By Jana al-Masry | 2024-02-18

CAIRO -- Egyptian-Russian nuclear cooperation will place Egypt under the guillotine of Russian political control, experts warn, noting that the move will have major negative repercussions for Egypt over the long term.

Cooperation of this nature will prove especially problematic for Egypt at a time when Russia and the West -- which rejects Russian attempts to exert political control over other nations -- are at loggerheads, they said.

In late January, Egyptian President Abdel Fattah al-Sisi and Russian President Vladimir Putin took part, via videoconference, in the official ceremony for laying the foundation for a fourth reactor at El-Dabaa nuclear power plant, Egypt's first nuclear power project.

The joint appearance of the Egyptian and Russian presidents, even if virtually, during the inauguration of a nuclear power plant unit at this moment has "political connotations," political researcher Abdul Nabi Bakkar told Al-Fassel.

It sends a message about Egyptian-Russian cooperation at a time when it is unwise to appear to be favoring one side over the other on the world stage, he said.

The principal Russian loan to build the plant, of more than $25 billion, may be an attempt by Russia to twist Cairo's arm amid the financial pressure Egypt is facing, Bakkar said.

Contemporary history shows "that countries that fell under Russian hegemony have suffered and are still suffering from political, economic and security turmoil," he added.

The dire situation some African countries -- and Middle Eastern countries such as Syria -- are facing "is the clearest evidence that Russia is invading with the aim of taking control," he said.

Russia does not intervene in foreign countries to support the populations of these countries, as it claims, he noted, "but rather for political and material gains and nothing more."

"The current plight of Syria is the deepest condemnation of Russia, which actually contributed to the destruction of Syrian society and was able to dominate the natural resources of trade, oil and phosphate," he said.

Losses in the long term

Despite any future gains Egypt will obtain from nuclear energy, "the losses may be more significant in the long term," political researcher Ahmed Afifi told Al-Fassel.

"Egypt's cooperation with Russia, especially in the nuclear field, is a strategic cooperation that will cause Egypt many problems," he said.

Cairo's move to showcase its nuclear cooperation with Moscow at this time cannot be explained, he added, other than clearly stemming from the economic crisis that Egypt is now facing.

The decline in tanker traffic through the Suez Canal as a result of the Iran-backed Houthis' attacks on commercial tankers also contributes to the economic headwinds Egypt is facing, Afifi said.

Russia's hosting of a Houthi delegation on January 25 -- seen as a tacit endorsement of the group's ongoing attacks in the Red Sea -- is a sign that it does not have Egypt's best interests at heart, observers say.

"In search of political diversification, Cairo has widened its exposure to debt risk as Russia is building one of the country's most critical infrastructure assets," Marina Lorenzini wrote in a December 20 report for the Bulletin of the Atomic Scientists.

She warned that the nuclear plant project could alter the Russia-Egypt relationship, possibly undermining Egyptian sovereignty.

Sovereign debt risk

"In the next decade, El-Dabaa has the potential to produce some positive impacts, but it will also deepen the bilateral Egypt-Russia relationship and may push Cairo into a dependency on Moscow in some arenas," she said.

Moscow has agreed to fund 85% of the project ($25 billion), while Cairo committed to raising the remaining 15% ($5 billion).

But with Egypt being the world's second most vulnerable country for sovereign debt risk, it is unclear how it will generate that sum for the El-Debaa project anytime soon, Lorenzini said.

"The lack of dollar availability, more anticipated rounds of currency devaluation, and scarce donor appetite from Gulf states only exacerbates the country's economic woes," she added.

To build the El-Debaa nuclear reactor, Russia's state-owned nuclear energy company, Rosatom, has proposed a novel build-own-operate model.

According to that model, Russia will fund nearly all construction cost in exchange for, in part, a repayment plan based on future electricity revenues, Lorenzini explains.

On the other hand, the typical model for public-private infrastructure projects -- the build-operate-transfer model -- calls for the private entity to return control of the infrastructure asset after getting its financial investment back.

Prospects for Egypt to restructure its debt and enact agreed-upon International Monetary Fund (IMF) reforms in the next decade are "dim," Lorenzini said -- "and Moscow is well positioned to take advantage of this vulnerability."

However, by cooperating with Russia on nuclear projects, Egypt finds itself aligning with a pariah state whose prospects of prosperity are far from certain.

"As sanctions and the war effort in Ukraine continue, Moscow may deprioritize such overseas projects and give preference to its own military budget, civil servants and infrastructure," Lorenzini wrote.

Other examples exist of developing countries allowing major powers to build costly and technical infrastructure projects, only for those countries to eventually find themselves stuck in a debt trap, such as the China-funded Hambantota Port in Sri Lanka.

"A lot of these characteristics seem to be present in the El-Dabaa site, which will make Cairo vulnerable to Russian conditions for the next century," she said.

"To maintain a level of independence, Cairo should seriously engage with the IMF and continue to build up a competent indigenous workforce capable of fully operating and maintaining a nuclear power plant."