Rosatom did not wait for Turkish investors

The deal on the sale of the stake in the Akkuyu nuclear power plant is postponed for 2019.
Origin source
The general director of Rosatom, Alexei Likhachev, allowed the transfer of a deal to sell to investors 49% in the Akkuyu nuclear power plant project in Turkey for 2019. At present, the state corporation continues to finance it independently.

The deal on the sale of 49% to the Turkish investors in the Russia-implemented project for the construction of the first Akkuyu nuclear power plant in Turkey is likely to shift to 2019, said Rosatom CEO Alexei Likhachev on Wednesday. "This year, there is little likelihood [of closing the deal]," he said (quoted by Interfax). On the question whether the deal will be held in 2019, Likhachev replied in the affirmative.

The head of the Russian state corporation also said that "there are people willing to invest in the Akkuyu project, and not only in Turkey." "Buyers are changing," he added.

"We are strategically looking for partners, namely partners, for synergy," a representative of Rosatom told RBC. Until the signing of the agreement with investors, the project is funded by 100% by the Russian side to ensure construction of the NPP according to the approved schedule, he added.

According to the plans of the Turkish side, the NPP should be built to the 100th anniversary of the republic - by 2023. Moscow and Ankara concluded an intergovernmental agreement on the construction of the Akkuyu nuclear power plant with VVER-1200 reactors in the Mersin province on the Mediterranean coast in May 2010. The total investment in the project was estimated by Russian President Vladimir Putin at $ 22 billion. At the same time, the project was hampered by foreign policy tensions between Russia and Turkey, as well as Turkish legislation that prohibited the construction of industrial facilities near olive groves.

The Collapsed Consortium

As RBC reported in early February, the initial consortium of Turkish investors, which together with Rosatom was supposed to finance the construction of the first nuclear power plant in the country and which the state corporation announced the summer of last year, collapsed: private companies did not want to invest in the project and choose suppliers on a tender basis, as they intended to offer the services of their contractors on a barter basis. RBC sources reported that the Turkish state energy company EUAS ICC could become a new partner of Rosatom in this project. However, according to one of the interlocutors of RBC, it is ready to buy only 5% of the project.

The Akkuyu project assumes long payback periods due to fixing the price of electricity sales in dollars for 15 years without taking into account inflation ($ 0.1235 per kWh without VAT). Probably, this, as well as the need to separate investment risks and confuses investors, believes Natalia Porokhova, head of the research and forecasting group of the Russian rating agency ACRA.

So far, the Turkish atomic regulator TAEK has not issued a license to Rosatom to build this nuclear power plant, although the state corporation applied for it a year ago. Currently, Rosatom conducts preliminary work on the site of the station in the framework of the limited permission received in October 2017 for the construction of nuclear power plants (without the construction of nuclear facilities).

Fundamental date

As RBC wrote, for the first week of April, the laying of the foundation of the future nuclear power plant with the participation of Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan is scheduled. This was confirmed on Tuesday, March 27, by Turkish Prime Minister Binali Yildirim.

The foundation laying ceremony is just a show, the most important thing now for Rosatom is to attract investors to the project, said the head of the Russian-Turkish analytical center Aydin Sezer. "The Russian state corporation, which has already invested about $ 3 billion in the project, now very much needs partners with money to continue the project. And it turns out that Erdogan, instead of helping Rosatom with this, again in his eastern style only wants to show that "everything is going according to plan, guys," Sezer said.

Despite the fact that Rosatom has already received 55 billion rubles from the state. for the construction of Akkuyu, this and other similar projects for the state corporation are a source of serious risks, says credit analyst S & P Elena Anankina. Attraction of investors would allow to divide financing and risks, after all works on NPP construction - an expensive and technically complex project - are just beginning, she believes. Besides, the world nuclear power industry is going through difficult times, and because of failures with major projects, the foreign competitors of "Rosatom" - Areva and Westinghouse - experienced serious difficulties, says Anankina.

A project with a geopolitical meaning

The Turkish newspaper Al-Monitor writes that rumors appeared in Ankara that the Turkish welfare fund could be invested in the project of Rosatom - a governmental organization established in the summer of 2016 that is investing in strategic projects. Political analyst from Turkey Kerim Khas recalls that the Akkuyu project has geopolitical significance for Russia. "Turkey is a member of NATO, unlike China, India and Bangladesh, where Russia also builds nuclear power plants. Turkey's relations with the NATO bloc have worsened, including after the purchase of S-400 anti-aircraft missiles from Russia, and the start of the Akkuyu project can spoil them, which plays into Russia's hands, "he said.

In Ankara thought about the development of nuclear power in the 1970s, but a number of tenders for the construction of nuclear power plants was canceled because of problems with funding and public protests.

In 2013, Turkey also concluded an intergovernmental agreement with Japan to launch a second nuclear power plant - Sinop - by 2023, which will be built by a consortium of Japanese Mitsubishi Heavy Industries and French Engie. According to the Turkish media, 49% of the project at a total cost of $ 16 billion will be from EUAS.

An order for the construction of a third nuclear power plant in Turkey can get China, with which Turkey signed an intergovernmental agreement in 2016.