A Russian state-owned company is transferring large amounts of US dollars to a subsidiary building a 20 billion USD nuclear power plant in Turkey, allaying fears that the project could be delayed by sanctions imposed over the Ukraine war, Bloomberg reports.
According to several Turkish officials close to this case, last week Rosatom Corp. sent about five billion USD to a subsidiary in Turkey called Akkuyu Nuclear JSC, and two more similar transfers are scheduled to take place this week and the next. The funding will cover all procurement needs for the Akkuyu power plant project over the next two years, added the Turkish officials, who spoke on condition of anonymity.
Rosatom responded, in a press release, that although the plant site in Turkey is the largest of its kind in the world, “current transfers are significantly lower” than the figures advanced by Turkish officials. The Russian group did not want to provide further details, stressing that the financial arrangements for this project are confidential.
The Akkuyu nuclear plant on the Mediterranean coast is vital for Turkey to meet its growing energy needs, with estimates showing it could meet 10% of domestic electricity demand after all four reactors are operational. The project received funding from the largest bank in Russia, Sberbank, which is targeted by the sanctions imposed by the US and the European Union, but also from Sovcombank, another sanctioned Russian bank. Instead, the Rosatom group, the owner of the future plant in Turkey, and its subsidiary in Turkey were not sanctioned.
Works on the first reactor, Akkuyu 1, began in 2018 and two years later works began on Akkuyu 2. Works are scheduled to be completed by 2026.
One of the Turkish officials cited by Bloomberg said the fund transfers were a gesture of goodwill from Russian President Vladimir Putin for the mediating role played by Turkish President Recep Tayyip Erdogan in the deal that would allow grain exports from Ukraine to be unblocked.. The two leaders are scheduled to meet in Sochi on August 5.
Russia remains an important supplier of energy to Turkey, as last year it provided a quarter of oil imports and about 45% of Turkey’s natural gas purchases, which allows Moscow to register a large surplus in bilateral exchanges. Now the two countries are looking at a mechanism that would allow Turkey to pay in pounds for at least part of its energy purchases from Russia, a Turkish Central Bank official said on Thursday.