Privatization project in the Turkish electricity market

1/28/2009Wien

Verbund CEO Wolfgang Anzengruber and his Turkish partner Sabanci, represented by Selahattin Hakman, CEO of the Sabanci Energy Group and, at the same time, CEO of their joint venture Enerjisa, have today undersigned the purchase contract with the Turkish government for distribution grid company Baskent EDAS in Ankara.

The purchase price amounts to USD 1,225 million. This wraps up the so far largest privatization project in the Turkish energy market, which is to be fully liberalized by 2011. By 2012, Verbund and Sabanci Baskent are planning to make Baskent one of the leading distribution grid companies in Turkey.

In July 2008, the Turkish privatization authority selected the bidding consortium Verbund/Sabanci/Enerjisa as best bidder for the purchase of Baskent EDAS, the regional electricity distributor in the Ankara region. With today’s signing of the contract, the three partners are taking over 100 % of the company for a period of thirty years.

"The acquisition of Baskent EDAS is definitely a quantum leap for our activities in Turkey. For us to do well economically in a partially liberalized growth market like Turkey, it makes sense to cover generation and transmission in what is referred to as a vertically integrated business model. By way of comparison, what we are acquiring today equals the entire Austrian end-customer market", Verbund CEO Anzengruber pointed out.

The Baskent region around Ankara with a population of 6.3 million extends from the Black Sea all the way to the Anatolian Mountains and is one of the largest regions in Turkey. Already now, Baskent EDAS supplies electricity to around 3 million end-customers in the region. For comparison: Austria with around 8.3 million inhabitants has a total of 4 million electricity customers. Due to its political and economical significance, the Baskent region will continue to have a strong growth potential.

In 2007, Baskent EDAS with around 2,900 permanent and another 2,000 temporary employees generated sales of YTL 1.2 billion (USD 945 million), claiming a market share of 9 % in the entire Turkish end-customer market.   
With a distribution loss rate of 8.7 %, the distribution grid operator is only slightly above the OECD average of 7 % and very clearly below the Turkish average of 15 %. By 2012, Baskent EDAS is to be made one of the leading distribution grid companies in Turkey. Besides high profitability, Verbund and Sabanci attach great importance to employee and customer satisfaction. Dipl.-Ing. Dr. Gerhard Neubauer, until now Chief Technology Officer at STEWEAG-STEG, will be taking over financial management.

The partners Sabanci and Verbund work together on the further development of electricity generation, supply and transmission, as well as electricity sales in Turkey. Their joint venture Enerjisa is aiming at a market share of at least 10 % - and thus leadership - in the Turkish electricity market by 2015. Energjisa’s target portfolio provides for an installed plant capacity of 5,000 MW by 2015. For comparison: Verbund’s entire power plant potential in Austria comprises 7,000 MW.