The war in Ukraine has underscored the dangers of energy reliance on Russia for US national security. However, while much attention is directed toward Russia’s use of oil and gas as instruments of coercion on Europe, how Russia and China are replicating Europe’s energy dependency in the Indo-Pacific goes overlooked. As countries in the Indo-Pacific experience rapid economic growth and strive to achieve net-zero emissions, their rising energy needs are driving them to embrace nuclear energy. With strong government support, Russia and China’s state-owned nuclear companies are exploiting this rising demand, leading the way in controlling nuclear plants in this region.

If the US does not respond decisively, a more dangerous energy security crisis will unfold in the Indo-Pacific than what Europe has faced. If any future war happens in the Indo-Pacific, Russia and China’s stranglehold over nuclear power plants would be a game changer, enabling them to disrupt electricity and water supply while making it harder for US allies to communicate and cooperate.

However, mirroring what China and Russia have done—imposing ownership control and debt traps on developing countries—as the Trump administration attempted in 2020, should never be the US’s nuclear energy strategy in the Indo-Pacific. Conversely, the US should treat the export of nuclear plants and reactors not simply as a form of geopolitical competition with Russia and China, but as an opportunity for it to project American values and have a meaningful, positive impact on local communities—the tried and true way for countering adversaries while fostering loyal alliances.

Nothing projects American values and nurtures US allies in the Indo-Pacific better than American aid. During the Cold War, American aid to South Korea and Taiwan funded extensive infrastructure projects. This support fortified a steadfast defense against communism’s advance in East Asia and helped transform both nations from poor and war-torn Japanese colonies into prosperous and staunch US allies in the Indo-Pacific. In today’s new Cold War, American aid to build nuclear energy plants in the Indo-Pacific can play the same role in preventing China and Russia’s nuclear energy expansion and nurturing emerging US allies in this region.

Nonetheless, USAID, the major provider of energy-based American aid, does not include nuclear energy in its energy transition initiative in the Indo-Pacific, though nuclear energy is one of the clean energy options affirmed by the US Department of Energy.  Known as Clean EDGE Asia, USAID’s greatest whole-of-government initiative in this region aims to boost clean energy generation and enhance energy security under climate change. While USAID has made meaningful progress in installing nearly 10,000 megawatts of solar and wind capacity in this region, this is far too little to address the region’s huge clean energy deficiency to meet the net-zero goal. This gap arises from USAID’s exclusive focus on solar and wind energy, overlooking the potential of nuclear energy for the US to level up regional energy security.

Meanwhile, in the Indo-Pacific, countries like Thailand, Vietnam, Indonesia, and the Philippines are eager to expand their nuclear capabilities but face financial hurdles. They are looking for support from other countries to make it happen. USAID’s failure to include nuclear energy in its Clean EDGE Asia initiative means these developing countries could miss out on leveraging USAID’s expertise and partnerships to attract investment. It also leaves them vulnerable to domination by Russia and China in the nuclear energy sector.

The absence of USAID in the Indo-Pacific’s nuclear energy sector has allowed Russia and China to assert dominance over certain countries. In the past decade, this has resulted in these nations losing ownership of their nuclear plants and being burdened with insurmountable debts that will last for decades.

Since 2013, Russia has striven to control the ownership of nuclear power plants in the Indo-Pacific. Rosatom, the Russian state-owned nuclear energy juggernaut and the successor of the Soviet nuclear colossus, has implemented the BOO model—build, own, and operate to control Bangladesh’s sole nuclear power plant, Rooppur Nuclear Power Plant. Russia managed all aspects of the plant’s life cycle, from finance and design to construction, operation, and decommissioning.

Overwhelming debt is another way Moscow exerts control over Indo-Pacific countries. In Bangladesh, for example, Russia owns the Rooppur nuclear plant, meaning Bangladesh cannot get full revenue from electricity sales for 20 years starting from 2027. India is also facing the same risks. India’s largest power plant, Kudankulam, was built by Rosatom with a loan of more than $3 billion from the currently sanctioned State Corporation Bank for Development and Foreign Economic Affairs (Vnesheconombank) of Russia. This situation places India in a difficult position, as repaying the loan during a time of war could indirectly bolster Russia’s conflict with Ukraine through financial support.

China is following in Russia’s footsteps, aiming to impose a debt trap and ownership control over Indo-Pacific countries’ electricity and power plants. In the Philippines, China already owns 40% of the shares of the Philippine State Grid and has imposed significant influence on its operation, management, and technology.

In the nuclear energy sector, China’s Nuclear Energy Going Global program, named after the late Premier Lee Keqiang’s famous declaration, “China’s nuclear energy must go global,” forms part of the Belt and Road Initiative. This program exploits financial difficulties of other countries by providing significant loans and ownership investment, supported by China’s Export-Import Bank and the Silk Road Foundation, to facilitate the export of nuclear plant construction. The program has witnessed an early triumph in enhancing China’s political influence through nuclear energy finance in Pakistan.

The collaboration with China for its nuclear plants in Karachi has led to overwhelming debt and financial burden. While Pakistan is indebted to China’s Export-Import Bank for a $6.5 billion loan, this amount covers only 85% of the total contract value. To commence construction, the Pakistan Atomic Energy Commission had to make an additional $1.15 billion advance payment to China. Moreover, China requires the Pakistani government to provide a sovereign loan guarantee to ensure repayment of the loan. China’s nuclear financial arrangement has sparked fear that Pakistan’s future could be marred with an endless cycle of debt owed to China.

