A Japanese-led public-private consortium is set to abandon a Turkish nuclear power project that had been touted as a model for Tokyo's export of infrastructure, according to a report by the Japanese media outlet Nikkei Asia Review.
The reason for Mitsubishi Heavy Industries' decision to scrap the project was reported to be the rising costs of the delayed construction, which have increased to 5 trillion yen ($44 billion). The original cost of the project was estimated at $22 billion. The increase in cost was mainly due to higher safety requirements following the 2011 meltdown at Japan's Fukushima Daiichi nuclear power plant and a weaker Turkish lira, Nikkei said.
The main builder Mitsubishi Heavy Industries' decision to cancel the project is still under negotiations among parties and it was seen as a blow to the Japanese nuclear industry, looking for avenues of growth in overseas markets because it is unlikely that a new nuclear power plant will be built in the post-Fukushima country. In April, another Japanese member of the consortium, Itochu, was reported to be pulling out of the Sinop nuclear power plant project, citing a surge in safety-related costs, casting uncertainty over the plant's future as well as the Japanese government's infrastructure export ambitions.
The Japanese and Turkish governments agreed in 2013 on the project to be built with a Japanese-French consortium in the Black Sea province of Sinop. The bulk of the project would be financed by Nippon Export and Investment Insurance (NEXI), Japan's export credit agency, and French credit insurer Coface.
The Sinop Nuclear Power Plant is designed to have a 4,480-megawatt capacity of electricity generation with four reactors, each with a 1,120-megawatt capacity.