Negotiations near an end for Turkey?

07 August 2009

A nuclear cooperation deal has been signed by Russia and Turkey, while finance for Turkey's build project is revised in progress towards nuclear power's introduction.


Sergei Kiriyenko signed off the accord, which is a prerequisite to any commercial contract for nuclear development, yesterday during prime minister Vladimir Putin's visit to the Turkish capital Ankara. The head of the Turkish Atomic Energy Agency, Zafer Alper, signed for Turkey.


The country has been aiming to begin using nuclear power for decades. Its latest request for tenders stated that contracts for new reactors would be placed on a build-own-operate basis, where the vendor would manage the plant and finance the construction. For its part, Turkey would guarantee to buy certain volumes of power at an agreed price up to the end of 2030 and at the market price thereafter.


Unfortunately the details of the terms proved unsatisfactory for most and in the end only a Russian-led consortium actually submitted a bid. This disapointment for Turkish planners was doubled when the cost of the Russian bid worked out far above the current market price for power.


Progress since then has been slow, but both sides have engaged in finding a way to make the project feasbile and the cooperation agreement could be taken as a sign of their seriousness. The Russian group has revised its bid, but it remains relatively high in the opinion of the Turkish government. The latest moves include an offer from Turkey to take a 25% stake in the project in exchange for a further reduction in price. Energy minister Taner Yildiz explained this option last week in an interview with CNN Turk.


The Russian offer is to construct four VVER pressurized water reactors with 1200 MWe capacity each. AtomStroyExport would lead construction along with Park Teknik of the Turkish conglomerate the Ciner Group, while Russia's Inter RAO UES would operate the reactors.


As well as the cooperation deal, Turkey and Russia also signed a standard agreement on notification of radioalogical incidents.