ANKARA/ABU DHABI: Abu Dhabi National Energy Co. may shelve a $12 billion power project in Turkey amid a deteriorating economic outlook and increasingly difficult financing conditions, Turkish energy industry sources said Monday.
The state-owned oil explorer and power supplier agreed in January with Turkey’s state-owned Electricity Generation Co. on a project to build several power plants using lignite coal reserves in Turkey’s Afsin-Elbistan region.
The project was already challenging, Turkish energy sources said, given the low quality of coal in the area.
But a recent emerging market sell-off that sent Turkey’s currency to record lows has dampened its growth outlook and the possibility of further capital outflows has concerned TAQA.
“What we have been picking up from them recently is that they are looking at an eventual pullout,” an energy industry source said. “This was such a large-scale project, whose future was very much dependent on market conditions.”
TAQA said it had decided to defer the investment decision in Afsin-Elbistan until 2014, citing “other spending priorities.”
A TAQA spokesman declined to comment on the potential cancellation of the project.