Last Updated: Sun Oct 17, 2010 00:14 am (KSA) 21:14 pm (GMT)

Turkey and Korea aim to finalize nuclear deal

Last month S Korea signed a MOU with Turkey to build a nuclear power plant near the Black Sea town of Sinop (File)
Last month S Korea signed a MOU with Turkey to build a nuclear power plant near the Black Sea town of Sinop (File)

Korea Electric Power Corp (KEPCO) wants a 40 percent stake in a planned Turkish nuclear power plant and would contribute to the financing, Turkish energy officials said on Thursday.

Negotiations are ongoing between state-run KEPCO, Turkey's Energy Ministry and state power producer Elektrik Uretim for a nuclear power plant near the Black Sea town of Sinop, and officials want to finish them before November.

Sources at the energy ministry said that Turkey and KEPCO would provide 30 percent of the funding for Sinop and raise the remaining 70 percent through borrowing.

Turkey seeks to build two nuclear plants to reduce its dependence on imported energy and cover a looming power shortfall. The country wants about 10,000 megawatts of nuclear capacity installed by 2023, according to Reuters Project Finance International (PFI).

London-based Standard Chartered has been appointed as the financial adviser to KEPCO on the project, PFI reported without citing sources. The London-based bank is already working with it on a nuclear project in Abu Dhabi.

While the financing is still in early days, Export-Import Bank of Korea (KEXIM) and Korea Export Credit Insurance Corp (KEIC) are likely to become involved, PFI Editor Rod Morrison said.

Turkish officials remain open to other developers coming into the negotiations, unlike in Abu Dhabi where the talks are closed, PFI reported.

South Korea signed a memorandum of understanding with Turkey in June to cooperate on nuclear power projects, which was seen helping Seoul win an order to build a plant.

An energy official said the Sinop plant would have four reactors and a total capacity of 5,600 megawatts.

The plant is targeted to start operations in 2019, the official said. "The construction is planned to be completed 88 months after the signing of the agreement."

The cost of the Sinop plant is not clear, though analysts have estimated it could reach $10 billion.

In the case of another planned nuclear plant in Akkuyu in southern Turkey to be built by Russian firms, an agreement between Moscow and Ankara dictated a minimum Russian stake of 51 percent, and the Russian firms are expected to own 100 percent. The plant is targeted to operate from 2018.

The cost of the Akkuyu plant was estimated to be $20 billion.

Turkey’s deficit widens

In the same time, Turkey's trade deficit widened by 34.9 percent on a 12-month comparison in June as both exports and imports increased, official data showed on Friday.

The gap reached $5.6 billion from $4.1 billion in the same period last year when the Turkish economy had plunged into recession, the state statistic institute said.

Imports rose by 21.5 percent in June from the same month last year, reaching $15.2 billion, while exports were up by 14.8 percent to $9.6 billion, it said.

In 2009, Turkey's trade deficit shrank by 44.8 percent to 38.6 billion as the country grappled with serious turmoil that caused gross domestic product (GDP) to contract by 4.7 percent and pushed up unemployment.

GDP grew by a spectacular 11.7 percent in the first quarter of 2010, looking set to outpace global recovery and double the government's 3.5-percent target for the whole year.

Market watchers however have cautioned that the figure is essentially the result of the weak base-year effect and does not signify a fast recovery.

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