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Taqa Sees Accord on $12 Billion Turkish Energy Project Next Week

Abu Dhabi National Energy Co., the Emirati oil and power company known as Taqa, plans to sign a cooperation agreement on energy production in Turkey next week.

Taqa will build 7,000 megawatts of generation capacity, fired by coal from a mine in Afsin Elbistan that it will expand, the company said today by e-mail. Turkish Energy Minister Taner Yildiz said Dec. 26 the investment may total $12 billion.

Turkey has lured international investors including RWE AG (RWE), EON SE (EOAN), OAO Inter RAO UES (IRAO) and OMV AG to its power industry as the energy regulator forecasts annual demand growth of 6.3 percent in the next two decades. The country is bucking the trend of most emerging European nations, where retail electricity consumption is trailing growth in incomes.

Taqa also intends to acquire an existing 1,400-megawatt coal-fired power station at the Afsin Elbistan site in eastern Turkey, and start to upgrade the facility next year, it said. The entire mining and generation project, which will be overseen by a joint venture between Taqa and Turkish state power producer Elektrik Uretim AS, will take more than a decade, it said.

The Afsin Elbistan site has 40 percent of Turkey’s reserves of lignite, a soft brownish-black coal, according to the Emirati company.

Together with Elektrik Uretim, Taqa will work on getting financing from “various sources, such as export credit agencies, multilateral agencies, Turkish and international commercial banks and investment funds,” it said. The company, majority-owned by the government of Abu Dhabi, is able to attract financing “at the lowest cost,” it said.

To contact the reporter on this story: Ercan Ersoy in Istanbul at eersoy@bloomberg.net

To contact the editor responsible for this story: Amanda Jordan at ajordan11@bloomberg.net

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