oxygen for these months prior to the elections.

Some people in the Government are hopeful that, during the trip to China at the end of the month, Sergio Massa will put the discussion about the financing of Atucha III on the agenda. But the more realistic ones also assure that this is not the priority today, and that the project for a new nuclear power plant in Argentina will have to wait.