At a time when clean and flexible energy solutions are gaining momentum, nuclear microreactors have emerged as a promising technology with the potential to reshape global energy consumption.
For Pakistan, a country with a strong track record in the peaceful use of nuclear technology, microreactors could offer a compelling solution to its longstanding energy challenges. Expensive and inconsistent energy supplies have hindered Pakistan’s economic growth, limiting its ability to fully participate in Asia’s rising economic prosperity. However, advancements in microreactor technology, such as Westinghouse’s eVinci and Radiant’s Kaleidos models, highlight how compact and efficient power systems can address these critical energy challenges. By offering a viable alternative to traditional energy production, microreactors also play a pivotal role in combating global climate issues, paving the way for a cleaner and more sustainable future. By embracing this innovative technology and taking proactive steps, Pakistan has the opportunity to reap its benefits.
With $5 million in funding from the U.S. Department of Energy (DOE), these innovative reactors are scheduled for testing at the DOE’s DOME facility in Idaho by 2026. Microreactors are compact nuclear reactors, roughly the size of shipping containers, designed to generate emission-free electricity. Their affordability and enhanced safety stem from being manufactured in factories and then transported for installation at designated sites. Thanks to their small size and portability, microreactors can be rapidly deployed, even in remote or off-grid locations. While traditional nuclear reactors produce around one gigawatt of power, microreactors generate up to 50 megawatts, making them ideal for smaller-scale applications. These reactors are even smaller in size compared to Small Modular Reactors (SMRs), being uniquely suited to power small city blocks, disaster-stricken areas, military installations, and even future lunar bases, offering a versatile and sustainable energy solution for a wide range of needs.
These reactors operate autonomously, requiring no human supervision, and are designed to maintain low operating costs. They are poised to replace diesel and gas generators across seven key market sectors, including agriculture, healthcare, construction, and data centers. By offering a cleaner and more efficient alternative, microreactors can significantly reduce expenses, particularly in industries like mining where diesel-powered systems are not only costly but also environmentally damaging. In mining operations, for example, microreactors can power excavation equipment at a lower cost while minimizing environmental impact. Beyond mining, their versatility extends to applications such as water purification, district heating, and powering military installations. With their ability to provide clean, reliable energy, microreactors can play a transformative role in disaster recovery efforts and other mission-critical operations, enabling a shift away from fossil fuels. This transition not only reduces pollution but also supports global climate change mitigation goals, making microreactors a vital tool in the pursuit of a sustainable energy future.
Interestingly, nuclear microreactors like the eVinci and Kaleidos can produce energy for up to eight and five years, respectively, eliminating the need for constant fuel deliveries that are typical of diesel generator systems. By integrating microreactors into Pakistan’s energy infrastructure, the country could significantly enhance its energy security, reduce its ecological footprint, and move toward more sustainable economic growth. However, financing microreactor projects presents a considerable challenge, requiring careful planning and robust mechanisms. To meet Pakistan’s energy needs through microreactors, the country must establish a sustainable funding strategy for this sector. But the question here arises that what financing models could be used to support microreactor development in Pakistan? Here are some potential sources of financing micro nuclear reactors in Pakistan.
Public-Private Partnerships (PPP)
The government of Pakistan can collaborate with Private sector to finance and build micro reactor projects. In this model, the private investors provide initial capital and government sector provides regulatory support. Pakistan’s PPP framework has undergone significant development in recent years as the government increasingly turns to private sector participation to address infrastructure gaps and drive economic growth. The PPP model has experienced a pertinent development in recent years. The government has increasingly turned to private investors for addressing infrastructural gaps in order to boost economic growth.
There are many PPP projects that have been successfully executed over the years in Pakistan. The PPP models that have been implemented are build-operate-transfer (BOT), build-own-operate-transfer (BOOT), and design-build-finance-operate-transfer (DBFOT). Some of the executed PPP projects are: Habibabad Bridge (N-5) (2015), Lahore – Islamabad Motorway (M-2) (2016), Lahore – Sialkot Motorway (LSM) (In progress since 2017) and Karachi – Hyderabad Motorway (M-9) (In progress since 2018).
