Verbund may sell stake in Turkish power plant

ISTANBUL

Sabancı Holding chair Güler Sabancı (C) is seen at the opening ceremony of an Enerjisa wind power facility in this file photo.

Austria’s Verbund is in talks to sell its stake in Turkish energy firm Enerjisa to E.ON Ruhrgas, four sources close to the deal told Reuters Aug. 17.

Sources said an announcement about the sale would be made by mid-September. Verbund and E.ON Ruhrgas, the gas unit of Germany’s largest utility E.ON, declined to comment.

Enerjisa officials could not immediately be reached for comment. Verbund co-owns Enerjisa with Sabancı Holding.

“Verbund cannot meet Sabancı’s aims to grow in energy. Verbund is taking very cautious steps because of problems in the eurozone. E.ON has wanted to enter Turkey for a long time,” said one source with knowledge of the talks.

Another source said that talks continue and the new partnership will be announced in one to two months, adding that it would be a strategic partnership.

“There have been talks between E.ON and Verbund about an asset swap. E.ON could give up assets in hydro power stations to Verbund. It could be hydro power stations along the river Inn,” said a different source.

‘E.ON eyes Turkey’

“In return E.ON would then get assets from Verbund in Turkey. E.ON is looking for joint ventures in Turkey. It could be a minority stake,” he said.

“For an official announcement they have to reach a certain stage, which will not take very long. If there aren’t any major obstacles, after the [Ramadan] Eid al-Fitr holiday, they will make the first official announcement,” said a third source.

Verbund said last month it expects a bigger drop in earnings this year than analysts had anticipated, and said it might not meet its targets if the European economy deteriorated further.

On the other hand, cheaper gas supplies helped boost profit in the first half of the year at E.ON, signalling the worst could be over for Germany’s biggest power company, whose earnings were ravaged last year by the government’s decision to exit nuclear power.

Enerjisa aims to reach a minimum 10 percent market share with a minimum capacity of 5,000 MW in the Turkish power market by 2015, according to its web site. It has a generation capacity of around 1,650 MW after acquiring electricity distribution company Baskent in 2009.

The firm said last year it had dropped a plan to buy a power distribution network in Istanbul after its partner Verbund backed down from the investment because of ongoing economic problems in Europe.
E.ON has long been looking into potential options to enter the Turkish energy market. Talks between E.ON and Turkey’s Doğuş Holding regarding co-operation in energy sector failed to yield an agreement, sources told Reuters in June.