Turkey looking for adviser to sell power utility

ISTANBUL/ANKARA (Reuters) – Turkey’s sell-off agency has started seeking advisers for the privatization of major electricity generation company EUAS, a privatization official and sources familiar with the situation said yesterday. After several delays, Turkey has stepped up the pace of privatizations, with an initial public offering for former fixed-line monopoly Turk Telekom this month and the launch of tenders for four electricity distribution grids. Faced with a slowdown in foreign direct investment amid a global credit crunch, Ankara needs privatization income to finance a current account deficit swollen by the price of oil and estimated at $50 billion this year. The sources said the Privatization Administration (PA) had set a May 26 deadline for banks to hand in their bids to help the government devise a strategy for EUAS’s privatization. The PA would choose an adviser in the first week of June, the official said. EUAS is expected to be sold in parts. Overall, it has 15 thermal power plants with capacity of 9,000 megawatts and 107 hydroelectric power plants with capacity of 11,000 MW, according to information on its website. As of the end of 2004, it generated 43 percent of electricity in Turkey. EUAS is not officially part of the PA’s sell-off portfolio but PA Chairman Metin Kilci said last month it planned to open a bidding process to find advisers. With a fast-growing population of over 70 million and growing demand for energy, European Union candidate country Turkey is seen as an attractive market for foreign investors. Several foreign energy companies have entered partnerships in Turkey and plan to bid in privatizations in the sector. Companies which have pre-qualified to bid in the privatization of the first two power grids going on sale include German Energie Baden-Wurttemberg, E.ON and Spanish Iberdrola.