ECONOMY

Iberdrola in Turkish power deal

ISTANBUL (Reuters) – Turkey’s Turcas and Spain’s Iberdrola plan to bid in Ankara’s power privatization, while Turcas’s fuel retail venture with Royal Dutch Shell aims to be market leader by 2008, officials said. Turcas Chairman Erdal Aksoy said yesterday Spain’s second-biggest utility Iberdrola would take a 70 percent stake in a joint venture to bid in the privatization, while smaller Turcas would hold 30 percent. «With a 30-70 partnership with Spain’s Iberdrola, we plan to bid firstly for the important distribution regions and then for one or two production facilities,» Aksoy told Reuters after an extraordinary general meeting. He said the entire sell-off would be worth $3-4 billion. An Iberdrola source said the firm was involved in the privatization process but said it was too early to give figures. Iberdrola is also partnering Turkey’s Calik Enerji for the sell-off, the source said. Turkey said earlier this month it was trying to prepare the power privatization tenders this month, which aim to liberalize the market through the sale of 20 distribution grids. Turkish energy demand is expected to grow amid robust economic expansion. Gross national product in Turkey, which has attracted large foreign investment flows in recent years, grew almost 8 percent last year and the government has said it expects 5 percent for this year. Investors from Russia, Italy and Belgium have also expressed interest in the power privatization, one of several sell-offs backed by Turkey’s major creditor the International Monetary Fund. Turcas has launched a retailing joint venture with the Turkish unit of oil giant Royal Dutch Shell Plc, also split 70-30 with the larger stake held by Shell. George Spanoudis, chairman of the new firm Shell & Turcas, told a news conference, «In 2008, we aim to be number one in the petroleum products and lube oil market.» The firm had sales of around $6 billion in 2005, in pro forma terms. Turcas’s Aksoy said yesterday the joint venture had a book value of 528 million lira (262 million euros). Shell now has a 16 percent share of the petroleum products market while Turcas has a 7 percent share. But Shell is leader of the unleaded market with a 24 percent slice.