Azernews.Az

Turkey signed an agreement with the United Arab Emirates on Thursday for the development of coal fields in southern Turkey to generate electricity, Hurriyet Daily News reported.

The agreement between Abu Dhabi-based TAQA and Turkey's state-run power company EUAS marks the biggest Arab investment in the Turkish energy sector, a senior energy ministry official told AFP.

"This is a very serious investment, a significant investment," Turkish Energy Minister Taner Yıldız said at the signing ceremony in Ankara.

"This is the second-biggest investment made in Turkey after the two nuclear power plant projects," he added.

With the agreement, the coal reserves at Afsin-Elbistan basin in southern Turkey will be put to use for elecricity production.

The basin has the potential to power new power plants with a total installed capacity of 8,200 megawatts. The Afsin-Elbistan basin posseses 4.4 billion tonnes of coal reserves, which account for approximately 40 percent of Turkey's lignite resources.

Turkey places priority on the development of its lignite in an attempt to reduce its dependence on imports of natural gas. With a new power plant that will be established in this region, Turkey is hoping to cut nearly $1.2 billion worth of natural gas imports, which account for a large part of the country's current account deficit.

Turkey, which produces most of its electricity from natural gas, is heavily dependent on imported energy.

And it is under severe pressure from its Western allies to reduce gas imports from neighbouring Iran owing to Tehran's disputed nuclear programme. Iran is Turkey's second-biggest natural gas supplier after Russia.

But government officials repeatedly said that Turkey would keep buying natural gas from Iran which supplies 18-20 percent of the gas it consumes.