Russia Signs $20 Billion Deal to Build Turkey's First Nuclear Power Plant

Russia signed an agreement on building a power plant with four nuclear reactors on Turkey’s southern coast at a cost of about $20 billion after more than a year of negotiations.

“This will be the first case in which Russia not only builds a power plant, as we have in Iran and India, but will also own it,” Sergei Kiriyenko, head of Russian state nuclear holding company Rosatom Corp., told reporters in Ankara during a trip by President Dmitry Medvedev to the Turkish capital.

Construction of Turkey’s first nuclear power plant will take seven years, Prime Minister Recep Tayyip Erdogan said.

ZAO Atomstroyexport, Russia’s reactor builder, will own 100 percent of the project, and may later sell as much as 49 percent to investors, Kiriyenko said. “Turkish investors are interested. We’re also holding talks with European investors.” He declined to name potential buyers.

Russian Energy Minister Sergei Shmatko said in February 2009 that a group of companies led by Atomstroyexport had bid for the Turkish power plant contract. Turkish authorities delayed awarding the contract since the tender in September 2008, as Russia had submitted the only bid.

“For Turkey, which is just starting to develop nuclear energy, this is a smart move, since they don’t have to pay anything up front, just provide the site,” Kiriyenko said. “Russia will bear all the costs and recoup them through guaranteed electricity sales” at a fixed price, he said.

Kiriyenko said discussions with Syria on building a nuclear power plant are in the “preliminary stages.”

Yesterday in Damascus, Medvedev said he had discussed the possibility of building a plant with Syrian President Bashar al- Assad, and that cooperation on nuclear projects may get a “second wind.”

To contact the reporter on this story: Ilya Khrennikov in Ankara at ikhrennikov@bloomberg.net

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