Battered by a government decision to phase out nuclear power, Germany's biggest energy firm E.on is eager to enter more lucrative markets abroad. It has now forged a joint venture with a Turkish energy group.
E.on had acquired a 50 percent stake in Turkish energy company Enerjisa, which was previously held by Austrian company Verbund, the German energy giant announced Tuesday. The contract had been approved by Enerjisa's Turkish owners Sabanci Group and was worth about 1.5 billion euros ($1.96 billion).
Under the deal, Verbund would receive shares in eight E.on hydroelectric power plants, in addition to a one-time cash payment of 300 million euros, E.on chief Executive Johannes Teyssen told a news conference.
"In Turkey we've found exactly what we're looking for. A stable market with interesting growth potential, and a well-established local partner," he said.
In recent years, the Turkish economy has reported strong economic growth and rising energy consumption. E.on said the joint venture was planning to build 8,000 megawatts of additional power capacity in Turkey by 2020, which would boost its market share from 4 percent to 10 percent.
E.on has seen profits slump since the German government shut down some of the firm's older reactors in the wake of the 2011 nuclear accident in Fukushima, Japan. In addition, Berlin's decision to completely phase out nuclear power by 2022 brought E.on to the limits of growth in its German home market, said CEO Teyssen.
The investment is part of E.on's drive to enter into more profitable emerging markets and follows a recent partnership with MPX energy utility in Brazil.