Impact of the dollar change on Akkuyu

Impact of the dollar change on Akkuyu

Turkish government, which was trying to steadily progress for hosting three nuclear power plant projects in the near and middle terms has now the obstacle of dollar exchange rate.

According to the statement made by Akkuyu nuclear company, The Russian Rosatom, that will construct Akkuyu Nuclear Power Plant, tends to sell 49 % of his Akkuyu shares, because of his financial hardship. The company which is interested in the sale of shares is the most popular actor of Turkey’s mega-projects, the Cengiz-Kolin-Kalyon consortium.

In addition, Turkey began to feel the weight of a handicap stemming from the content of the agreement. According to the agreement, Turkey offered an electricity purchase guarantee of 12,35 dollars per kilowatt-hour for 15 years with Akkuyu, which will be constructed by build-operate-transfer method. According to the agreement, the Russian company will run the plant for 60 years and then transfer it to Turkey. The price was quite expensive even in the period when the agreement was signed. Because today. The electricity in Turkey has a cost of 4 or 5 dollars per kilowatt-hour.

Thus, the factor pushing now Turkey is the rapid increase in value of US dollar against Turkish lira. The dollar is currently moving around at 3.45-3.46 levels, much higher than the 1.50-1.60 levels at the time of the signing of the deal.

It is not yet clear whether these most authoritative names, which emphasize the importance of having a nuclear power plant in Turkey, such as President Erdogan and Energy Minister Albayrak, will put the agreement into practice against the increase of the dollar or not. But which is certain is that Akkuyu Nuclear Power Plant conditions have reached such an unfavorable position Turkey for the first time.

About Author

Arnaud Lefevre

Arnaud Lefevre is the Chief Executive Officer of Dynatom International. Arnaud is in charge of the international development of the business portfolio.