Sovereign Green Bonds & Climate Finance
Pakistan can leverage its stance on climate change as being one of the most vulnerable countries to climate change. For this purpose Pakistan can issue sovereign green bonds to attract international investors. Micro nuclear reactor being a clean energy project can thus be benefited from this source of funding. On May 28, 2021, the Water and Power Development Authority (WAPDA) of Pakistan made a big announcement by issuing its first green Eurobond (GEB), the Indus Bond, for a period of ten years in order to generate $500 million at a competitive interest rate of about 7.5%. Moreover, climate finance mechanism under UN can also provide grants or easy loans for micro nuclear reactor projects.
International Collaborations & Technology Transfers.
Bilateral agreements and international collaboration can play a significant role for Pakistan in developing its nuclear energy technology. China being Pakistan’s regional partner has always helped Pakistan with the construction of nuclear power plants. On July 14, senior Pakistani and Chinese officials attended the televised groundbreaking event at Chasma, where China is building a new 1,200-megawatt nuclear reactor for Pakistan in a bilateral deal estimated to be worth $3.5-4.8 billion. The reactor, Chasma-5, features a third-generation Chinese design known as the Hualong One. As part of a long-standing nuclear energy relationship, China previously supplied Pakistan with four other reactors.
Moreover, Pakistan, as a responsible nuclear power, should expand its collaboration with the International Atomic Energy Agency (IAEA) Pakistan should Increase its participation in IAEA’s Small Modular Reactor (SMR) working groups. This participation could enhance credibility and position Pakistan as a responsible actor in nuclear innovation.
Power Purchase Agreements (PPA)
Another effective strategy could be forging Power purchase agreements (PPA) in which industrial sector like textile, mining and military facilities could commit to buying power from micro reactors. Such kind of agreements could provide financial predictability and encourage private sector to fund micro reactor projects in the country. Some examples of this PPA in Pakistan are: Sindh Engro Coal Mining Company Limited (SECMC) signed a Private Power Purchase Agreement (PPA) with a solar power plant for a 5MW solar-based power generating system on a 15-year “take or pay” arrangement. Similarly, COMSATS University Islamabad (CUI) and M/s DCH Solar Giga PVT LTD inked a Power Purchase Agreement for a 300 KW solar power developing the venture on a Build-Own-Transfer (BOT) basis. Additionally, a standard energy purchase agreement for solar electricity involves a private energy firm (seller) and the Central electricity Purchasing Agency (CPPA), which acts as the buyer on behalf of distribution companies owned by the Water and Power Development Authority (WAPDA). Other renewable energy sources, such as geothermal, wind, and hydropower, are now increasingly be covered by PPAs in Pakistan.
International Regulatory Concerns
These microreactors, generating less than 20 megawatts, offer flexibility and enhanced safety features, making them ideal for decentralized use differing from the Small Modular Reactors (SMRs), which are more equipped for the centralized roles. However, their deployment faces regulatory hurdles. Traditional frameworks, designed for large reactors, struggle to adapt to microreactors’ unique designs and smaller scale. Streamlining licensing processes, reevaluating emergency planning zones, and strengthening oversight are essential to safely integrate this technology.
Private companies, including tech giants like Amazon and Microsoft, are driving interest in towards smaller reactors, but their involvement adds pressure to speed up approvals, risking safety compromises. Additionally, the use of advanced fuels raises proliferation concerns, requiring strict controls. International collaboration and updated regulations are crucial to ensure microreactors can deliver clean energy without compromising security. By addressing these challenges, microreactors could play a key role in a sustainable energy future, powering communities and industries while keeping safety at the forefront.
About authors
Qurat-ul-Ain Shabbir is a Research Officer at the Center for International Strategic Studies, AJK. She is also pursuing PhD in Defense and Strategic Studies from Quaid-e-Azam University Islamabad. Her areas of research are human security and the civilian use of nuclear technology.
Hira Bashir is Associate Research Officer at the Center for International Strategic Studies (CISS) AJK and also Pursuing MS from Muslim Youth University Islamabad. Her area of research is civilian use of nuclear technology.
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