Armed Conflict Stops Hydro Project in Turkey

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Norwegian energy company Statkraft AS (Oslo, Norway) has been forced to suspend work on the 517-megawatt (MW) Cetin hydropower plant in Turkey due to continued fighting between the Turkish government and rebel Kurdish forces.

The company has stopped work on the project which is located on the Botan River, a tributary of the Tigris River in the southeast Antolia region, after a two-and-a-half- year ceasefire ended between Turkish forces and the Kurdistan Workers' Party (PKK). The company did not say when, or if, work will resume but said that it expects the stoppage to cost it approximately $245 million. The Cetin project is the largest Statkraft hydropower plant outside of Norway. It comprises the Cetin Main power plant, with a generating capacity of 401 MW, and the 116-MW Lower Cetin plant, located six kilometers downstream. Industrial Info puts the total investment value of the combined projects at $510 million. Both projects were expected to be commissioned late next year.

"We had to suspend the project as the end to the ceasefire between the PKK and the Turkish authorities resulted in armed incidents in the region, close to our site," explained Statkraft Chief Executive Officer Christian Rynning-Toennesen to Reuters. "We took the full write down on the assets, in case the plant is never built."

The conflict in the region has cost 40,000 lives since 1984.

Statkraft got the go ahead for the Cetin project in 2009 from the Energy Market Regulatory Authority (EPDK / EMRA) with a licence to operate there for 49 years. If completed, it will be able to produce about 1.4 terawatt hours (TWh) of electricity per year, equivalent to 1% of Turkey's total electricity demand and 3% of its hydropower capacity. Cetin is the largest of three projects in the Turkish portfolio purchased by Statkraft in June 2009.

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