In addition, through long-term contracts for fuel supply and maintenance, China and Russia create a dangerous framework of energy dependency on their nuclear energy supply. Developing countries in the Indo-Pacific are sacrificing their economic sovereignty in exchange for Chinese and Russian nuclear plants.

Russia and China’s strategies are not winning them more allies in the Indo-Pacific but often meet with resistance and tension from local communities. For instance, in Bangladesh, concerns have been raised about Russian ownership of nuclear power plants, citing dangers to the country’s sovereignty in managing its nuclear resources and criticizing the lack of independent supervision in evaluating economic and environmental risks. Criticism against Chinese-built nuclear plants commonly centers on the lack of transparency of the nuclear deal, the exclusion of local communities from decision-making processes, and the exacerbation of urban-rural divides. This trend is evident in recipient countries like Pakistan, India, and Vietnam where local communities are increasingly resisting Russia and China’s ownership control and nuclear energy debt traps.

Therefore, America’s current strategy to compete with China and Russia’s state-owned nuclear energy companies by using their own tactics may not be wise. Building on the Trump administration’s approach, the US intends to utilize government-backed export finance to offer loans and “equity investment,” effectively ownership control, to support US civil nuclear companies’ global expansion. The Trump administration even worked to remove limitations on equity investment from the Development Finance Corporation (DFC) and the Export-Import Bank to mimic Russia and China’s approach. The current strategy could backfire, attracting criticism against the US similar to what local communities levy against Russia and China. As Friedrich Nietzsche cautioned, “He who fights with monsters should take care lest he thereby become a monster.”

Instead of focusing on loans and ownership control, American aid for nuclear energy could be a more potent tool to counter Russia and China’s nuclear dominance by winning hearts in the Indo-Pacific. Providing a democratic and preferable alternative, US aid could help developing nations free themselves from financial burdens that could lead to exploitation by Russia and China during their transition to nuclear power and eventually cultivate more allies in this region.

Aside from the geopolitical ramifications of such dependencies, another key reason why the US should maintain its nuclear energy leadership in the Indo-Pacific is its unparalleled capability to responsibly manage nuclear proliferation in this region. US participation is crucial in ensuring the safe and peaceful use of nuclear technology.

Since the 1970s, in line with its commitment to the Nuclear Nonproliferation Treaty of 1978, the US has introduced stringent nuclear technology export regulations to ensure that its nuclear technologies and facilities are exclusively used for civilian purposes. A cornerstone of these regulations is Section 123 of the Atomic Energy Act of 1954, commonly known as the 123 Agreement. This legal framework ensures that US nuclear technology and facilities exported to civilian nuclear cooperation partners are used solely for peaceful purposes. Crucially, the 123 Agreement mandates adherence to International Atomic Energy Agency (IAEA) Safeguards, designed to ensure that nuclear materials and technology are not diverted to nuclear weapons programs, as a condition for the continuation of US nuclear supplies.

Furthermore, the US insists on a once-through uranium-based fuel cycle, which prevents the reprocessing and reuse of plutonium—a material that can be used to make nuclear weapons. This policy significantly reduces the risk of nuclear proliferation associated with US-supplied nuclear facilities.

In stark contrast, China and Russia do not demonstrate the same level of commitment to their obligations under the Nonproliferation Treaty. China, for instance, is building nuclear plants with a plutonium-based fuel cycle, involving spent fuel reprocessing that can separate plutonium from spent fuel, potentially enabling its use in manufacturing nuclear weapons. Despite China’s defense that the plutonium-based fuel cycle is intended to “save uranium,” it poses considerable proliferation risks. Alarmingly, the fuel for China’s plutonium-based fast breeder reactors (FBRs) is supplied by Russia. A recent report revealed that 55,000 pounds of plutonium-uranium fuel were transferred from Russia to China.

The involvement of authoritarian or politically unstable regimes in the Belt and Road Initiative (BRI), where many of these nuclear projects are located, exacerbates these proliferation risks. The threat of jihadist groups attacking BRI-participating governments and potentially gaining control of Chinese-built nuclear power plants is a serious concern. For instance, Pakistan, a key BRI partner, has faced numerous terrorist attacks by groups like the Tehrik-i-Taliban Pakistan. Should such groups gain control of a nuclear facility, the proliferation risks would escalate dramatically.

In essence, an increase in Chinese-built nuclear power plants in the Indo-Pacific corresponds to heightened risks of weapon-grade nuclear material falling into the hands of terrorists or authoritarian regimes.

Thus, USAID’s role in aiding nuclear power plant construction becomes crucial in reestablishing US nuclear energy leadership in the region. To maximize USAID’s positive impact, it should expand its Clean EDGE Asia initiative to include nuclear energy construction. It should also build on its successful precedents in energy-based aid by leveraging its expertise, fostering private-public partnerships, mobilizing investments for nuclear energy, increasing the cost-efficiency of nuclear energy generation and deployment, and ensuring equalized energy services for households across the region. In doing so, USAID can play a pivotal role in redefining Indo-Pacific’s nuclear energy landscape and growing new allies.

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