Verbund, Sabancı advance in energy
Verbund, Austria’s biggest utility, and Turkish partner Sabanı Holding are planning to expand in Turkey by building power plants and buying distribution grids. In order to accopmlish its plans the venture was granted a 1-billion-euro ($1.6 billion) loan by the World Bank’s International Finance Corp., Akbank and WestLB. “Our goal is to buy at least one more large distribution large company or two mid-sized ones,” Sabancı Chief Executive Officer Ahmet Dördüncü said in an interview Tuesday. “We currently have 3 million customers, and we want to raise that to at least 6 million people.” Enerjisa, co-owned by Sabancı and Verbund, bid $1.23 billion to win a state tender July 1 for the Turkish capital Ankara’s electricity distribution grid, which has 2.9 million customers. The government is selling two more networks near the towns of Konya and Erzurum by Sept. 15. Verbund and Sabancı are seeking to tap demand for electricity that’s rising more than 8 percent a year in Turkey, the world’s second-fastest rate of growth after China. The government wants to reduce its role in energy and boost investment in the industry to prevent shortages in capacity as early as next year, according to the World Bank.
State-asset sales
The government may sell the 20 regional power grids it owns by early 2010, said Dördüncü. Enerjisa is also interested in bidding for power plants the state has promised to sell, he added. Istanbul-based Enerjisa’s planned capacity installation of 5,000 megawatts by 2015 from the current 455 megawatts is a “very conservative estimate,” Verbund CEO Michael Pistauer said in a separate interview Tuesday. “Investment decisions and government approvals are moving much faster here than in West Europe as the country needs much more energy assets,” Pistauer said. Verbund plans to see “profit contributions” from about 2014 as currently planned power plants will go on stream in 2010, he said. The company is also considering exporting power to countries such as Greece, Iraq or Syria at a later point as generation expands, Pistauer said. Enerjisa “can finance all the projects we are planning” and may sell shares, he said. Sabancı aims to earn as much as 15 percent of its revenue from energy by 2015, Dördüncü said at a press conference earlier today. Its energy division currently has annual sales of about YTL 6300 million ($246 million), he said. Sabancı, which also has interests in finance, retail and tire making, had total sales of YTL 19.3 billion last year.
Expansion
Verbund has been expanding in countries such as Germany, Italy and France where power prices are higher than in its domestic market. Austria’s biggest company by market value is now turning to the Balkans and Turkey, where demand growth is outpacing increases in Austria and its neighbors. The company is also considering constructing power plants in Serbia, Bosnia-Herzegovina, Bulgaria and Romania and wants to cooperate with Austrian rival EVN AG in selling power to households and companies in the Balkans. Verbund’s net profit almost tripled over the past five years to 579.2 million euros in 2007 as the company benefited from rising power prices in Europe and production costs remained stable. The company operates 116 power plants, and about 85 percent of its production comes from hydropower plants that are cheaper to operate than coal- or gas-fired plants. The company won’t bid with Sabancı Holding for a license to build and operate Turkey’s first nuclear power plant, Dördüncü said. Sabancı is in talks with foreign nuclear-energy companies to bid for the license. The deadline for bids is September.
source: Turkish Daily News
Tags: Energy tenders Turkey