Power distribution company privatized

ANKARA - Anatolia News Agency

Finance Minister Mehmet Şimşek (3 L) and Energy Minister Taner Yıldız (4 L) attend the signature ceremony for Gediz Elektrik’s share transfer contract. AA photo

The privatization of Gediz Elektrik, the power distribution company for the western provinces of İzmir and Manisa, was completed at a signature ceremony on June 14 as private sector’s part in the distribution sector has reached 76 percent.

The Elsan-Tümaş-Karaçay Joint Venture Group, controlled by Bereket Energy, has bought Gediz Elektrik with an offer of $1.23 billion. The Energy Market Regulatory Authority’s (EPDK) head, Hasan Köktaş, said Bereket Energy would make around $270 million of annual investment in the region, which allows 120,000 immigrants every year. Köktaş also said the company would invest in a smart grid for uninterrupted distribution. The company, which also does distribution in the western provinces of Aydın, Denizli and Muğla, has acquired 9 percent of the distribution in Turkey. Gediz Elektrik has 2.4 million subscribers.

Bereket chairman Ceyhan Saldanlı said they would need around $2 billion financing, which includes $1.23 billion transfer amount, investment needs for five years and credit for operation. Saldanlı said they provided the financing from Turkish banks.

As this is the 13th privatization of a distribution company, Finance Minister Mehmet Şimşek said 75 percent of the power distribution companies had been transferred to the private sector. “I am looking forward to reaching 100 percent,” he said.

‘Privatization Authority should be restructured’

However, Şimşek said the portfolio had shrunk in the privatization. “We should transform the Privatization Authority into a public-private sector partnership (PPP), which would be an expert unit in the framework of public-private investments.” The minister said they were working on the National Lottery (Milli Piyango) and they would complete its privatization this year. “After privatization of some harbors and electricity generation only a secondary public offering of some companies will remain. It means the portfolio is getting smaller. I believe that a restructure of the Privatization Authority will be needed in advance,” he said.

On June 13 the privatization of Turkey’s second largest natural gas grid, Başkentgaz, was completed.
Food company Torunlar Gıda’s subsidiary, Torunlar Energy, bought Başkent Doğalgaz with a $1.16 million offer.