Akkuyu Nuclear Power Plant –

Progress To-date and the Way

Forward

6th Annual Global Infrastructure

Leadership Forum

New York City

February 2013

AKKUYU NGS AŞ

Akkuyu NPP Power Generation JSC

ROSATOM Rosatom state nuclear corporation

Akkuyu Nuclear Power Plant is the First Rosatom BOO Construction Project Outside Russia

Akkuyu Project Features

Akkuyu site, Turkey

• Energy sector (generation)

• First Nuclear Power Plant in Turkey

• First Rosatom ВОО (build-own-operate) project. Under the

IGA, Rosatom is responsible for engineering, construction,

operation and maintenance of the plant.

• Legal basis: Intergovernmental Agreement, May 12, 2010

• Project design: AES-2006 (VVER-1200)

• Number of units: 4 x 1200 MW

• Total capacity: 4,800 MW

• Construction period: 2011-2023

• Total cost ~ $ 20 bln

• Power Purchase Agreement for 15 years, fixed price terms

• Support of the Russian and Turkish Governments

• Maximization of Turkish personnel involvement in

construction and operation of the plant.

• Job creation potential – up to 10 000 for the construction

only

2

AKKUYU NGS AŞ

3

Why BOO? Pros and Cons

• Potential profit from power sales –

high dynamics of GDP and power

consumption in Turkey

• Forecast for growth of power

consumption and capacity deficit

• Electricity market liberalization and

electricity price growth in Turkey

• Turkish power market investment

attractiveness

• Availability of grid infrastructure and

possibility to export power to

Europe and the Middle East

• Government support of the project

in Turkey and Russia

AKKUYU NGS AŞ

Pros Cons Why BOO?

• Profit from electricity

sales after pay back

period

• Fixed price РРА

(weighted average

12.35 cent/kwh) and

fixed quantity - (70% of

Units 1 and 2 output

and 30% of Units 3 and

4 output – revenue

guarantee for the

investor

• Need to forecast long-term

electricity price – high

probability of error and change

in long-term electricity price.

• The Project Company bears all

the risks

• Possibility of unpredictable

growth of the construction

costs, economic and political

force majeure

• Difficulty to find an investor

(«long» money)

Project Financial Indicators and Equity Structure

Akkuyu NPP JSC

Site license holder, owner of the NPP and the power generated

100%

• Construction time: 11 years total

5 years (from first concrete to 1 Unit

commissioning)

• Operational lifetime: 60 years

• Generation output : 35.2 bln.

kWh/year (for four units)

• IRR > 8%

• Targeted D/E Ratio – 70/30

• CAPEX: estimated at $20 bln

• Payback period from the date of

commencement into commercial

operation : 16 years

• Interest coverage ratio: 5,0

Akkuyu Equity Structure

AKKUYU NGS AŞ

The Russian side

provides Initial

funding. Later, up

to 49% of shares

may be transferred

to investors

4

Atomstroyexp

ort CJSC

Interrao

OJSC

Rosenergoatom

OJSC

Atomenergore

mont OJSC Atomtekhen

ergo OJSC

0.1% 0.1% 66.3% 3.5% 30%

49 % - Investors

Akkuyu CAPEX structure, % Akkuyu CAPEX

-1 000

0

1 000

2 000

3 000

4 000

5 000

6 000

2010 2012 2014 2016 2018 2020 2022 2024

Mln

, $

5

Turkey is One of the Most Dynamic World Economies with

Strong Growth Potential

Sources: The World Bank, World Economic Outlook - IMF, October 2012

AKKUYU NGS AŞ

233

303

392

483 531

647

730

615

734 789

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

• Turkey is rated the 16th world economy

based on GDP ($789 B in 2011)

• Turkish government reforms targeting

further integration with EU standards will

result in the investment climate

improvement

10,9

7,9

6,3 5,9

4,2 4,2 3,8

2,1 1,4

0,9 0,9 0,6 0,2

8,5

6,6 6,6

4,1 4,1 3,8 3,6 3,4

3 2,3 2,2

1,1 0,9 0,8

Top world economies GDP dynamics

(annual average growth rate), 2002-2011

Forecast of top world economies GDP dynamics

(annual average growth rate), 2013-2017

Turkey GDP dynamics ($B)

0

50

100

150

200

250

300

generationconsumption and losses

6

Electricity Consumption and Generation Growth Rates in Turkey

are Comparable to the World’s Emerging Economies

Electricity generation dynamics,

2000-2010 (annual average rate)

Power Generation and consumption dynamics in Turkey

(bln kWh)

AKKUYU NGS AŞ

13,1

6,9 6,2 6,1 6,1

4,5 4,3 3,6

2,7 1,9

1

13

7 7 6 6

4 4 3

2 1 1

Electricity consumption dynamics,

2000-2010 (annual average rate)

Unlike other countries, Turkey did not experience electricity

consumption decline as an outcome of the world economic

crisis

Electricity consumption per capita lags behind the top world

economies and has opportunity for rapid growth

Per capita consumption (kWh per capita), 2010

Sources: EIA DOE US, The World Bank

12563

9463

8002 7865

6070 5796 5291 5072

2716 2342 2338

Source: Power industry

development strategy, 2009

188

500

2010 2023

7

Government plans for 2023:

Increase export to 500 $B.

