Taqa delays plans for big Turkish power project

Taqa has delayed an investment decision on a $12bn coal project in Turkey, its biggest project to date.

Power demand in Turkey is projected to grow by 6 per cent a year over the next decade. Above the Blue Mosque in Sultanahmet. Kerem Uzel / NarPhotos

Abu Dhabi National Energy (Taqa) has delayed plans for a US$12 billion coal mega project in Turkey until next year, citing "spending priorities".

The UAE and Turkish governments signed a deal in Ankara last January to build coal mines and coal-fired power plants to meet one tenth of Turkey's projected power demand. Taqa was due this summer to make an investment decision on the project, which would have been its biggest by value to date.

Taqa was to partner with the local utility Elektrik Uretim under the January agreement. According to the Turkish Daily News, Taqa sought but failed to find a second local partner to take on part of its majority stake for a financing contribution of $1.7bn.

"Taqa is pleased with the rapid and considerable progress made in talks on an investment in the Afsin-Elbistan power development under the auspices of the intergovernmental agreement between the UAE and Turkey," said a spokesman. "Due to other spending priorities, Taqa has decided to defer the investment decision in Afsin Elbistan until 2014."

Turkish markets have been rattled this year as protesters squared off against Recep Tayyip Erdogan, the prime minister.

But with power demand projected to grow by 6 per cent a year over the next decade, Turkey has been eager to welcome energy investors from around the world. South Korean and Turkish officials previously floated the idea of the UAE entering as a third-party investor in Turkish nuclear reactors, were a Korean consortium to secure contracts there.

However, Korea Electric Power Corporation, the government-owned utility, lost out in Turkey's last bidding round in May to a French and Japanese consortium.

Last month Taqa reported a second-quarter loss of Dh172 million stemming from outages at its power plants in Morocco, the United States and India and lost production at a North Sea platform under repair for a leak.