Dmitri Medvedev on Wednesday sealed a $20bn deal for Russia to build Turkey’s first nuclear power plant, furthering Moscow’s ambition of carving out a bigger role in the renascent international market for nuclear energy.
Energy cooperation is the core of a rapidly developing partnership between Moscow and Ankara, former cold war rivals who say bilateral trade could reach $100bn in the next five years – half the value of Russia’s trade now with the entire European Union.
“Turkey and Russia are strategic partners, not just in words but in reality,” the Russian president told reporters on Wednesday during a trip to Ankara, where he also discussed Moscow’s involvement in an oil pipeline that will cut tanker traffic through the Bosphorus straits and struck a deal to scrap visa requirements for short visits.
Russia, which already sells Turkey 70 per cent of its imported energy, has overcome Turkish criticism of cost and over-dependence on its neighbour to win the nuclear deal, after making the only bid in a 2008 tender that was later cancelled.
Sergei Kirienko, head of the country’s nuclear agency, said the deal was a breakthrough because Russia would keep a controlling stake in the project. It will own 100 per cent at first and may later sell 49 per cent to another investor.
“We have been striving for this for a long time … it is much more interesting for us to be co-investors in such projects,” he said.
This arrangement might also allow Turkey’s government to take a stake in the project at a later stage. It had considered doing so upfront in order to give the plant’s operator greater guarantees and so bring down the cost of the project.
Mr Kirienko said state-owned Rosatom would finance construction of the plant on Turkey’s Black Sea coast, with four reactors and a generating capacity of 4,800MW.
Tetas, Turkey’s state electricity company, has pledged to buy up to 70 per cent of power when the plant begins generating in 7 years time, with some sold on the open market.
The deal illustrates Russia’s appetite to cement its position in Turkey’s domestic energy market, one of the fastest growing in the region, as Ankara proceeds with privatisations of power distribution grids and generating assets.
Mr Medvedev and Recep Tayyip Erdogan, Turkish prime minister, both noted that they had also discussed future co-operation on Russia’s planned South Stream gas pipeline, and plans to build a refinery at the Mediterranean port of Ceyhan.
The Russian and Turkish governments today signed an agreement that would lead to Russia building a US$20 billion nuclear power plant in Turkey, the country's first.

The plant will be built on the coast of the Mediterranean Sea, and construction will commence as soon as the deal is approved by both countries; the building process is expected to take around seven years. The reactor will also be owned by Russia, which will hold "no less than a controlling stake," according to , who is the head of , a Russian nuclear energy corporation.

The reactor to be built is the second proposed power plant in the same location; a separate proposal for a four-reactor complex built by a Russian-led consortium was rejected by a Turkish court last year.  Russia has attempted to build a nuclear power plant in Turkey, and the contract signed Wednesday "really looks rather impressive," according to  Dmitry Medvedev.

The contract for the reactor was one of 20 signed by the two countries today, expected to result in around US$25 billion of Russian investment in Turkey. Other major contracts signed include projects to transport Russian oil and natural gas through Turkey to ports on the Mediterranean Sea. One such project is a major pipeline between the Turkish ports of  on the Black Sea and  on the Mediterranean Sea, built in conjunction with an oil refinery in Ceyhan.

In a press conference, Russian President Medvedev said that the agreements signal "a new page in our cooperation...Our talks today showed that Turkey and Russia are strategic partners not only in words but in deeds."  Abdullah Gul said that the two countries "share a determination to increase the trade volume from a current US$38 billion to US$100 billion in five years."