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UAE government signs power plant deal with Turkey

TAQA to begin negotiations with Turkish parties for 7,000 MW project

The proposed power plant will have a capacity of 7,000 MW (Image for illustrative purposes)
The proposed power plant will have a capacity of 7,000 MW (Image for illustrative purposes)

The UAE has signed an Intergovernmental Agreement with Turkey for the development of power plants and associated lignite mines in the Afsin-Elbistan region of Turkey.

The agreement marks the start of exclusive negotiations between Abu Dhabi National Energy Company PJSC (TAQA), Turkey’s Electricity Generation Co. Inc. (EÜAŞ) and the Turkish government for the project with a combined power generation capacity of up to 7,000 MW.

TAQA and EÜAŞ have been selected as the government-related entities responsible for implementing the project. The two companies have signed a Memorandum of Understanding for the establishment of a project company in which TAQA and any future partners would retain the majority shareholding.

In accordance with the Intergovernmental Agreement, the project company will acquire, modernise and expand the existing 1,400 MW 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 1,440 MW Plant C and associated mine development will start immediately.

H.E. Mohamed bin Dhaen Al Hamli, Minister of Energy of the United Arab Emirates, said: “This agreement further strengthens the bond between Turkey and the UAE, adding an important commercial dimension to this strategic relationship.”

According to TAQA, the development of Turkey’s lignite resources is considered a priority as 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 % of Turkey's lignite is located in the Afşin-Elbistan basin.

The negotiations will lead to the signing of a Host Government Agreement in the second quarter of 2013, establishing more detailed terms.

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