Turkey's Sabanci Holding Plans $1.61 Billion in Energy Investments in 2013

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Turkey's second-largest conglomerate, Sabanci Holding (ISE:SAHOL) (Istanbul, Turkey), which has interests in banking, manufacturing, energy and retail, is planning to increase its investments in Turkey's rapidly growing energy sector. Selahattin Hakman, president of the energy group in Sabanci Holding, said that the company plans to invest $1.61 billion in its energy businesses this year. In a press conference in Istanbul, Hakman said that Sabanci Holding wants to win a tender on the electricity grid and is taking interest in the privatization of Ayedas and Toroslar EDAS.

The privatization tenders for Ayedas, which is a power grid that operates in Asian side of Istanbul, and Toroslar EDAS are planned for February 19, 2013. Ayedas currently serves 2.3 million customers.

The company will enter the privatization tenders with its subsidiary firm Enerjisa, a venture with E.ON (PINK:EONGY) (Dusseldorf, Germany). The Turkish Competition Board allowed Verbund AG (OP:OEZVY) (Vienna, Austria) to perform an asset swap with E.ON in Enerjisa (Istanbul,Turkey), the 50:50 joint venture with Sabanci Holding, on January 29. For additional information, see January 29, 2013, article - Turkey Clears E.ON-Verbund Asset Swap in Enerjisa.

In 2008, Sabanci Holding won the operating rights of Ankara's energy grid company Baskent Elektrik Dagitim (BEDAS) until 2036 via Enerjisa, with a price of $1.2 billion. The transaction was finalized in January 2009. The company aims to increase the number of grid customers in Ankara to 6 million from 3.5 million. "We are also planning to complete the lignite-fired Tufanbeyli power plant facility from 2015, which will add 450 MW production capacity," Hakman said.

On January 27, Sabanci Holding Chairwoman Guler Sabanci said in an interview with Financial Times that the Holding wants to increase its share of the energy segment in the total net asset value to 15% from the current 9% level. "Energy is one of the keys to Turkey's future growth, and we see a lot of opportunities from this side of our business," Sabanci said.

Enerjisa, which had $2.13 billion of sales in 2011, has about 1,835 MW of generating capacity through its production unit Enerjisa Enerji Uretim AS. The company has 2,000 megawatts (MW) of capacity under construction and 1,500 MW under development, according to the company's website.

Enerjisa is planning for 8,000 MW of power capacity in Turkey by 2020 and a 10% share of the electricity generation market. The company plans to increase its generation capacity to 5,321 MW by 2017 from 1,835 MW at the end of 2012. Last year, Sabanci Holding announced it was preparing to go public for Enerjisa in 2014.

The Turkish government has privatized a large number of electricity grid companies through tenders. In early January, Turkish Finance Minister Mehmet Simsek said that the $2.4 billion income from privatization tenders was transferred to the Turkish Treasury. "This number is higher than the privatization income targets for 2013, which was settled at $2 billion for the year as a whole," Simsek said in a speech in Turkish Parliament on January 3.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info'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.