Turkey and the UAE have entered an intergovernmental agreement to develop power plants and associated coal mines in Turkeys southern region of Afsin-Elbistan.
The agreement marks the start of exclusive negotiations between Abu Dhabi National Energy Company (TAQA), Turkeys Electricity Generation Co. Inc. (EÜA?) and the Turkish government for the project with a combined power generation capacity of up to 7,000 MW.
The two companies signed a memorandum of understanding 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 1,400 MW Plant B and develop several new power plants and associated mines in sectors C, D, E and G of Afsin-Elbistan. Preparatory work on Plant B and the feasibility study for the planned 1,440 MW Plant C and associated mine development will start immediately.
Mohamed bin Dhaen Al Hamli, the UAEs energy minister, said: This agreement further strengthens the bond between Turkey and the UAE, adding an important commercial dimension to this strategic relationship.
Carl Sheldon, CEO of TAQA, said: As a full-scale energy company, TAQA offers Turkey a durable partner to develop this strategic project enhancing Turkeys energy security. This agreement paves the way for TAQA to enter an emerging merchant market for power, demonstrating TAQAs increasing maturity as a developer and operator of assets through the energy value chain.
The development of Turkey's indigenous lignite coal resources is a priority because it enables the nation to reduce its dependence on imported natural gas. Lignites 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 Af?in-Elbistan basin.
The negotiations will lead to the signing of a Host Government Agreement in the second quarter of 2013, establishing more detailed terms.