Taqa signs $12b Turkey deal
The UAE has signed an agreement with Turkey, which will allow state-linked energy giant Taqa to develop $12 billion worth power plants and explore coal mines in the resource rich Afsin-Elbistan region.
The agreement will allow talks between Abu Dhabi National Energy Company, or Taqa, Turkey’s Electricity Generation Co, and the Turkish government for the project with a combined power generation capacity of up to 7,000MW.
The negotiations will lead to the signing of a Host Government Agreement in the second quarter of 2013, establishing more detailed terms.
Abu Dhabi and Turkish companies have signed an MoU for the establishment of a project company in which Taqa and any future partners would retain the majority shareholding.
The project company will acquire, modernise and expand the existing 1,400MW Plant B and develop several new power plants and associated mines in sectors C, D, E and G of the Afsin-Elbistan region in southern Turkey. Preparatory work on Plant B and the feasibility study for the planned 1,440MW Plant C and associated mine development will start immediately.
The development of Turkey’s indigenous lignite resources is a priority because it enables the nation to reduce its dependence on imported natural gas. Lignite’s role in power generation is set to expand alongside rapid growth expected in electricity demand.
Approximately 40 per cent of Turkey’s lignite is located in the Afsin-Elbistan basin.
The agreement was signed by Taner Yildiz, Minister of Energy and Natural Resources of Turkey, and Mohammed bin Dha’en Al Hamili, UAE Minister of Energy. The event was held in the presence of Abdulla Saif Al Nuaimi, director-general of Abu Dhabi Water and Electricity Authority (Adwea) and vice-chairman of Taqa; and Khaled Al Mu’alla, Ambassador of the UAE to the Republic of Turkey.
Al Hamili said the agreement further strengthens the bond between Turkey and the UAE, adding an important commercial dimension to this strategic relationship. Yildiz stated that the agreement is worth $12 billion.
“This is a very serious investment, a significant investment,” Yildiz said at the signing ceremony in Ankara.
“This is the second-biggest investment made in Turkey after the two nuclear power plant projects,” he added.
“The Turkish economy has been doing very well over the years... because you have a good investment climate. If you have a good investment climate, we’ll come and invest,” Al Hamili said.
The energy minister hailed the multi-billion-dollar joint venture with Turkey as “strategic” and as a sign of an ever-growing trade relationship.
In 2012, the trade between Turkey and UAE amounted to $9.0-10.0 billion, the minister noted.
“We can only see that we’ll increase our investment in Turkey and hope that we succeed.”
On this occasion, chairman of Taqa Hamad Al Hurr Al Suwaidi said: “This historic partnership will achieve progress for both our nations.”
Carl Sheldon, chief executive officer of Taqa, said the energy company offers Turkey a durable partner to develop this strategic project enhancing Turkey’s energy security.
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