Involvement in promising Turkish electricity market

15.03.2007Wien

The VERBUND Supervisory Board yesterday (March 14, 2007) gave the "green light" for the comprehensive involvement of Austria's leading utility in the Turkish market: VERBUND is entering into an exclusive joint venture in this highly attractive growth market with Sabanci, Turkey's leading financial and industrial holding.

The jointly-owned generation company "EnerjiSA", in which VERBUND will hold a share of almost 50 %, aims to have an installed output of 5,000 megawatt (MW) by 2015.  Together, the partners should achieve a share of at least 10 % in the Turkish electricity market.

The Turkish electricity market, which will be deregulated successively in the next years, is one of the strongest growth markets worldwide. Over the last 10 years, electricity consumption has increased by 6.5 % per annum. Electricity consumption in Turkey is expected to quadruple by 2020. As a result, new power plant capacities of 60,000 MW are needed. This is more than three times the total capacity of all the power plants in Austria. Parallel to this, just over one-third of the total hydropower potential in Turkey is currently being used.

VERBUND and Sabanci each hold a 49.99 % interest in EnerjiSA. VERBUND's shareholding will be equal to Sabanci's shareholding in the company, ensuring full joint control over the operations by the two partners. The initial investment volume for VERBUND totals USD 326 million.

VERBUND and Sabanci have set ambitious targets: Hydropower, gas, coal and wind power plants with a combined output of 5,000 MW should be constructed by 2015. EnerjiSA already operates gas power plants with a total generation capacity of 370 MW. Moreover, it holds hydropower licenses for 268 MW has a brown coal field with a generation capacity of 450 MW. The partners are keen to acquire further hydropower options.

Depending on the degree of deregulation in the Turkish electricity market, EnerjiSA also aims to purchase electricity distribution grids and participate in the end customer segment.

The cooperation with the Sabanci-Holding offers VERBUND exclusivity in the promising Turkish market: The Sabanci-Holding, which is owned to 75 % by the Sabanci-family, is one of the largest financial and industrial conglomerates in Turkey with 45,000 employees and a balance sheet total of USD 46 billion.