Reach average per capita revenue of $25,000

Reach GPD growth up to $ 2 trln

Join the top 10 world economic states.

• This will lead to the deficit of generation capacities.

• Besides, Turkey attempts to reduce energy dependency on imported fuel and

decrease gas share in its power generation mix.

• Turkey’s commitment to CO2 reduction also requires reduction of coal and gas

generation, and increases its cost.

Sources: Turkish Electricity Transmission Corporation,

2011, EPDK. Mercados

In order to Join Top‐10 of the World Most Developed Countries

by 2023, Turkey Needs Electricity Consumption to Grow 8 %

Annually AKKUYU NGS AŞ

Decrease of the gas generation share is one of the objectives of the 2009 Power

Strategy. Turkey plans to increase renewables’ share to at least 30% by 2023

(including hydro) and to build up to 3 nuclear power plants (up to 5% of total power

generation)

2011

Planned GDP growth, $ B

Electricity consumption forecast in Turkey

(B kWh)

Generation structure, 2011 Generation target structure

for 2020

789

2000

ВВП в 2011 ВВП в 2023 GDP in 2011 GDP in 2023

Major Milestones of the Project

2 stage 3 stage 4 stage

1 блок

2 unit 2 блок

3 блок

4 блок

Preparation Construction Operation and

maintenance Decommissioning

1 stage

Commissioning

Akkuyu JSC

registration NPP construction license

Start site survey

Electricity

generation license

2021

2022

2023

First concrete

1 unit

2 unit

3 unit

4 unit

8

AKKUYU NGS AŞ

1955

1956

1965

1972

1974-1975

1976

1981

1977-2009

May 2010

July 2010

December

2010

An Agreement on peaceful use of the atom signed with the

U.S.

Atomic Energy Committee begins its work

Studies on the construction of the NPP begin

The Department of Atomic Energy created

A study on the first NPP site location conducted

A license for the Akkuyu site on the Mediterranean coast

obtained

Cooperation Agreement with the IAEA signed

Tender for building 4 NPP units in Turkey held

Signing the Intergovernmental Agreement between the RF

and the TR

The Law ratifying the IGA enters into force in Turkey

“Akkuyu” NPP Power Generation JSC (AKKUYU NGS

ELEKTRIK URETIM ANONIM SIRKETI) is registered in

Turkey

March 2011 Preliminary engineering survey; start of the front end

engineering design, licensing and Environmental Impact

Assessment process, generation license application

March 2012 Environmental Impact Assessment Hearings (EIA)

9

Akkuyu Chronology AKKUYU NGS AŞ

10

Project Cooperation Between Russia and Turkey Covers a

Wide Range of NPP Related Construction and Operation

Issues

NPP engineering, design field supervision

Russian responsibilities Mutual responsibilities Turkish responsibilities

Spent fuel treatment

Personnel training

Fuel supply

Nuclear island and other

special equipment and materials

Construction and assembly work

Issuing project documentation

Construction management/

supervision

Wholesale of electricity

Operation, maintenance and upgrade

Startup and Commissioning

Decommissioning and decontamination

AKKUYU NGS AŞ

Operation and upgrades

Emergency planning

R&D

Infrastructure development,

including power grids

Physical protection

Public outreach

Nuclear energy regulation

and legislation

development

Site allocation

Site infrastructure

Participation in O&M

Grid connection

Construction and assembly

work

Provision of materials and

equipment

Electricity wholesale strategy

development and

implementation; power export-

import activities

11

Rosenergoatom InterRAO

Project engineering design General contractor

Developing preliminary, basic and

detailed design documentation

Technical acceptance of equipment

and services at all stages of the project

commissioning

Engineering surveys

Construction and assembly work

Equipment and materials supply

JSC was incorporated in Turkey. Plays the role of license holder, NPP owner, and GR

coordinator in Turkey

«Akkuyu» NPP

Owner of the NPP and electricity generated

Akkuyu NPP JSC

«Akkuyu NGS Elektrik Üretim Anonim Şirketi»

Atomstroyexport

Kurchatov institute Scientific advisor

Purchasing electricity

from the NPP and

trading at the Turkish

market

Atomenergoproject

(AEP)

Principal designer

Rosatom State

Corporation

Project Sponsor

Responsible for the

project implementation

and realization of

objectives

ТЕТAS (Turkish

Electricity Trading

and Contracting

Company)

TVEL JSC fuel supply

VNIIAES JSC System integrator

Automatic process control

system principal designer

Gidropress Design

Bureau Nuclear island principal

designer

Electricity sale

AKKUYU NGS AŞ

Project Organizational structure

How AES-2006 Safety is Ensured?

