TURKIYE
The Kangal Thermal Power Plant. Photo Credit: Konya Şeker Sanayi ve Ticaret A.Ş.
November 8, 2026
By Haluk Direskeneli
Key Takeaways:
Electricity generation has stopped at Turkey’s 457 MW Kangal Thermal Power Plant after its coal contractor halted deliveries on 30 October 2026 over unpaid bills, while the related 990 MW Soma B plant was sold in October to its largest creditor, Turkish Coal Enterprises, for TRY 6.946 billion.
Both cases highlight post-privatization financial strains involving coal-supply debts, aging equipment and limited working capital, with Kangal’s roughly 950–1,000 workers placed on leave.
The developments underscore the need for integrated financial discipline, diversified supply arrangements and timely rehabilitation to sustain reliable domestic lignite-based generation.
Developments at two major thermal power plants have raised renewed concerns about the financial sustainability of Turkey’s domestic coal-based electricity generation sector.
Electricity generation has stopped at Kangal Thermal Power Plant, one of Turkey’s important domestic lignite-fired facilities. Meanwhile, Soma B Thermal Power Plant, controlled by the same parent company, went through an enforcement sale process because of accumulated coal supply debts. In October 2026, the plant was sold to its largest public creditor, Turkish Coal Enterprises (TKİ).
Taken together, these developments raise broader questions about the financing, coal supply arrangements, maintenance investments and debt repayment capacity of large energy assets following privatization.
Production stops at Kangal thermal power plant
Located in Kangal, Sivas, Kangal Thermal Power Plant has been generating electricity since 1989. Its total installed capacity is 457 MW, consisting of three units: two 150 MW units and one 157 MW unit.
The plant was designed to operate on locally produced, low-calorific-value lignite. According to operating information published by Konya Şeker, the average heating value of the coal is approximately 1,100 kcal/kg, while daily coal consumption is around 21,000 tonnes.
According to the company’s public disclosure dated 6 November 2026, Madencilik İnşaat Sanayi ve Ticaret A.Ş., the contractor responsible for coal production and overburden removal activities since 2019, stopped coal production and deliveries on 30 October 2026. The company cited outstanding payments as the reason for its decision.
The disclosure also stated that the plant did not have an alternative coal supply source.
As a result, the 457 MW power plant, which requires approximately 21,000 tonnes of coal every day, was forced to suspend electricity generation following the interruption of fuel deliveries.
However, the coal supply interruption was not the only issue. The company’s disclosures also referred to technical failures, production losses and a significant decline in revenue, all of which contributed to the plant’s financial and operational difficulties.
Soma B thermal power plant: the cost of accumulated debt
Developments at Soma B Thermal Power Plant, which is also controlled by the same parent company, need to be considered when assessing the situation at Kangal.
Konya Şeker acquired Kangal Thermal Power Plant in 2013 for USD 985 million and Soma B Thermal Power Plant in 2015 for USD 685.5 million.
With an installed capacity of 990 MW, Soma B is one of Turkey’s major domestic coal-fired power plants.
Over time, however, substantial payment difficulties emerged in connection with coal supplies. Outstanding payments to Turkish Coal Enterprises (TKİ), the plant’s coal supplier, together with accumulated interest, led to enforcement proceedings.
The first auction for the plant attracted no buyers. Following the second auction, Soma B Thermal Power Plant was sold in October 2026 to TKİ, its largest creditor, for TRY 6.946 billion.
Consequently, an important power generation asset that had been transferred to the private sector in 2015 entered a process of returning to public ownership because of difficulties in collecting outstanding debts.
This development demonstrates the importance of working capital management and timely coal payments following the privatization of major energy assets.
A common issue: financial sustainability
The legal circumstances and creditors involved in the Soma and Kangal cases are different.
At Soma, enforcement proceedings arose from unpaid coal supply obligations to TKİ. At Kangal, the immediate problem was the suspension of coal deliveries by a private mining contractor following difficulties in collecting outstanding payments.
Nevertheless, both cases highlight a common concern: the financial sustainability of coal supply chains and the ability of power plant operators to meet their payment obligations.
A thermal power plant is much more than a boiler, steam turbine and generator. Coal mining, overburden removal, transportation, stock management, fuel handling and electricity generation form an interconnected operating system.
A payment problem at any stage of this chain can eventually interrupt the operation of the entire facility.
At Soma, the inability to collect outstanding payments by a public institution resulted in enforcement proceedings and a change in ownership. At Kangal, payment difficulties involving a private mining contractor led directly to the suspension of coal deliveries.
For this reason, the situation at Kangal should not be viewed simply as a temporary fuel supply problem. The company’s overall financial position, bank loans, cash flow and outstanding obligations also need to be examined.
