Turkey: Turkey Announces Its First Nuclear Generation Plant Tender

Last Updated: 1 April 2008
Article by Guner Law Office

In response to predicted power supply shortfalls and rising oil prices Turkey has decided on the nuclear power option. Turkey wants to build three new nuclear generation plants with a total generation capacity of 5,000MW by 2015, the first of which will be developed at Mersin on Turkey's Mediterranean coast. The Mersin site was chosen as it already has the required license. Further down the line, a second nuclear generation plant will be located at Sinop on the Black Sea.

On 8 November 2007 the Turkish Parliament enacted the "Law on the Establishment and Operation of Nuclear Power Facilities and the Sale of Energy" (the Nuclear Law) which entered into force on 21 November. The Nuclear Law states that the procedure for the establishment of nuclear generation plants in Turkey will be determined by the Ministry of Energy and Natural Resources. The first tender for a nuclear plant will be organised by TETAS, the state-owned power wholesale company. The technical specifications and qualifications that companies must meet in order to take part in this tender were published by the Turkish Atomic Energy Institution (TAEK) on 21 December 2007.

The "Regulation on the Principles, Procedures and Incentives that relate to the Tenders and Contracts to be executed under the Law on the Establishment and Operation of Nuclear Power Facilities and the Sale of Energy" (the Nuclear Regulation) was issued by the Ministry of Energy and Natural Resources and entered into force on 19 March 2008. The Nuclear Regulation governs the tender process and selection of companies that will build and operate nuclear generation plants. The Nuclear Regulation more specifically covers the following:

  • the qualifications required of companies wishing to participate in tenders;
  • the length of any tender process;
  • criteria for selecting a company on the basis of the tenders;
  • the assignment of land on which nuclear generation plants will be established;
  • license fees;
  • infrastructure incentives;
  • the supply of fuel to nuclear generation plants;
  • the generation capacity of any nuclear generation plants; and
  • the amount, term and unit price of energy to be purchased from nuclear generation plants.

On 24 March 2008, TETAS announced the tender for the first nuclear plant in the Turkish official gazette. According to the tender announcement, the plant will be built in Akkuyu, Mersin and will have an estimated power output of 4000 MW, plus or minus 25%. The tender is open to local and foreign companies, partnerships and consortiums. Bids shall be submitted by 24 September 2008 and shall remain valid for 360 days. Bidders are required to post a bid bond of 35,000,000 New Turkish Liras. The tender procedure is subject to the Nuclear Law and the Nuclear Regulation. The State Procurement Law will not apply.

The tender documents have been prepared by TETAS, which will conduct the entire process. The Turkish version of the tender documents, including the tender specifications and the proposed power purchase agreement to be signed between TETAS and the selected bidder, are available from TETAS' Internet website at www.tetas.gov.tr. An English version for information purposes should be released within short. Parties who are interested to participate in the tender must purchase the tender documents for 10,000 New Turkish Liras. Over a dozen major Turkish and foreign companies are already rumoured to have an interest in the tender.

The Turkish Energy Market Regulatory Authority (EMRA) will issue a licence to the company that wins the tender and TETAS will sign an "offtake" contract (apparently with a maximum term of 15 years, which seems unrealistically short) to sell all the electricity produced by the nuclear generation plant to TETAS. Potential bidders must be aware that the company awarded the tender will also be responsible for decommissioning the plant and cleaning up the site at the end of its use.

Guner Law Office was established in 1996 and has since grown into one of the major corporate, M&A, banking, litigation, energy and TMT practices in Turkey. Guner Law Office is headed by Ece Guner and works with international law firm Denton Wilde Sapte.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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