ECONOMY

Turkey may face power crisis

Turkey may face a «crisis» in meeting power needs because investments have failed to keep pace with increased demand, said Selahattin Hakman, head of Haci Omer Sabanci Holding AS’s energy unit. Electricity demand grew 10 percent in the first quarter and may slow to 8 percent by the end of the year if growth wanes amid concerns over political instability, Hakman told CNBC-e. A prosecutor is suing to disband the government for allegedly undermining Turkey’s secular order. «In the last five or six years, Turkey hasn’t completed any large-scale energy investments so it’s facing a very serious threat in terms of its ability to provide the power needed,» said Hakman, head of Enerjisa Enerji Uretim AS, which is also co-owned by Austrian utility Verbund. «Even if we slow economic growth it won’t be possible to avoid this crisis.» Turkey’s government controls 85 percent of the power market and has kept electricity prices largely unchanged since 2002 to rein in inflation, even as oil and natural gas prices soared. The price caps have deterred investors and the state must also accelerate sales of its energy businesses to create market conditions that will attract investment, he said. «The increasing demand is very attractive to foreign investors, but instability and uncertainties at the very least are delaying foreigners from investing,» he said. Enerjisa may expand outside of Turkey once it gains greater market share at home, he said. It’s investing $6.5 billion by 2015 in power generation in Turkey. It’s also planning to bid for the country’s first nuclear license and may buy one or more of the state distribution grids the government plans to sell. (Bloomberg)