Power utility Eskom announced on Friday that it had decided not to proceed with the proposed investment in South Africa's second nuclear power plant due to the "magnitude of the investment".
The R120billion investment would have helped the utility move towards its ambition to generate 20000 megawatts from nuclear reactors by 2025.
"Although we are disappointed by this announcement, the Aveng Group's construction order book remains strong. Given the current economic environment we understand Eskom's decision and we look forward to working with Eskom on other projects, to deliver the required power infrastructure for our country," said Roger Jardine, Aveng chief executive.
Aveng was in the EPR consortium led by Areva of France to build the power plant, while rival Murray & Roberts was in the N-Powerment consortium led by Westinghouse of the US.
The Department of Public Enterprises said the decision not to invest at this time did not mean that the country would not consider making the investment in future.
The Department of Minerals and Energy did warn last month that the global economic crisis would force the government to "reprioritise" its spending plans, particularly related to energy.
Eskom needs R343billion in the next five years, and if it is to double its generating capacity by 2025, this will total more than R1trillion.
The global financial market crisis has made access to funding more difficult and the funding that is available is far more expensive.
The utility is likely to revisit its plans to install additional nuclear ability by 2012 or 2013, once the rest of its build programme has gained momentum, global growth consultants Frost & Sullivan said.
"Within the current financial crisis and the difficulties Eskom has in raising finance, the plan to put their nuclear ambitions on hold certainly makes sense," said Frost & Sullivan energy industry manager Cornelis van der Waal.
He said Eskom was sending out a message that, in the context of the rest of the build programme, it could not afford to construct a nuclear power station right now.
Van der Waal believes that by 2012 or 2013, once the build programme has gained momentum, the nuclear plans would be revisited. - I-Net Bridge