REC is a subsidiary of Zorlu Energy and the deal is an "emission reductions sale agreement."

Salim Arslanalp, director general of Zorlu Energy Electric Generation Co., said in a statement the agreement is an important step for the energy sector in Turkey.

The plant is expected to generate about 135 megawatts of installed capacity and could begin producing energy in Osmaniye in 2009 with an annual capacity of 500,000 megawatts.

"We will be producing electricity with 400,000 tons of carbon dioxide reduction," Arslanalp said.

Gurcan Gurel, director general of Ecosecurities group's representative in Turkey, Iltekno Co., said Turkey had great potential in technologies enabling carbon dioxide reduction and said companies investing in wind power plants, modern garbage storage facilities, hydroelectric terminals and energy efficiency projects could help their companies through carbon credits.