Rising global interest rates are hurting Turkish corporates in more than one way. Recently, Bloomberg News reported that one of Turkey’s leading billionaires Mr. Ferit Sahenk is looking to unload assets “to reduce debt”. PA Intelligence had reported the woes of regional cookie and confectionary giant Yildiz Holding (Ulker brand) which is in negotiations with banks to reschedule loans as much as $7 bn. Even Turkey’s pride and glory Akkuyu nuclear power plant, commissioned to Russia Rosatom could face delays because no local partners could be identified to take an equity stake.
Rosatom hard put to locate local partners
Turkey’s first nuclear power plant is likely to miss its 2023 target start-up date as Russian builder Rosatom struggles to find local partners, two people familiar with the matter said.
The $20 billion project is part of President Tayyip Erdogan’s “2023 vision” marking 100 years since the founding of modern Turkey.
Rosatom is looking at four Turkish companies as possible partners, but little progress has been made so far, said one of the sources, both of whom declined to be identified because the information is not yet public.
Rosatom said last month it was in talks with state-owned power producer EUAS after a deal with a consortium of three firms collapsed.
“Concrete progress has not been made in the talks so far, and this includes EUAS from the government side,” one source said, adding that Rosatom was keen to have a government entity such as EUAS as a shareholder.
Rosatom is looking for Turkish partners to take a 49 percent stake in the planned Akkuyu nuclear plant in southern Turkey.
But the government is wary of EUAS taking on the 49 percent stake by itself.
“A 49 percent stake still means $10 billion of funding even if it’s spread over years,” the source said. “It is a very big project, there are many details and issues that need to be worked on. We can’t expect this to be resolved soon.”
The project is to be financed by Rosatom and its partners and will involve loans from export-import agencies and banks, Anastasia Polovinkina, director of Rosatom affiliate Rusatom Energy International told a conference in June 2017.
Financing question marks
Turkish companies have been put off by the size of the financing required as well as by concerns they will not receive a sufficient share of the lucrative construction side of the deal, two industry sources said.
The firms are also worried that the guaranteed electricity price could eventually be lowered, reducing future revenue, they said.
Rosatom did not respond to a request for comment. Officials for EUAS and the government declined to comment.
Rosatom last year said it would sell 49 percent of Akkuyu Nukleer AS, the company which will build and operate the plant, to a consortium made up of Kolin Insaat, Kalyon Insaat and Cengiz Holding – Turkish firms that have been awarded major infrastructure projects under Erdogan.
However, the final agreement was never signed and Rosatom said Kolin and Kalyon had decided to pull out of the project.
Cengiz remains as a contractor and Rosatom said last month that the two were in talks regarding other “partnership options”.
Rosatom has said it expects to find new investors for the project this year, adding that could be a single investor for the entire 49 percent or several firms taking smaller stakes.
Source: US News