Abu Dhabi: Abu Dhabi National Energy Co (Taqa) confirmed on Monday that it is withdrawing its $12 billion (Dh44.07 billion) investment in Turkey.

Taqa had signed an agreement with Turkey in January to invest $12 billion to develop coal fields in Southern Turkey.

“Taqa was supposed to invest $12 billion in the construction and modernisation of thermal power plants [TPPs] in Turkey,” a source at Taqa said.

The construction and commissioning of those thermal power plants in Turkey’s Afsin-Elbistan region would have created more than 10,000 jobs.

Amer Nouman Ashour, chief analyst and economist at CNBC Arabia, said the move by some UAE companies is in line with the GCC drive to force the Turkish government to change its position towards Egypt.

Pressure tactic

“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. The step by the UAE is a consequence of the Turkish government’s stance towards Egypt,” Ashour said.

A circular issued by the UAE Central Bank to commercial banks last month sought details about their financial exposure to Turkey. This is viewed as a “precautionary measure” against the backdrop of the sliding Turkish lira and rising UAE investments in Turkey, particularly those in local currencies.

Major UAE companies are investing in Turkey and the UAE has become one of the largest investors in Turkey. The move by the UAE Central Bank aims to safeguard the country’s investments in Turkey.