ISTANBUL -- The Turkish government plans to place four nuclear reactors into service by 2028 under a commercial agreement with Japanese companies concluded in 2013, details of which were recently revealed.
Japan's Mitsubishi Heavy Industries and trading house Itochu as well as French electric utility company GDF Suez are expected to hold a combined interest of 51% in a company that will be established to build and operate a nuclear plant in the Black Sea city of Sinop.
Known as a host government agreement, the pact needs approval by Turkey's parliament, after which the Turkish government plans to establish the operating company. Orders placed with Japanese companies under the 2013 deal will become official once the operating company and Turkey's energy minister sign off on the agreement.
Turkey's parliament, the Grand National Assembly, is in session until early April with a short extension possible. The government wants quick approval by the parliament. If the deal is not approved in this session, it will have to wait until the next session convenes in October.
The Sinop nuclear plant project is slated to use the ATMEA1 reactor developed by Mitsubishi Heavy and France's Areva. The first reactor would begin operation in 2023, followed by the others in 2024, 2027 and 2028.
The project is expected to cost about 2 trillion yen ($16.4 billion).
Plans are being made to procure the 1 trillion yen needed for the first two reactors. Financing will be 70% loans and 30% equity. The Turkish side will take a 49% stake in the plant operator, with state-owned power company EUAS to hold most of these shares. The Japan Bank for International Cooperation and Nippon Export and Investment Insurance will assist in fund procurement.
The operating company will repay the investments with revenue from electricity sales. The 20-year agreement calls for average prices of 10.80 cents to 10.83 cents per kilowatt-hour.