Turkey in talks with China over $12 billion Turkish coalfield and power plant investment deal

Out-Law News | 07 May 2014 | 10:12 am | 1 min. read

Turkey and China are in talks on a $10-12 billion investment deal for the development of the Afsin-Elbistan coalfield and power plant project in southern Turkey, Turkish energy minister Taner Yildiz has said, according to Reuters.

The development follows an announcement by the Abu Dhabi National Energy Co (TAQA) in August last year that it was going to postpone a final decision on investment in the project until  2014, after signing a deal with Turkey in relation to the project  in January 2013, Reuters said.

"There will be an investment of $10-12 billion in the Afsin-Elbistan field," Yildiz said this week, according to the news agency. "This will include use of the coalfields. We are in talks with China for a deal on this subject."

"This is a big project," said Yildiz. "We have to set up the Afsin-Elbistan field project correctly. We have a big store of information. We are working with China on this." He said that it was not possible to say when any deal with China might be signed.

The Afsin-Elbistan region holds up to 45% of Turkey's reserves of lignite, otherwise known as brown coal, which is commonly used as a fuel for steam-electric power generation. The development of the Afsin-Elbistan coalfield also includes the construction of an 8,000 megawatt coal-fired plant.  

According to Reuters it is anticipated that lignite will play an increasing role in Turkey's power generation as the country's economic growth leads to higher demand for electricity.

Idil Bozoglu of Göksu Avukatlιk Bürosu, the exclusive alliance firm in Turkey of Pinsent Masons, the law firm behind Out-Law.com, said: "Turkey is aiming to reduce its imports of natural gas. In an interview last year Yıldız stated that major energy projects like these were belated targets, because none of the previous governments were in power long enough to sign and conduct these long-lasting energy projects."

Bozoglu said that Yildiz's confirmation that Turkey is in talks with China follows recent speculation in Turkey that entities from Japan, Qatar, South Korea as well as China might become involved in the Afsin-Elibistan project .

"It seems like discussions are getting to somewhere with China for today," Bozoglu said.