GOT REQUESTS USTDA ASSISTANCE ON NEW NUCLEAR TENDER

C O N F I D E N T I A L ANKARA 001729 SENSITIVE SIPDIS DEPARTMENT FOR S/EEE RICHARD MORNINGSTAR DEPARTMENT PLEASE PASS TO USTDA DOE FOR OFFICE OF RUSSIAN AND EURASIAN AFFAIRS: LANA EKIMOFF E.O. 12958: DECL: 12/04/2019 TAGS: ENRG PGOV TU SUBJECT: GOT REQUESTS USTDA ASSISTANCE ON NEW NUCLEAR TENDER REF: ANKARA 1698 Classified By: DCM Doug Silliman for reasons 1.4 (b,d). ¶1. (SBU) At the December 3 meeting of the U.S.-Turkey Energy Working Group (EWG) meeting, Hakki Akil, MFA deputy undersecretary for economic affairs and head of the Turkish EWG delegation, informed us that Energy Minister Yildiz is ready to accept USTDA's earlier offer of technical assistance on designing a new nuclear power plant tender process. Akil said they very much want western companies to bid on the projects and believe USTDA assistance can help them achieve that goal. (Note: A Russian-led consortium was the sole bidder in the recently canceled tender issued in September 2008.) The GoT plans to move forward on two nuclear power plants in the immediate future, but they have not yet decided on the structure of the projects, whether public-private partnership, build-and-operate, a tender process, or formation of a state-owned company. The GoT is now revising the laws governing the nuclear tender to allow for a change in structure and adjust the provisions that caused difficulties with the September 2008 tender (reftel). Akil suggested it could be helpful to have USTDA assistance in revising the laws. The U.S. side thanked Turkey for its receptivity to the USTDA proposal, but noted that we would have to check with USTDA to see if the offer remained on the table. REASONS TO SUPPORT TURKISH NUCLEAR POWER CAPACITY -------------- ¶2. (C) Turkey has been working to build a nuclear power plant since the 1960s, including several failed attempts at tendering bids. The GoT currently aims to install three to five plants for a total capacity of 5000 MW over the next five to seven years. Nuclear energy thus plays an important role in Turkey's energy strategy to improve the country's energy security and independence and lower its carbon footprint. USTDA assistance could help Turkey develop a new tender process based on international best practices that could both encourage bids from a variety of companies (unlike Turkey's last bid) and develop a successful "Turkish model" for other countries to follow. BACKGROUND ON USTDA PROPOSAL -------------- ¶3. (C) In April 2009, a USTDA delegation led by Acting Director Leocadia Zak visited Ankara and discussed with the Ministry of Energy (MENR) a range of possible projects to support the Turkish energy sector. The GoT officials had expressed interest in learning from U.S. companies and consultants how they could structure future nuclear tenders to attract multiple bidders. USTDA proposed a seminar on how to increase competition, followed by one-on-one meetings between U.S. companies and Turkish officials and organizations. The GoT, however, declined to include it in the package of projects chosen for implementation in April. COMMENT -------------- ¶4. (C) We understand that USTDA now has concerns with providing Turkey technical assistance on a new nuclear tender. Due to the importance of nuclear power in Turkey's energy strategy and our desire to ensure that future Turkish nuclear tenders meet international best practices, we would appreciate USTDA's serious consideration of a technical assistance project to assist Turkey's nuclear tenders in particular, or large energy project tenders in general. JEFFREY "Visit Ankara's Classified Web Site at http://www.intelink.s gov.gov/wiki/Portal:Turkey"