Major trading house Itochu Corp. is backing away from a nuclear power plant project in Turkey because of a surge in safety-related costs, sources close to the matter said Tuesday.
Itochu withdrew at the end of March from a consortium that had been conducting a feasibility study for a 4,500-megawatt plant in the Black Sea coast city of Sinop. Another Japanese company, Mitsubishi Heavy Industries Ltd., will continue participating in the study.
It is now deemed difficult for the plant to become operational in 2023 as targeted, amid surging costs linked to safety measures and with total costs for the project ballooning to more than double the initially estimated ¥2 trillion (about $18.5 billion).
Safety-related costs to build nuclear plants have soared since the 2011 nuclear disaster at the Fukushima No. 1 plant, triggered by a magnitude 9 earthquake and ensuing tsunami.
Japan and Turkey agreed on the project in 2013, with the government of Prime Minister Shinzo Abe eager to export nuclear technology to emerging economies such as Turkey and India as part of the government’s growth strategy.