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Turkish President Recep Tayyip Erdogan at the Group of 20 summit in Rome in 2021.

Turkish President Recep Tayyip Erdogan at the Group of 20 summit in Rome in 2021. (Alessia Pierdomenico/Bloomberg)

Sanctions imposed over the invasion of Ukraine are complicating Russia's construction of a $20 billion nuclear power plant in Turkey, according to two Turkish officials.

The snags might delay a project critical for Turkey that President Recep Tayyip Erdogan has said will eventually meet about 10% of the nation's power demand.

Ankara and Moscow have discussed potential problems, including securing equipment that must be ordered from third countries by the builder, Russia's state-controlled Rosatom Corp., said a top Turkish official directly involved in the plant's construction.

Erdogan on Feb. 2 said two of four planned reactors at the Akkuyu site on the Mediterranean coast would be online in 2023. But the Turkish official, carefully avoiding the president's remarks, said only one would be operational next year in a sign authorities had already scaled back their expectations.

A second Turkish official also involved in the construction said Russia, anticipating problems over finance, has floated the idea of Turkey taking on funding of the project and later claiming compensation from Moscow as part of a potential barter deal.

There are no problems with parts and equipment supplied by Russia, or those ordered from third countries before the war, according to the second official.

In an emailed statement to Bloomberg, Rosatom said it was putting all its "efforts and resources" into completing the construction of the first unit in 2023. "The remaining units will come into service gradually at one-year intervals."

It said the company has the right to sell as much as 49% in Akkuyu to an investor, yet has all "the necessary resources and tools for the successful delivery of the project" even if it finances construction on its own. "The production and delivery of equipment" for the plant were on schedule, Rosatom said.

The project has received finance from Russia's biggest lender, Sberbank, which has been sanctioned by the U.S. and European Union. Rosatom, the sole owner of the Turkish plant and the world's biggest supplier of nuclear fuel and reactors, hasn't been sanctioned.

Work on the first Turkish reactor, known as Akkuyu 1, began in 2018, with engineers starting on Akkuyu 2 two years later. The project is scheduled to be completed by 2026.

The plant is among the more visible symbols of deep economic ties between Russia and Turkey dating back decades. As well as an oil refinery built by the Soviet Union near the town of Aliaga in the 1970s, Russian engineers developed other pillars of Turkey's industrial heartland, including an aluminum plant, textile and glass-making facilities.

Ankara, which on Tuesday hosted the latest round of talks aimed at ending the war in Ukraine, also heavily relies on Russian energy, which formed the bulk of $29 billion in total imports from the country in 2021.

And it hasn't closed its airspace to Russian planes, fearing a hit to business supply chains with inflation already above 54% and damaging Erdogan's prospects for re-election next year.

Recognizing Ankara's economic vulnerabilities, Western allies have held off pressuring Erdogan to fall in line with their penalties on Moscow. But as with any country trading with Russia, the war's imposing costs.

Fighting is hampering shipments to Turkey of key supplies including sunflower oil and wheat, as well as pig iron for steelmakers. Turkish exports to Russia halved while those to Ukraine stopped, the central bank said last week.

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