Russia Likely to Extend Credit to Turkey for First Nuclear Plant

Russia is likely to extend credit to Turkey to build the nation’s first nuclear power plant on the Mediterranean coast, the project’s management company said.

Russia has already committed to shoulder 30 percent of the cost through its equity in the venture. The government now “discusses very actively the possibility of participating in project financing farther than their equity investment,” said Alexander Superfin, chief executive officer of Akkuyu NGS.

Turkey, which imported more than $60 billion of energy last year, plans to build its first nuclear plant to increase self-sufficiency and reduce its current-account deficit. The country picked Russia’s state-run Rosatom Corp. and ZAO Atomstroyexport to construct the facility at a cost of $20 billion in 2010.

Of the 30 percent equity investment already committed by Russia’s government and companies, the treasury has pledged 20 percent, Superfin said yesterday in an interview in Ankara. Atomstroyexport is now in talks with “various Russia-based, Russian funds to participate also as creditors,” he said.

Akkuyu plans to complete the 4.8-gigawatt plant by 2023. While the company has “minor concerns” caused by the global economic slowdown, talks with international investors including pension and sovereign wealth funds signal “strong” interest in the project, Superfin said. He expects a final accord on funding within the next two years.

Environmental Approval

The developers will submit a new environmental impact assessment to Turkey next month after their first report was returned with “numerous questions and comments and suggestions for improvement,” Superfin said. He expects the project to attract more investors once it receives environmental approval.

Akkuyu, set up by Russia to operate in Turkey, expects to receive $3 billion through 2015 from the Russian government, keeping it fully funded and giving it time to find new investors to share the financial burden, Superfin said. The Russian companies are in talks with Turkish industrial groups with interests in energy as well as construction businesses that could be building contractors as well as shareholders, he said.

Turkish companies may undertake almost all of the construction and 45 percent of machinery installations, and supply 20 percent of the equipment, accounting for as much as $7 billion of work in total, Superfin said at a seminar yesterday.

Rosatom has already invited Electricite de France SA (EDF) to invest in the plant. There are other non-Turkish companies vying for equity, Superfin said, without identifying any. Rosatom will retain no less than 51 percent of the shares and will fully fund and implement the project alone if necessary, he said.

To contact the reporter on this story: Onur Ant in Ankara at oant@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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