Turkey's energy watchdog seizes control of Osmangazi power grid

ANKARA - Hürriyet Daily News

Turkey’s energy watchdog has seized control of the Osmangazi Electricity Distribution Grid on the grounds that it has been failing to fulfill its duties. REUTERS photo

Turkey’s energy watchdog has seized control of the Osmangazi Electricity Distribution Grid on the grounds that it has been failing to fulfill its duties.

The Energy Market Regulatory Authority (EPDK) decided to depose the chairman and the members of the company, which is the electricity supplier for the western provinces, and appoint replacements for the positions, the regulator said in a statement release Aug. 2.

The EPDK said private companies operating power grids should perform responsibly and act within the principles of providing quality service to consumers.

The Osmangazi power grid, which serves 1.4 million subscribers in the provinces of Afyonkarahisar, Bilecik, Eskişehir, Kütahya and Uşak, was taken over by Yıldızlar SSS in a $485 million privatization deal in 2010.

Yıldızlar Holding had said it secured $375 million of the acquisition cost in loans obtained from Akbank and that it had financed the remaining portion using its own assets.

Authorities told Reuters the company owed 180 million Turkish Liras in debt to the Turkish Electricity Trading and Contracting Company (TETAŞ).

The company made headlines last month when its failure to pay back a $450 million loan it obtained from state-owned lender Halkbank was brought all the way to Parliament.

According to reports, both ruling and opposition party deputies questioned Halkbank executives for providing the money to Yıldızlar, although the lender denied any allegations of wrongdoing in a stock exchange filing.

The government has been moving toward the privatization of the entire electricity distribution sector; only two grids, Toroslar and Vangölü, remain currently remain in the public sector but they are expected to be delivered to private interests within the next month.

Osmangazi is the first electricity distribution company seized by the government since the beginning of the government’s privatization wave.