A US$ 1 billion combined-cycle gas turbine power plant will be built in Turkey near the city of Kirikkale in Central Anatolia, some 50 km east of Ankara, with a comprehensive long-term financing package arranged by the European Bank for Reconstruction and Development (EBRD). It is the largest investment in the country in recent years.
The plant will be built by Acwa Guc Elektrik Isletme ve Yonetim Sanayi ve Ticaret A.S., a Turkish subsidiary of ACWA Power, an independent Saudi Arabian developer of power projects with a portfolio of 15,000 MW across investments in the Middle East, North Africa, Southern Africa and Turkey.
With a capacity of 950 MW, the project will be able to cover half the energy needs of a city the size of Ankara and will help meet Turkey's ever-growing demand for reliable energy.
The EBRD has played a key role in securing long-term financing for the construction of the new plant by arranging a syndicated loan of US$ 250 million: US$ 200 million for the EBRD's own account and US$50 million syndicated to Banque Saudi Fransi which in addition, is providing parallel financing of US$100 million under a murabaha Islamic financial instrument.
The International Finance Corporation (IFC) is also providing a syndicated loan of US$ 170 million, of which US$ 45 million is syndicated to the Korea Development Bank.
Korea Eximbank and Standard Chartered Bank, with cover from Korea Eximbank, are joining as parallel lenders with US$ 90 million and US$ 60 million respectively.
Highlighting the EBRD's leading role in arranging financing for the project, EBRD Director for Power and Energy Nandita Parshad said: "This is a landmark transaction for many reasons: it brings together international financial institutions and commercial banks to lend on similar terms; it offers the longest tenor to date - 16 years - for a power project in Turkey; it is also the first time in Turkey that an independent power producer is financed on a limited-recourse basis."
Paddy Padmanathan, President and CEO of ACWA Power, commented: "The Kirikkale power project, which when completed will be a highly competitive electricity generator, is the company's first investment in Turkey. It is a solid foundation for the multi-fuel power-generation portfolio we seek to establish in this thriving economy. The project represents yet another milestone in ACWA Power's market expansion beyond the countries of the Gulf Cooperation Council."
The state-of-the art gas-fired power plant will use a combined cycle in which the fuel - natural gas - is fed into a gas turbine that generates electricity, while the waste heat of the exhaust is captured to produce steam. This, in turn, drives a steam turbine which produces additional electricity, all for the same fuel input. The integration of these two thermodynamic cycles improves overall efficiency for electricity generation, significantly reducing fuel costs for each kWh of electricity produced.
As an independent power producer, the plant will operate on a merchant basis, selling the electricity it generates on the power market.
The power this plant will produce is expected to replace more carbon-intensive energy generation in Turkey and will lead to an annual CO2 emissions reduction of over 1,825,000 tonnes.
Investing in sustainable energy is a priority for the EBRD in Turkey. The Bank started operations in the country in 2009 and currently works from offices in Istanbul, Ankara and Gaziantep. To date, the EBRD has invested over 4 billion euros in the country with half of this dedicated to sustainable energy projects.