State-owned energy major Abu Dhabi National Energy Co (TAQA) confirmed Monday that it will delay its $12 billion development investment in Turkey for new coal-fired power projects, reports Reuters. According to the article, TAQA said plans to start construction of the new thermal plants will be delayed until at least 2014.
"Due to other spending priorities, TAQA has decided to defer the investment decision in Afsin-Elbistan until 2014," an unnamed TAQA spokesman was quoted by Reuters.
However, some analysts are saying the move is truly a pressure tactic being deployed in response to the Turkish government’s position towards the latest developments in Egypt. The UAE, along with other Gulf Cooperation Council (GCC) states, has maintained support of the Egyptian army, while Turkey has condemned the removal of Egypt’s elected president Morsi as a coup.
“This is a drive by the UAE and the GCC states to exercise pressure on the Turkish government to do a U-turn on their position towards the Egyptian cause,” Gulf News quoted Amer Nouman Ashour, chief analyst and economist at CNBC Arabia. “The step by the UAE is a consequence of the Turkish government’s stance towards Egypt.”
Development of Turkey's domestic lignite coal resources is a priority because it will enable the nation to reduce its dependence on imported natural gas. Approximately 40 percent of Turkey's lignite is located in the Afsin-Elbistan basin.
In January, TAQA and Turkey signed an intergovernmental agreement for the development of ignite coal-fired power plants and associated mines in the Afsin-Elbistan region of Turkey. According to TAQA, the agreement marked the beginning of exclusive negotiations between TAQA, Turkey’s Electricity Generation Co, and the Turkish government for new power generation developments with a capacity of up to 7,000 MW.