€45 million loan for construction of the largest wind farm in the country

By EBRD  Press Office

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In its first project in Turkey since the country became an EBRD country of operations in September 2008, the Bank is providing a €45 million loan for the construction of the largest wind farm in the country. The project will help Turkey promote clean energy and reduce its dependency on imported fuel sources.

The EBRD financing will be used for the construction and development of a 135-megawatt on-shore independent wind farm, which will be located in Osmaniye, in southern Turkey. The wind farm is being developed by Rotor Elektrik, a company incorporated in Turkey, a member of Zorlu Energy Group and owned by Zorlu Holding, one of the largest conglomerates in Turkey.

The farm is expected to become operational by the end of 2009 and will be Turkey’s largest wind farm, consisting of 54 wind turbines. It will significantly boost Turkey’s current installed wind generation capacity of around 500 megawatts, increasing it by around 30 percent.

The project is co-financed with the IFC, a member of the World Bank Group, which is providing €55 million towards the overall cost of the project, and EIB, which is providing €30 million, with guarantees from HSBC plc and DenizBank A.S.

EBRD First Vice-President Varel Freeman said: “With this first project in the country, the EBRD is delivering on its pledge to promote energy efficiency and renewable energy in Turkey’s regions. Future EBRD investments will continue to focus on increasing the availability of risk capital and long-term financing, especially outside the main cities”.
“We are very ambitious in renewable energy projects, which will play an extremely important role in our counrys’s future and want to tender our thanks to IFC, EIB, EBRD, Denizbank and HSBC for partnering with us to develop the largest wind farm in Turkey,” said Murat Sungur Bursa, CEO of Zorlu Energy Group.

Turkey is the sixth largest electricity market in Europe, and one of the fastest growing globally. In order to meet growing electricity demand and diversify away from expensive, imported fuel sources, the Turkish authorities have made a strong push for increased electricity generation from renewable energy sources. Turkey is aiming to connect to the grid 10,000 megawatts of wind capacity alone by 2020. Currently, wind power comprises less than 0.5 percent of total electricity consumed.

This would be the first large scale wind project and the largest in Turkey developed on a project finance basis. In these challenging market conditions, when appetite for long-term project financing by commercial banks is significantly reduced, the EBRD’s support is crucial. The Bank’s participation will help set new environmental, health and safety standards for the industry and will make a significant contribution towards Turkey’s targets to increase the share of renewable energy in its energy mix.

Following the decision of the EBRD’s Board of Governors to accept Turkey as a recipient of EBRD investments, the EBRD pledged to support the further development of the Turkish economy by promoting growth of small businesses, supporting privatization and bringing private sector financing and know-how to the provision of public services.

About IFC:
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totalled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year. For more information, visit www.ifc.org

About Rotor Electric Power Production Inc:
Founded to build, operate and provide maintenance to wind farms as well as electricity, steam and heat production facilities based on all forms of renewable energy, and to sell produced electric power, heat and steam, Rotor was purchased by Zorlu Energy Group in 2007. For more information, visit www.zoren.com.tr

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