UPDATE 1-Turkey, Japan sign $22 bln nuclear power plant deal

Fri May 3, 2013 12:10pm EDT

(Adds details of the deal, quotes from Turkish prime minister)

By Orhan Coskun

ANKARA May 3 (Reuters) - Japan's Mitsubishi Heavy Industries Ltd and Itochu Corporation, with France's GDF Suez, will build Turkey's second nuclear power plant at an estimated cost of $22 billion under an agreement signed on Friday.

Turkish Prime Minister Tayyip Erdogan and his Japanese counterpart Shinzo Abe signed the deal in Ankara. The firms will construct a 4,800 megawatt (MW) nuclear power plant in the Black Sea coastal city of Sinop.

The consortium will use French nuclear group Areva's Atmea type reactors, consortium sources said.

The bulk of the project will be financed by Nippon Export and Investment Insurance (NEXI), Japan's export credit agency, and French credit insurer Coface. The firms will also carry out a site analysis for where Turkey's third planned nuclear power plant could be built.

"This deal is also the first step for Turkey's third nuclear power plant, which will be a Turkish engineering effort," Erdogan said at the signing ceremony.

Fast-growing Turkey imports almost 97 percent of its energy needs. Erdogan has been an advocate of its ambitious nuclear programme, which aims to help reduce dependence on hydrocarbons by providing 10 percent of its electricity needs by 2023.

Turkey is among the countries to which the Vienna-based U.N. nuclear agency has referred in its predictions of steady growth in nuclear power despite the Fukushima disaster in Japan two years ago.

Reactor meltdowns at the Fukushima nuclear plant triggered by an earthquake and tsunami in March 2011 shook the industry and raised questions over whether atomic energy was safe.

The Turkish deal is a major fillip for Abe, who has been advocating the safety standards of Japan's nuclear industry following the disaster.

Sources said the first Turkish reactor is slated to come online by 2023, with a fourth and final one operational in 2028, but Erdogan said he hoped it could be completed earlier.

Turkey will hold a maximum 45 percent stake in the project company that is due to be established prior to construction. The stakes held by GDF Suez and Mitsubishi are yet to be finalised.

Russia's Rosatom will build Turkey's first nuclear power station and is due to start construction in mid-2015. It expects the facility to start producing electricity in 2019, its deputy general manager told Reuters in February.

That $20 billion plant at Mersin Akkuyu on the Mediterranean coast will also have four power units with installed capacity of 4,800 MW.

(Additional reporting by Fredrik Dahl in Vienna; Writing by Humeyra Pamuk; Editing by Sophie Walker)