Preparation for the summer season is not the main concern of people living in Amasra – if a plan for two new coal plants, with total capacity of 2420 megawatts, materialises, the livelihood of local people will vanish in the smoke.

In 2012 Turkish energy Minister, Taner Yildiz, announced grand plans for Turkey switching from gas to coal, with the country’s large coal reserves to be exploited. The government plan was also to tender new power plants with capacity of as much as 18,000 MW by 2023 for an estimated investment of around USD 25 billion.

Two of these proposed new coal power plants are to be situated in Amasra, with a further six to be sited in the provinces of the neighbouring city Zonguldak. Thus, there are to be at least 11 power plants – including the three power plants in Zonguldak that are already in operation – within an area of 78 kilometres. All of them would require Black Sea water with inevitable significant impacts for the sea’s temperature and thus too for its flora and fauna.

The promises and enticements accompanying these investment plans for new greenfield power plants are that local coal reserves would replace imported gas and, of course, jobs. Yet people living in Amasra already have evidence that this prosperous picture is little more than a pipedream.

Most of Turkey’s coal reserves are low-grade lignite – so-called brown coal, expensive to extract for the energy it can produce, and highly polluting. Amasra does have local bituminous coal mining, but in the 1990s coal mining in the area declined. Remaining reserves are located 200 to 400 metres below sea level, are costly to extract and are of low energetic value. Amasra coal would need to be enriched to reach the caloric values required for the new coal power plants.

Local people in fact have doubts that local coal will be extracted at all – the costs would be at least 30 percent higher than the current world prices of coal (EUR 60 per tonne). Indeed the company that will invest in one of the new coal power plants, Hema Elektrik Üretim A.Ş, has been exploring three mines in Amasra since 2007 area but to date no coal has been extracted.

There is further evidence that the coal used will not be local but imported. Just 40 kilometres west, on the sea coast in Çatalağzı (a district of Zonguldak province), two new coal-fired power plants were constructed in 2010 with total capacity of 1390 megawatts – these are called Zonguldak Eren Termik Santrali (ZETES 1 and ZETES 2).

Initially local people did not protest – coal had been the main industry in the area for decades. However, today the coal for the plant is being imported from Brazil, Australia, Ukraine and Russia. The owner of the power plant, Eren Enerrj Elektrik Uretim A.Ş.(Eren Holding), constructed a new coal port, the largest on the Black Sea coast and capable of accomodating 170,000 deadweight ton ships. Promises for local employment failed to materialise and the area is in terminal decline due to high air and sea pollution and growing mortality rates for children. In 2012, Eren Holding began the process of obtaining permission for a new power plant (ZETES 3) in the same area as ZETES 1 and 2, with projected capacity of 1320 megawatts.

Residents in Amasra, Bartin, Çatalağzı and Zonguldak are – not surprisingly – growing fearful. As time passes, they are finding out about new and different aspects of the massive coal energy development plans that are shaping up on their doorstep in the Black Sea region.

The information that leaks out normally arrives in slices: Hema first requested a permit for coal exploration in Amasra in 2005; the ensuing permit facilitated the first request for permission for a 1100 megawatt coal plant in Amasra that was granted in 2009. Today requests for permits for coal power plants bubbled to total capacity of 2420 MW adding request for second TPP in Amasra.

Turkish media has also reported Hema’s announcement of plans for coal plants totalling more than 4000 megawatts in capacity. Key aspects such as a new port, the disposal of sludge and ashes, and the construction of new transmission lines have not yet been defined in the request for the new power plants and are still to come.

As a result of these developments, in 2010 and 2011 people in Amasra and Bartin undertook major public demonstrations, and were successful in blocking Turkey’s Ministry of Environment giving the necessary environmental permit for the two new coal plants. In 2013, however, a new process for environmental permitting was opened for the same power plants under new names: Batı Karadeniz Entegre Power Plant and Hema Entegrated Power Plant.

The role of the IFIs

The Turkish finance sector is getting behind the twin Turkish government objectives of increasing energy production and decreasing import dependency mainly through coal fired power plants.

According to a projection from the finance sector, 50,000 megawatts of power capacity is scheduled to be installed in Turkey by 2023. While funding for 20,000 megawatts has been secured, the remaining 30,000 megawatts is yet to receive confirmed financing. The Turkish banking sector, though, is confident that it can provide the loans to finance these projects and they have identified domestic coal projects as one of their priorities.

International financial institutions (IFIs) such as the World Bank, the EIB and the EBRD have also been supportive of Turkish energy policies, especially as Turkey has made progress in liberalising its energy market. As the EBRD’s country strategy for Turkey mentions: “Recent reforms in the energy sector – especially to promote private sector participation, energy savings and renewables – as well as in the areas of competition law, labour market efficiency, improvements in the business environment and promotion of regional trade reinforce the prospects for sustainable growth and development.”

Nonetheless, the stuttering competitiveness of renewable energy and energy efficiency measures, as a result of high subsidies for coal power plants (not to mention the climate change impact of such), is not discussed in the respective IFI strategy documents for Turkey.

Both the EIB and the EBRD have, though, chosen support for sustainable energy and investing in strengthening the competitiveness of the Turkish economy through support for Turkish financial institutions as priority issues. Since 2009 the EIB has supported the Turkish financial sector with more than EUR 4 billion in credit lines, amounting to 44 percent of the EIB’s total portfolio in Turkey. Key Turkish partners for both banks to date have been AkBank, DenizBank, FınansBank, GarantiBank, IşBank, VakıfBank and YapıkrediBank.

Interestingly, however, the same Turkish banks are also the main actors in the development plans for future Turkish coal power plants. For example, IşBank and Garanti Bank are the main financiers of Eren’s plans for the development of the ZETES 2 and ZETES 3 coal power plants.

Determining who – and what – are the final beneficiaries of both EIB and EBRD investments in Turkey’s financial sector is no easy task: such information, as in every country where these development banks do business, is not publicly available. Equally, both banks’ assessment of their main partner banks, in terms of their standards and capacity to deliver on European objectives is also not available. It is surely incumbent, therefore, on both the EBRD and the EIB to confirm or deny that their financing of these Turkish financial intermediaries noted above is not supporting the construction of new coal plants in Turkey.

What next for Amasra?

The case of Amasra and its enduring struggle with coal power is symptomatic of the environmental and health challenges that a number of communities along the Black Sea coast of Turkey are having to contend with. As Turkey’s development of coal picks up pace, the story of people in Amasra and elsewhere deserves to be heard. The losers in Turkey’s massive coal-centric energy plans will not only be the Black Sea, with its extremely vulnerable ecosystem.