The European Bank for Reconstruction and Development (EBRD) has agreed to provide a dual-currency loan to Turkey’s electricity generation company Entek Elektrik Üretimi in order to acquire two state-owned hydropower plants Menzelet and Kılavuzlu.
Entek, a subsidiary of Turkey’s investment company Koç Holding, won the competitive privatisation tender and will receive $35m and the equivalent of $20m in Turkish Lira (YTL76.2m).
With the financial assistance of EBRD, Entek will be acquiring the 124MW Menzelet and 54MW Kılavuzlu hydropower plants located in Turkey’s south-east province Kahramanmaraş.
Established in 1995, Entek currently operates six hydroelectric power plants and a gas-fired plant.
Entek Elektrik CEO Bilal Tuğrul Kaya said: “In 2017, Entek had a total 244MW of installed capacity. With these two power plants, our installed capacity has almost doubled to 422MW.
“The privatisation of Menzelet and Kılavuzlu is the largest acquisition of hydropower plants by a domestic investor in Turkey. In the forthcoming period, we are planning to continue our investments by considering a balanced and diversified generation portfolio.”
The two hydropower plants will be supplying clean, renewable energy to the industrial installations as well as to a population of more than a million located in a Mediterranean region.
EBRD Turkey managing director Arvid Tuerkner said: “Privatisation is a key part of the Turkish government’s strategy to liberalise 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.”
The loan offered by EBRD is part of a dual-currency financing package of $260m (YTL1.5bn) to finance the acquisition.
Additional lenders for the financing package include Garantibank, İşbank, Akbank, Yapıkredi, Unicredit and ICBC Turkey.
EBRD has been promoting private companies participation in the Turkish energy sector, as well as encouraging the use of environmentally friendly sources of energy in the region.
Earlier in 2016, EBRD provided finance for privatising the Karacaoren hydropower plants, which had a combined capacity of 78MW.