Russia and Turkey talking cooperation

17 February 2009

Russia and Turkey have issued a joint declaration identifying nuclear energy cooperation as a key part of their economic relations, as speculation mounts that an agreement on the construction of Turkey's first nuclear power plant is near.

Gul_Putin (Image: Turkish Presidency) 
When Putin met Gul (Image: Republic of Turkey Presidency)


The declaration, covering many areas for future strengthening of bilateral relations, was adopted by President Abdullah Gul of Turkey and Russian Prime Minister Vladimir Putin during Gul's first visit to Moscow. As well as stating that both countries consider cooperation in the peaceful use of nuclear energy as an important part of their trade and economic relations, it also confirmed their commitment to further improve contractual-legal and technical frameworks for nuclear power cooperation.
A bid from a consortium led by Russia's AtomStroyExport (ASE) to build a nuclear power plant in Turkey is currently under consideration by the Turkish Atomic Energy Agency (TAEK). Press reports citing Russian energy minister Sergei Schmatko suggest that the two countries are getting close to agreeing energy deals including a long-term contract to supply electricity to Turkey, as well as the nuclear project. Although the bid from the Russian-Turkish consortium was the only one on the table by the close of the tender in September 2008, negotiations have been continuing on price as the initial offer of 21.6 cents per kWh was over three times the going Turkish wholesale electricity price. ASE has confirmed that it has submitted a revised offer "with account of the present situation at the world market," and according to Turkish news service Hurriyet, the bid now stands at 15.35 cents per kWh.
Nuclear power engineering was one aspect of Russian-Turkish cooperation under discussion at a business forum attended by politicians, economists and businessmen from the two countries during the presidential visit. Timur Ivanov, ASE vice president, said the Russian-Turkish consortium's project to build Turkey's first nuclear power plant was of great importance to both countries. He said the project would create a precedent for the use of the BOO (Build-Own-Operate) model, where a nuclear power scheme would be privately financed with the state guaranteeing the purchase of energy.
The bid from the Russian consortium, which includes ASE, Inter RAO UES and Turkish company Park Teknik, covers the construction of four 1200 MWe AES-2006 VVER reactors to be built near Mersin in the Akkuyu district.