What follows is a piece by Aaron Stein, a research associate at the Royal United Services Institute (RUSI) and a doctoral candidate at King’s College London. Aaron has agreed to be an Arms Control Wonk “pinch hitter” and contribute posts about nuclear-related issues in the Middle East. He blogs at Turkey Wonk. Follow him on Twitter: @aaronstein1.
A Turkish Success Story?
After the revolts in Tunisia, Egypt, and Libya the Turkish model was, once again, back en vogue. While the idea of a Turkish political model has been around since shortly after the end of World War II, the culturally conservative and democratically elected Justice and Development Party (AKP) appeared to be an ideal model for the “Arab Spring” states to emulate. The AKP’s leadership strongly supported the Egyptian revolution and sought to leverage its regional popularity to carve out a larger role for itself in the Middle East. These efforts have failed. Yet, its recent nuclear energy related successes with Russian and Japanese nuclear energy firms may signal the start of a “Turkish nuclear financing model” for other cash-strapped countries in the Middle East to follow.
Turkey Opts for the “Pay Later” Option
In 1983, Ankara began to insist on a unique financing model for its nuclear tender known as Build, Operate, Transfer, or BOT. The financing model demands that the foreign supplier pay for the cost of construction and operate the reactor. The foreign firm was expected to recoup expenses through guaranteed electricity sales and then transfer the power plant to a local company. In return, the new local operator would pay the the foreign firm a percentage of the profits made from the sale of electricity until the reactor was decommissioned.