Turkey's Alarko Announces $3 billion Investment Plans in Power and Energy Arena

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Turkey's Alarko Holding A.S. (IST:ALARK) (Istanbul, Turkey), an arm of the larger Alarko Group (Istanbul), recently announced plans for a big-ticket investment of $2.5 billion to $3 billion in electricity generation in the period leading up to 2015. This includes plans to set up a hydroelectric power plant in the city of Adana, in Turkey's south-central Anatolia province, at an investment of $130 million to $150 million.

Ayhan Yavrucu, the general co-ordinator of the Alarko Group, told reporters that the company is actively seeking partnerships with interested parties abroad. "We have been holding talks with European, American and Far Eastern companies," he said.

The company's plans are strongly backed by investments made last year. Yavrucu said that Alarko Holding had invested $40 million on electricity generation and $440 million on power distribution in 2009.

Alarko Holding was founded in 1954, and it began by executing manufacturing contracts and installing heating devices. It now acts as a holding company for six business divisions, of which the Energy Group's various power plants spread across Turkey concentrate on the production and distribution of electricity and natural gas.

Altek A.S., Alarko Holding's energy arm, operates four power projects in Turkey in the northwestern regions of Kirklareli, Hasanlar, Tohma and Berdan. In 2007, Alarko said that it planned to develop four electric power plant projects to expand Altek's capacity. This included a 100% increase in capacity of the Kirklareli plant, to bring the plant's total performing capacity up to 170 megawatts (MW) from the current 85 MW.

The company also planned to set up a greenfield plant in Seitomer, West Turkey, and at the time was scouting for land for another new plant to generate 500 MW to 1,000 MW of power by 2010.

Meanwhile, Altek is very keen on obtaining rights in Turkey's imminent electricity grid sell-off. In August 2006, Turkey's Energy Market Regulation Board (EPDK) approved the privatization process of 20 of the country's regional electricity grids. The country, which relies heavily on natural gas- and coal-fired thermal, as well as hydroelectric power for electricity, has been looking to the privatization as one of the options to resolve the prevailing power market issues.

In early March, Turkey made some headway with the process. The country's Privatization Administration announced an outline of the portfolio of the power grids to be sold. In mid-March, Finance Minister Mehmet Simsek said that the tendering process for the grid sale had been initiated, adding that the government ultimately plans to privatize all grids in the country.

Meanwhile, the country's power plans received a major boost on 10 March, when Turkey's ELEKTRIK ÜRETIM A.S. (EUAS) signed a deal with South Korea's integrated electric utility company Korea Electric Power Corporation (NYSE:KEP) (KEPCO) (Seoul, South Korea) to set up a 5,600-MW plant, with four nuclear reactors, in the northern province of Sinop near the Black Sea. Both companies are state-owned.

Taner Yildiz, the Turkish Energy and Natural Resources Minister, was very optimistic about working with South Korea, which is a country with a well-known presence in the global nuclear energy sector. He stated that by 2020, nuclear energy would be responsible for nearly 10% of Turkey's total energy production. This would mean almost 10,000 MW of energy accounted for by the two nuclear power plants in the offing: one in Sinop, and the other in the southern Turkish region of Akkuyu.

Turkey recently announced its five-year strategic energy plan, under which the country will increase power generation from local domestic resources, increase its supplier base for natural gas and begin construction of its first nuclear power plant by 2014. The country also plans to set up various additional coal-based thermal power and hydroelectric plants nationwide by 2013. The total capacity of the planned greenfield plants is pegged at 8,500 MW. According to the strategy, Turkey also plans to raise the renewable energy resources contribution to 30% of the total energy generation by 2023.

Lastly, but most importantly, the Turkish government is working toward increasing energy efficiency, and according to the prevailing plans, Turkey will save 10% energy in 2015 and up to 20% in 2023.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.