AKKUYU NGS AŞ

• Defense-in-depth

• Self-defense of the reactor

• Safety barriers

• Multiple duplication of the

safety channels

• Active and passive safety

systems

• Safety concept, including

not only accidents

prevention but beyond

design basis accidents

consequences prevention,

ensuring localization of

the radioactive instances

within the containment

vessel

• Safety culture for all the

lifecycle stages: from

selecting the site up to

decommissioning

12

13

NPP Design and Construction

AKKUYU NGS AŞ

• The Project Company has received the NPP

construction site with effective site license and

renewed licensing conditions.

• Public Hearings have been held.

• Independent engineering surveys have been

completed in order to get an independent

assessment of the Akkuyu NPP site seismicity.

• The Power Generation License application has

been filed.

• The EIA Application Dossier has been prepared

and filed. The EIA Report is being prepared.

• The engineering design work is underway

• The Information Centers have been opened in

Büyükeceli and Mersin

• Launch of the site preparation works

• Completion of the EIA Report development and

obtaining the EIA Positive Conclusion

• Submission of the NPP Construction License

• Completion of the engineering design

development

• Start of site infrastructure construction

• Building of a construction and assembly base

• Obtain the Power Generation License

• Negotiations and signing of a Power Purchase

Agreement

2011-2012 Results Tasks for 2013

14

Infrastructure development of the nearby cities will lead

to construction of the new roads, hospitals, schools,

sport facilities and will end up in establishing of about 15

000 new positions for infrastructure facilities, including

medicine, trade, transport.

The Turkish Party will partially do the construction and

assembly work, as well as supplies of non-specialized

equipment and NPP operation.

It is planned that 95% of the construction will be

conducted by the Turkish companies; 40% of the

assembly work will be conducted by the Turkish

companies; 20% of the equipment and materials will be

provided by the Turkish companies.

In addition to the construction experts (in the “peak

years” more than 10 000 people will work on the

construction site only), and more than 2000 operational

personnel will work at the NPP and around 1200 will be

involved during the planned outages.

Jobs creation and infrastructure development

AKKUYU NGS AŞ

Social Effect From NPP Construction

15

Investment highlights AKKUYU NGS AŞ

Attractive geographical

location

Strong political support of the

Project by the Governments of

Turkey and the RF

Substantial and growing

demand for energy in Turkey

Interconnections with

the EU and neighboring states

(Middle East, Caucasus)

Proven, safe, reliable and

environment –friendly reactor

technology

Attractive value creation

potential

Diversified sources of funding

Proven nuclear expertise and

established legal framework

• Turkey is at the cross-roads of Europe, Russia and the Middle East, the bridge between the oil and

gas hungry Europe and oil and gas rich Russia and the Middle East

• Turkey is one of the fastest growing economies with strong growth potential

• The project is supported by the governments of Turkey and the RF

• It is based on the Intergovernmental Agreement (IGA) between the Turkey and the RF

• Prime –minister of Turkey is one of the key proponents of the project

• Strong political priority for the project in Russia.

• Annual electricity demand in Turkey – 6% annual growth in 2000-2010, 8% annual growth is

expected until 2023

• Electricity shortage is expected already in 2014, rolling blackouts currently occur in Turkey.

• Turkey joined ENTSO-E European synchronized zone

• Opportunity to export electricity to neighboring states in Europe and the Middle East

• Generation 3+ NPP meeting advanced safety requirements. Passive and active safety systems

• Experience of the reference NPP operation in Russia, India, China

• NPP design complies with the Russian norms, is in the process of obtaining all the required

licenses and permissions in Turkey. The reactor refers to the evolutionary family VVER that meets

all standards of the IAEA, the certificate EUR, will pass various international licensing procedures

(Czech Republic, Great Britain), etc.

• Payback period from the date of commencement into commercial operation : 16 years, IRR > 8%

• 15 years fixed term PPA (power purchase agreement) with fixed price and assured return of

investments

• Favorable investment climate in Turkey. Electricity market liberalization and growing electricity prices

• Partners are invited to take part in Akkuyu NPP construction as equity investors (up to 49%),

equipment suppliers (with credit agencies support), off-takers and providers of debt financing

• Russia is one of the world leaders in the nuclear industry: 10 NPPs in operation/ 24 units in

Russia with total capacity of 18.6 GW/ 19 more units are in order backlog overseas. Well-

developed legal framework and reference NPP experience

Project information

AKKUYU NGS AŞ

Webiste in Turkish, Russian and English

www.akkunpp.com

Brochure about the project in

Russian, Turkish and English

Public information Center

16

AKKUYU NGS AŞ

Thank you for attention!

www.akkunpp.com

AKKUYU NGS AŞ