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Abu Dhabi firm defers coal project with Turkey

Abu Dhabi National Energy Co. (TAQA) -- the United Arab Emirates' (UAE) state-owned oil explorer and power supplier -- has deferred a $12 billion project to build coal-fired power plants in Turkey, sparking criticism that politics plays too strong a role in the UAE's investment decisions.
Associate Professor Ramazan Taş, the head of the economics department at Turgut Özal University, said policy conflicts between Turkey and the UAE could harm economic relations, and held up TAQA as an example.

“It is not surprising that all decisions are driven by political motives in Abu Dhabi, since the monarchy manages the [country's] investments instead of the markets.''

Energy Minister Taner Yıldız has said on Tuesday that he hopes TAQA's decision to delay the construction of coal-fired power plants to 2014 in southern Turkey is not a political reaction.

If TAQA's decision is political, he said, it would reveal the extent of the two countries' differences on Egypt and Syria. “If it doesn't work out with TAQA, we'll continue on our way with another firm,” he added.

“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. Due to other spending priorities, TAQA has decided to defer the investment decision in Afsin Elbistan until 2014,” said TAQA in a recent written statement.

The agreement between TAQA and Turkey's state-run power company EUAS lays out the biggest Arab investment in the Turkish energy sector.

The Afsin-Elbistan region holds about 40 percent of Turkey's lignite and could provide up to 8,000 megawatts of power production capacity in the nation's southeast if the coal potential there is fully exploited, according to the Turkish Energy Ministry. The project is expected to create 15,000 jobs.

Source: World Bulletin