Toshiba's Nuclear Deal in Turkey

Ref: http://www.ft.com/cms/s/0/f4161b80-3222-11e0-a820-00144feabdc0.html?ftcamp=rss

Toshiba upbeat on Turkey nuclear deal
By Jonathan Soble in Tokyo and Delphine Strauss in Ankara


Published: February 6 2011 19:16
Last updated: February 6 2011 19:16


Toshiba, the Japanese electronics and engineering group, says it is confident that it will seal a deal to build a nuclear power plant on Turkey’s Black Sea coast, after talks between the Turkish government and South Korean reactor builders broke down last year.

Norio Sasaki, Toshiba president, told the FT a deal now hinged mainly on the provision of long-term risk insurance by the Japanese government. Tokyo has been working to strengthen financial support for its private sector nuclear groups to help them compete with state-backed manufacturers in Korea and Russia.

The Turkish project could help Toshiba hit its goal of selling Y1,000bn ($12.2bn) of nuclear technology annually ahead of its initial target of 2015. “Now we’re talking about 2014, and it could even be a little earlier,” Mr Sasaki said. Turkish authorities “have said clearly they want an ABWR” – the Advanced Boiling Water Reactor type, built by Toshiba. “If [insurance] can be settled, then electric utilities will come on board and I think it will go well.”

Toshiba bought the US nuclear plant builder Westinghouse in 2006 and has been investing in its own pre-existing nuclear business, which has built most of its reactors in Japan. It is looking to increase exports, including to middle-income countries such as Turkey that have little or no experience in nuclear power.

“They are looking for someone to build the plants, run them, and sell the electricity to recoup the initial costs,” Mr Sasaki said. “In a 15 or 20-year project like that, there are various risks that a private company can’t take on its own, like the risk of an earthquake or political change.”
Turkey has struggled for years to launch a nuclear power industry that would reduce its reliance on oil and gas imports. In a 2008 tender, it received only one bid – from Russia’s Atomstroyexport – because most companies felt its conditions did not give them enough certainty.

Since then, Turkey has reached a deal with Moscow to build a first nuclear plant – part of a web of energy agreements on gas supply and pipelines. It entered exclusive talks with Japan to build the second plant, in the Black Sea province of Sinop, after negotiations with South Korea’s Kepco broke down in November.

Turkey’s energy ministry said technical negotiations with Japan continued, with a deadline of the end of March before talks would be reopened to other bidders. But a ministry spokesman said there was no question of Ankara offering state purchase guarantees that had been refused to South Korea – one of the chief reasons for the failure of negotiations.

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