The economic outcomes of the recent Turkish-Russian summit and a string of financial moves by the Russian builder of a nuclear power plant in Turkey have come as fresh signs that Turkey is becoming a safe harbor for sanctions-hit Russian capital. For some observers, the moves amount also to a financial lifeline for Turkish President Recep Tayyip Erdogan as he grapples with economic turmoil ahead of crucial elections next year.

Money transfers by Rosatom, the state-owned Russian company building Turkey’s first nuclear power plant in Akkuyu; a deal allowing Turkey to pay in rubles for some of its Russian gas imports; and moves to expand the use of the Russian Mir payment system in Turkey are all seen as the pieces of an integrated effort between Ankara and Moscow.

According to experts monitoring Russian capital movements, flows to Turkey have increased since Russia’s invasion of Ukraine in February and the ensuing Western sanctions targeting the Russian economy. Many Russian companies have come to import goods from Europe via Turkey. The Turkish experience in trading in rubles, which dates back to the 1990s, when Turkey emerged as a hub of “suitcase trade” for Russians, facilitates mutual dealings.

In the first of a string of remarkable developments, Rosatom terminated the contract of its Turkish partner IC Ictas on July 26 and began wiring dollars to its subsidiary building the nuclear power plant in southern Turkey, formally known as Akkuyu Nuclear JSC. An initial transfer of about $5 billion was to be followed shortly with two similar sums, Bloomberg reported. A source close to the banking sector, however, told Al-Monitor that the initial transfer, made via Turkey’s public bank Ziraat, was of some $2.6 billion.