Euro bank backs privatization of two Turkish hydropower plants

ISTANBUL

The European Bank for Reconstruction and Development (EBRD) has said it is supporting a major milestone in the privatization of state-owned power plants in Turkey with a $55 million dual-currency loan to a subsidiary of Koç Holding, the largest diversified conglomerate in the country.

Entek Elektrik Üretimi A.Ş, the winning bidder of a competitive privatization tender, is acquiring two hydropower plants in Kahramanmaraş province in Turkey’s south-east: Menzelet, with 124 MW capacity, and Kılavuzlu, with 54 MW.

The plants supply clean, renewable energy to a Mediterranean area with a population of more than a million and important industrial installations.

In a statement late on March 9, the Bank said the loan is part of a dual-currency financing package of 1.05 billion Turkish liras, equivalent to around $260 million, to finance the acquisition. Other lenders include Garantibank, İşbank, Akbank, Yapıkredi, Unicredit and ICBC Turkey, according to the statement.

Arvid Tuerkner, EBRD Managing Director for Turkey, said: “Privatization is a key part of the Turkish government’s strategy to liberalize the country’s energy sector. Our investment supports the goal of increasing the participation of private suppliers in power generation and reinforces the role of renewable energy in the sector.”

Entek began investments in 1995 and operates six hydroelectric power plants and a gas-fired power plant.

Yağız Eyüboğlu, Chairman of Koç Holding Energy Group, said: “Taking over the operating rights of these two hydroelectric power plants in Kahramanmaraş is an important step for the Koç Group’s vision of growing in sustainable and renewable energy. In order to be one of the leading power generation companies, Entek continues to strengthen its portfolio. By winning the biggest privatization tender in 2017, we have demonstrated our vision and belief in the future of our country.”

In 2017, Entek had a total 178 MW of installed capacity. With these two power plants, our installed capacity has almost doubled to 422 MW, according to the statement.

The privatization of Menzelet and Kılavuzlu is the largest acquisition of hydropower plants by a domestic investor in Turkey, read the statement.