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SA to sign new nuclear power pacts after court ruling

Many investors view the scale of the nuclear plan as unaffordable and a major risk to South Africa's financial stability.

Newly appointed Minister of Energy Mmamoloko Kubayi takes her oath during the swearing in ceremony of President Jacob Zuma's new cabinet in Pretoria on 31 March 2017. Picture: Reinart Toerien/EWN

JOHANNESBURG - South Africa plans to sign new, more transparent nuclear power agreements with five foreign countries after a high court blocked a deal with Russia due to a lack of oversight, the energy ministry said on Saturday.

South Africa signed intergovernmental agreements with Russia, France, China, South Korea and the United States in 2014 as part of plans to build a fleet of nuclear power plants at a cost of between $30 billion and $70 billion.

Many investors view the scale of the nuclear plan as unaffordable and a major risk to South Africa's financial stability, while opponents of President Jacob Zuma say the deal will be used as a conduit for corruption. Zuma denies allegations of wrongdoing.

State energy firm Eskom says nuclear power should play a role in South Africa's energy mix and will help reduce reliance on coal.

The Western Cape High Court found last month that the agreement with Russia lacked transparency and offered Moscow favorable tax rules while placing heavy financial obligations on South Africa. Earthlife Africa took the department to court citing that government failed to consult the public about its decision.

The energy ministry said it had "major concerns" about the court judgment but would not appeal the ruling. It will continue with nuclear energy plans adhering to stricter procedural guidelines, including consulting Parliament.

"There is no intention to table the current agreements but (we) will embark to sign new agreements with all five countries and table them within reasonable time to parliament," the ministry said in a statement.

Energy Minister Mamoloko Kubayi says her department will strive to continue to implement all forms of energy mix to secure the supply of energy in the country.

The City Press reported last month that the country's nuclear build programme is expected to come into effect in June.

Eskom on Friday reinstated its former chief executive Brian Molefe, a Zuma ally who has supported the nuclear power plan.

Molefe stepped down five months ago after being implicated in a report by the country's anti-graft watchdog into alleged influence-peddling. He denied any wrongdoing.

Some analysts say former finance minister Pravin Gordhan was fired partly because he resisted pressures from a political faction allied to Zuma to back nuclear expansion.

New Finance Minister Malusi Gigaba has said nuclear expansion will only be pursued if it is affordable.

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