Seoul eyes UAE support in Turkish nuclear deal

ANKARA - Hürriyet Daily News

Turkey is planning to build at least three nuclear plant on its soil.

South Korea has quite an advantage in its bid to win the nearly $20 billion deal for Turkey’s second nuclear plant. It has a good design and has negotiated in the past for the deal, but there is one major disadvantage for its chances to grab the deal: it wants guarantees from the Turkish treasury that have been strongly rejected by Turkey.

Therefore, in its competition with Japan, China and Canada, South Korea is now resorting to an unusual method to bolster its chances, by asking for the investment power of the United Arab Emirates (UAE) to seek a joint deal.

Two years ago, South Korea’s Kepco inked a $20 billion deal to manufacture a huge nuclear deal with the UAE, which is seeking a “clean” energy alternative for the coming decades. For this reason, last month Energy Minister Taner Yıldız said the Gulf country could enter the deal if South Korea was involved in the bid for Turkey’s planned second nuclear area of Sinop in the north of the country.
How the UAE could be involved was not explained at the time, but it has now become clear that it would be in the form of financing. South Korea wants to make use of the UAE to get rid of the treasury guarantee condition, which the Turkish government definitely does not want to give.

Mutual interests

This would be a “win-win-win” condition, according to South Korean officials: Turkey would not have to give treasury guarantees, therefore avoiding a price rise of up to $1 billion in commercial interest rates, South Korea would build the nuclear plant, and the UAE would get a good return on its investment through the sale of safe nuclear energy to Turkey. UAE officials are also quite close to this line of thinking.

When it comes to South Korea’s rivals in the contest, Japan lost its leading edge following the Fukushima disaster by announcing that it would completely quit the dangerous nuclear option due to its earthquake-prone nature. China has lots of financing options that would be deemed “good” by Turkey, but the proposal it provides is definitely more backward than that of South Korea, and the Canadians cannot build for the high capacity of production required by Turkey. Russia, in securing the southern Turkey nuclear power deal, did not ask for a treasury loan.

The close friendship and alliance between Turkey and South Korea dates back to the middle of the last century. Turkey joined the Korean War in 1950 and it suffered the highest casualty rate in the conflict. Ankara was therefore admitted to NATO membership in the early 1950s for its staunch fighting on the part of the United Nations against North Korea and China. Turkey and South Korea thus have sound defense industry relation.