Turkey’s Electricity Sector Program Receives World Bank Support

2009/06/12

ANKARA, June 11, 2009 – The World Bank Board of Executive Directors today approved the First Programmatic Electricity Sector Development Policy Loan (PEDPL 1) for Turkey in the amount of Euro 548.4 million (US$800 million equivalent).

The loan supports the implementation of Turkey ’s updated national electricity strategy and its ongoing program to reform the electricity sector. The program as a whole is designed to meet Turkey’s growing electricity demand in an efficient and sustainable manner. Its specific objectives, which the loan supports, are to improve sustainable electricity supply security; ensure financial viability of the electricity sector; improve operational efficiency and the conditions for attracting enhanced private investments; and improve energy efficiency in the supply and consumption of electricity in Turkey .

“The Bank is very happy to support Turkey ’s program in the energy sector. The policies and reforms that this loan supports will help ensure an adequate and reliable supply of electricity, efficiently provided to consumers at a reasonable cost. They will contribute to sustained economic growth and employment generation in the long term,said Ulrich Zachau, World Bank Country Director for Turkey . “This loan follows the World Bank’s approval two weeks ago of the Private Sector Renewable Energy and Energy Efficiency Loan, which will help Turkey simultaneously enhance its energy security, promote clean energy, mitigate climate change, and increase private sector involvement.”

The efficient and economic supply and consumption of electricity will be critical for the future competitiveness and robust growth of the Turkish economy. Under the program, measures to improve operational efficiency and conditions for private investment, such as the privatization of distribution companies and generation plants, will encourage local private investment as well as foreign direct investment inflows. This in turn will increase competition and supply capacity, while containing external debt accumulation.

This is a Euro-denominated Commitment-Linked flexible Loan with a Variable Spread. The final maturity of the Loan is 23.5 years, including a 12 year Grace Period and customized repayment of principal.

source: WorldbanK NewsRelease

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