- The Akkuyu nuclear power plant will be the first in Turkey to experience problems due to the Russian invasion of Ukraine.
- The Akkuyu nuclear power plant will meet about 10% of Turkey’s energy needs when its four 1,200 megawatt reactors are operational.
- The first reactor of the Akkuyu Nuclear Power Plant, is located on the Mediterranean coast near Mersin. The nuclear power plant is due to start production in 2023.
Nuclear Plant Akkuyu will be the first in Turkey to experience problems due to the Russian invasion of Ukraine. Sanctions imposed over the invasion of Ukraine complicate the construction of a $20 billion Russian nuclear power plant in Turkey.
These obstacles delayed this important project for Turkey. The Akkuyu nuclear power plant will meet about 10% of Turkey’s energy needs when its four 1,200 megawatt reactors are operational. Russia’s invasion of Ukraine has raised new concerns about Turkey’s first nuclear power plant. The nuclear power plant was built by Moscow’s state-owned nuclear company.
The first reactor of the Akkuyu Nuclear Power Plant, is located on the Mediterranean coast near Mersin. The nuclear power plant is due to start production in 2023. However, a potential block on financing and equipment from third countries has threatened to delay the $20 billion project. According to Turkey’s Nuclear Regulatory Authority, the project is fully financed by the Russian capital.
Turkish and Russian officials have discussed potential issues, including finance and equipment procurement from third countries. Rosatom Yang, the Russian company behind Akkuyu has so far escaped sanctions, but the option has reportedly been discussed by the United States. The sanctions against Rosatom will likely affect the flow of equipment to Akkuyu. As a result, suppliers are prohibited from providing energy industry equipment, technology and services.
Banks such as Sberbank, Russia’s largest financial institution and a major backer of nuclear plants have been affected. Since 2019, Sberbank has provided a $1.2 billion loan for the Akkuyu nuclear power plant. Sovcombank, another sanctioned Akkuyu lender, made a $300 million loan in March last year.
According to the CEO of Akkuyu, a large amount of equipment is produced for factories in countries such as the Czech Republic, Hungary, and South Korea. The main components are manufactured by GE Steam Power, a subsidiary of General Electric, in France, while French company Assystem is also involved in construction supervision.
The Akkuyu project is the first in the global nuclear industry based on a build-own-operate model. Thus, Russia is responsible for all capital expenditures during the construction phase.
With sanctions, this model is risky because it is more difficult for Russia to allocate funds. In addition, another pressure on its international reserves, half of them have been frozen. Russia is likely to pressure Turkey to find a local company to take up to a 49 percent stake in Akkuyu, Ulgen added. However, talks with three Turkish companies broke down in 2018. Turkey’s current economic crisis makes domestic finance seem unlikely to be available and international investors will be wary of Russian-controlled projects.
Akkuyu has proven to be a controversial project since it started 12 years ago. The plant will be owned by Russia for the first 25 years, growing Turkey’s energy dependence on its northern neighbour. The broad concession to Rosatom has led commentators to compare the project. This project was compared to the benefits of unilateral trade given to European powers by the Ottomans.
Environmental concerns, the location of the plant near the earthquake fault and complaints about working conditions all overshadowed the construction. The plant is one of the more visible symbols of the deep economic ties between Russia and Turkey dating back decades. Russian engineers developed other pillars of Turkey’s industrial heartland, including aluminum factories, textiles and glass-making facilities. The pillar is a pillar that was built in addition to the oil refinery built by the Soviet Union near the city of Aliaga in the 1970s.
Ankara, which on Tuesday hosted the latest round of talks aimed at ending the war in Ukraine. However, Turkey is also heavily dependent on Russian energy, which will make up the bulk of the country’s total $29 billion imports by 2021.
And it’s not closing its airspace to Russian planes, fearing a blow to the business supply chain. Business inflation is already above 54% and is undermining Erdogan’s prospects for re-election next year.
Recognizing Ankara’s economic vulnerability, Western allies have refrained from pressuring Erdogan to go along with their sentence in Moscow. But as with any country that traded with Russia, the war came at a cost. The fighting has hampered the delivery of key supplies to Turkey including sunflower oil and wheat, as well as pig iron for steelmakers. Turkey’s exports to Russia halved while exports to Ukraine stopped, the central bank said last week.
Editor: Riana Nurhasanah