EnerjiSA's Power Projects Herald Turkey's Push for Hydroelectric Power

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Researched by Industrial Info Resources (Sugar Land, Texas)--Following the announcement by the Turkish Environment Minister Veysel Eroglu that hydroelectric power stations with a total capacity of 16,500 megawatts (MW) would be built in the next five years, a Turkish-Austrian partnership announced that it had secured finance to create the generation of 12,000 gigawatt hours of electricity per year. The company will build 10 hydropower plants in the Seyhan, Ceyhan and Cambasi basins, plus a 920-MW gas-fed plant in Bandirma. The total generating capacity of the plants in this first phase will be 1,920 MW.

EnerjiSA, a company jointly held by Turkey's Sabanci Holding (Istanbul) and Austria's Verbund AG (WBAG:VER) (Vienna), has raised $1.6 billion for the first phase of the power investment program. Sabanci, an industrial conglomerate, has a market capitalization of $12 billion and is 75% owned by the Sabanci family. Verbund (Vienna, Austria) has a capitalization of $12.6 billion and controls a total power-generating capacity of 9,300 MW through 116 power plants in Europe. The finance package was arranged by the World Bank's International Finance Corporation, Akbank and West LB AG.

In early July, the partners also made the top bid of $1.23 billion to acquire 100% of Baskent Elektrik, the operator of the power distribution grid in the region around the country's capital, Ankara. Baskent supplied 10 terawatt-hours to about 3 million customers in 2007. The distribution operation accounts for about 9% of Turkish electricity sales and in 2007 generated sales of $1.1 billion.

EnerjiSA has targeted a 10% share of the Turkish electricity market by 2015 to become the largest independent supplier with an installed capacity of 5,000 MW. The company has a current capacity of 455 MW. Activities in the power sector will develop a vertically integrated structure covering generation, distribution and supply and wholesale trading of electricity in Turkey. The country has an average GDP growth rate of 8% and the government is actively promoting infrastructure investments to debottleneck future growth potential.

Eroglu said that the hydropower generators would be built by non-government companies with a total investment of about $25 billion. Currently 83% of Turkey's power is generated by state-controlled units. The Finance Ministry says that obstacles to the liberalization and investment in the energy industry by local and international companies would be removed.

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