On March 1, Sri Lanka’s government announced its intent to explore cooperating with Russia to build on-shore or off-shore small modular reactors with a power capacity of up to 100MW per unit to ease an energy crisis that has contributed to the country’s worst economic crisis in 70 years. Rosatom’s successful proposal offers to build the reactors, train Sri Lankan technicians, and to take back and reprocess waste. In parallel, Sri Lanka’s government is working with the International Atomic Energy Agency. The agreed proposal follows an EU decision to scratch plans to sanction Russia’s nuclear sector.
Why it matters: Russia’s nuclear industry has thus far largely avoided disruptions that have afflicted its fossil fuel industries, partly because of the EU’s reliance on Russian nuclear materials and technology. Eighteen of the EU’s nuclear reactors are Russian built. Since Russia’s invasion of Ukraine, Finland has cancelled a contract with Russia to build a new nuclear plant, though both Bulgaria and Hungary appear to be continuing with similar plans. Russian nuclear reactors generate 37% and 42% of electricity in Bulgaria and Hungary, respectively. Both European and American next-generation reactors will rely upon high-assay low-enriched uranium (HALEU), currently available only from Russia. European and American enrichment plants are still multiple years from meeting expected Western demand.
As a rapidly developing region, and one less troubled by Russia’s invasion of Ukraine than the West, Asia is becoming an increasingly substantial market for not only Russian oil and gas, but also Russian nuclear energy. In addition to its Sri Lanka plans, Rosatom signed a nuclear power deal with Myanmar in February, and has existing cooperation agreements with Vietnam, Indonesia, and Bangladesh, among others. Despite diplomatic pressure from the West, Russia continues to play the cards it holds to promote its economic and geopolitical interests.