Ageing equipment and the need for rehabilitation
The first two units at Kangal are approximately 37 years old, while the third unit is around 26 years old. Soma B also has generating units that have been in operation for many years.
At thermal power plants of this age, regular maintenance and modernization of boilers, steam turbines, generators, coal mills, fans, electrostatic precipitators, ash handling systems and flue gas treatment equipment are essential.
As equipment ages, the frequency of failures may increase. Maintenance costs can rise, while plant availability and annual electricity generation may decline.
Facilities operating on low-calorific-value lignite require large quantities of coal to be mined, transported and burned. This makes effective financial coordination between mining operations, logistics and power plant management particularly important.
Delaying rehabilitation investments may appear to reduce short-term expenditure, but it can increase production losses and operating costs over the longer term.
The Kangal and Soma cases demonstrate why technical modernization and financial sustainability must be considered together.
Reviewing the privatization and operating model
One of the main expectations behind the privatization of Turkey’s thermal power plants was that private sector investment and management would improve operating efficiency and support electricity generation.
However, acquiring a power plant and operating it economically over many years are two different challenges.
Acquisition financing, bank loans, coal supply payments, personnel expenses, maintenance investments, environmental compliance and electricity sales revenues must all be managed together.
Changes in electricity market prices, rising production costs and higher financing expenses can place considerable pressure on the cash flow of large thermal power plants.
The enforcement sale at Soma demonstrates that financial difficulties following privatization can ultimately lead to a change in ownership.
At Kangal, the previously announced sale process, suspension of production and uncertainty over coal supplies raise further questions about the plant’s future and the possibility of attracting a new investor.
It would be premature to conclude that Kangal will face the same legal process as Soma. However, since both plants are controlled by the same parent company, the group’s overall financial position deserves closer examination.
Employees and the local economy
According to reports, Kangal Thermal Power Plant employs approximately 950 to 1,000 people, including permanent and subcontracted workers.
Following the suspension of production, employees other than the minimum personnel required to maintain technical, administrative and financial operations were instructed to use their remaining annual leave, followed by unpaid leave.
A prolonged shutdown would affect not only employees but also local businesses, transport companies, service providers and other enterprises connected to the plant.
The change in ownership at Soma also represents a new period for employees and the local economy.
These facilities are not simply electricity generation assets. They are also major sources of employment and commercial activity in their respective regions.
What should be expected in the coming months?
For Kangal Thermal Power Plant to resume operations, the coal supply issue must first be resolved. In addition, the settlement of the mining contractor’s outstanding payments, the repair of technical equipment and the provision of sufficient working capital will be essential.
The company’s bank debt, obligations to public institutions and private suppliers, possible debt restructuring arrangements and any financial security interests over the plant also need to be examined.
At Soma, following the sale to TKİ, the future operating model, financing arrangements and the position of employees will be important issues.
Both plants need a financially sustainable and technically reliable operating model.
Lessons for Turkey’s energy policy
The developments at Kangal and Soma Thermal Power Plants offer important lessons for Turkey’s domestic coal policy.
Making effective use of domestic coal resources requires more than building power plants. Mining, overburden removal, transportation, stock management, electricity generation, maintenance and financing must operate as parts of an integrated system.
Dependence on a single supplier should be carefully managed at major energy facilities. Adequate coal stocks, long-term supply agreements and reliable payment arrangements are essential elements of operational security.
Following privatization, the financial position of power plant operators should also be monitored carefully, while maintenance and rehabilitation investments must not be postponed.
At Soma, a public institution had to take ownership of the plant to recover its outstanding receivables. At Kangal, production stopped because a coal supplier could not collect its payments.
Both cases highlight the importance of financial discipline in the energy sector.
The real value of a thermal power plant cannot be measured by its installed capacity alone. It also depends on its ability to secure fuel supplies, pay its employees, maintain its equipment, service its debts and generate electricity reliably.
The experiences of Kangal and Soma remind us of an important principle: energy security is not simply about having domestic energy resources. It is also about operating those resources efficiently, responsibly and sustainably.
About Haluk Direskeneli
Haluk Direskeneli, is a graduate of METU Mechanical Engineering department (1973). He worked in public, private enterprises, USA Turkish JV companies (B&W, CSWI, AEP, Entergy), in fabrication, basic and detail design, marketing, sales and project management of thermal power plants. He is currently working as freelance consultant/ energy analyst with thermal power plants basic/ detail design software expertise for private engineering companies, investors, universities and research institutions. He is a member of Chamber of Turkish Mechanical Engineers Energy Working Group.
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