Turkey - 2011 Promote renewable energy in Turkey

Promoting renewable energies in Turkey

PROPARCO, AFD’s private sector financing arm, has signed a €40m loan agreement with the Turkish power company EnerjiSA to finance the second phase of its investment program. The aim of this loan is to finance the construction of renewable energy infrastructure (a wind farm and two hydro power plants), as well as a gas-fired combined cycle power plant with a total installed capacity of 1,095 MW and a total cost of €1bn.

Project start-up: May 2010
Financing: €40m senior loan
Partners: ENERJISA POWER CORPORATION



 

 
 
 
Context
Turkey has a huge need to build new generating capacities in order to meet strong energy demand. The country’s electricity demand has been constantly rising for over twenty years now. The annual rate stood at 7.1% between 1992 and 2008 and reached a level of 120,000 GWh during the first seven months of 2010.
Turkish market opened up to private players. Although power transmission continues to come under a monopoly, distribution and generation are currently being opened up to competition. The government’s aim is to renew and extend its power fleet via private investments, while continuing to regulate prices in order to efficiently provide businesses and final consumers with cheap electricity. Following these reforms, the major Turkish conglomerates have diversified into the power sector, either independently or, in most cases, in partnership with experienced international operators. This has been the case for Sabanci in EnerjiSA.
 
Project objectives
To meet sharply growing energy demand. This requires sizeable investments in new generating capacities.
 
Increase the share of renewable energies in Turkey’s energy mix, which is still highly dependent on natural gas (33% of installed capacity and 48% of production in 2009).
 
EnerjiSA’s aim is to become the leader in Turkey’s power market by 2015, with a domestic market share of 10%, a capacity of 5 GW and 6 million customers.
 
Project description
EnerjiSA Power Corporation is a Turkish power company founded in 1996 and has been co-owned by the Turkish group Sabanci Holding and the Austrian public power group Verbund since 2007. EnerjiSA is implementing an extensive two-phase program for the construction of hydro and thermal power plants and wind farms.
 
Financing of phase 2 of EnerjiSA’s investment program, comprising the construction of four new power plants (a wind farm, two hydro power plants and a gas-fired combined cycle power plant), representing a total installed capacity of 1,095 MW for a total cost of €1bn.