ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter

2 Japanese companies aim to fund 30% of Turkish nuclear project

TOKYO -- Mitsubishi Heavy Industries and trading house Itochu are working on a deal to take a combined stake of 30% in a nuclear plant project in Turkey, seeking opportunities abroad amid a dearth of new business at home.

     In the 2 trillion yen ($15.8 billion) project, the Japanese duo and French power utility GDF Suez are expected to hold a combined interest of 51% in a joint venture that will build and operate a nuclear plant in the Black Sea city of Sinop.

     Mitsubishi Heavy and Itochu are considering owning about 15% each in the company, or about 180 billion yen in all. The percentage and the total cost of the project may change after a feasibility study.

     Under an agreement between the Japanese and Turkish governments, financing will consist of 70% lending and 30% equity. The Turkish side will take a 49% stake in the joint venture, with state-owned power company EUAS holding shares. Of the remaining 51%, the French company will hold 21% and the Japanese side 30%.

     Each reactor will cost about 500 billion yen to build. If all goes according to plan, construction will begin as early as 2017 to build a total of four reactors. The first would begin operation in 2023 and the last in 2028.

     The joint venture will repay the investments with revenue from electricity sales. A 20-year agreement with a Turkish utility calls for average prices of 10.8 cents to 10.83 cents per kilowatt-hour.

     Mitsubishi Heavy aims to raise overall sales to 5 trillion yen in fiscal 2017, up 1 trillion yen from fiscal 2014, under its latest three-year business plan.

     The deal will mark the company's first foray into operating nuclear plants, a step beyond its traditional role of just selling machinery and equipment. Mitsubishi Heavy aims to maintain its nuclear-related technical capabilities by landing business beyond the stagnant Japanese market.


Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more