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EBRD Provides Loan to Aid in Privatization of Turkish Hydropower Plants

The European Bank for Reconstruction and Development is supporting the privatization of state-owned power plants in Turkey with a $55 million dual-currency loan ($ 35 million in US dollars and the equivalent of $20 million in Turkish lira (TRY)) to a subsidiary of Koç Holding.
EBRD Provides Loan to Aid in Privatization of Turkish Hydropower Plants
Courtesy EBRD

Entek Elektrik Üretimi A.Ş, the winning bidder of a competitive privatization tender, is acquiring two hydropower plants in Kahramanmaraş province in Turkey; Menzelet, with 124 MW capacity, and Kılavuzlu, with 54 MW. The plants supply clean, renewable energy to a Mediterranean area with a population of more than a million and important industrial installations.

The EBRD’s loan is part of a dual-currency financing package of TRY 1.05 billion, equivalent to around $260 million, to finance the acquisition. Other lenders include Garantibank, İşbank, Akbank, Yapıkredi, Unicredit and ICBC Turkey.

Arvid Tuerkner, EBRD Managing Director for Turkey, said, “Privatization is a key part of the Turkish government's strategy to liberalize the country’s energy sector. Our investment supports the goal of increasing the participation of private suppliers in power generation and reinforces the role of renewable energy in the sector.”

Entek began investments in 1995 and operates six hydroelectric power plants and a gas-fired power plant.

Yağız Eyüboğlu, Chairman of Koç Holding Energy Group, commented, “Taking over the operating rights of these two hydroelectric power plants in Kahramanmaraş is an important step for the Koç Group’s vision of growing in sustainable and renewable energy.”

The EBRD previously financed the privatization of the Karacaoren hydropower plants, with a combined capacity of 78 MW and located in Burdur, Turkey, by energy company Gama Enerji.

Encouraging greater private sector participation in the energy sector and promoting the use of more environmentally friendly sources of energy is a priority for the EBRD in Turkey. Almost half of its projects in the country contribute to financing sustainable energy.

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