Turkish banks give further assistance to energy projects
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Anatolia News Agency
Oluşturulma Tarihi: Mart 18, 2009 00:00
ISTANBUL - Turkish banks are providing funding for energy projects by dipping into their own resources as well as the resources of the World Bank, European Investment Bank, development agencies and foreign lenders. They also utilize the resources of financial institutions and funds, as demand for energy surges throughout the country
Turkish banks have begun to weigh in when it comes to providing funding for the rising number of investments in Turkey’s energy industry.
As demand in the industry surged, local banks cranked up the amount of support they have been providing for the energy projects. The industry was supplied with funding worth billions of dollars within the past five years.
The energy industry in Turkey will require an investment of nearly $130 billion until 2010 in order to maintain healthy growth, according to some experts. The energy demand in the country is rising in line with its economic growth. Rising demand deems energy very attractive for local and foreign companies that are seeking investment opportunities. The increasing interest to invest in the industry generates a much bigger need and demand for funding.
Turkish banks provide funding for energy projects by dipping into their own resources as well as the resources of the World Bank, European Investment Bank, development agencies and banks. They also utilize the resources of financial institutions and funds.
Investment projects for renewable energy, including hydro, geothermal, solar and wind stations, have placed themselves among the most funded areas in the past years, as environmental consciousness began to rise.
Garanti Bank, the Turkish lender co-owned by General Electric, have so far provided loans worth $1.5 billion for energy, which is the industry foreseen to survive the crisis with minimum impact. The bank has also been authorized to find financing for projects worth $500 million.
Meanwhile, officials of İşbank, Turkey's biggest publicly traded bank, have announced the bank’s decision to increase the amount of support it has been providing for energy projects due to the rising demand. Although it is easier to obtain loans for hydroelectric plants at present, the wind energy investments in Turkey have also been rising significantly, according to İşbank officials. Turkey ranks on top among other European countries with its wind energy technical potential, which is estimated to be around 10,000 megawatts.
Many energy investors have knocked on İşbank’s door, according to bank officials, who revealed that the bank has financed 21 renewable energy-based projects to date. The total financing İşbank provided in renewable energy reached nearly $790 million, they said. Considering the projects that are currently undergoing the evaluation process that figure is expected to surpass $1 billion.
Required investment
According to energy market experts, Turkey requires an investment of $105 billion in electricity only. The total amount of investment required by the entire energy industry until 2020 totals to $130 billion, they said.
Within the last two years, Yapı Kredi has allocated loans worth nearly $1.3 billion for energy projects. The Turkish bank co-owned by Italy's UniCredit SpA provided financing for an installed capacity of 2,500 megawatts, said Mert Güvenen, a member of the Yapı Kredi executive board.
Meanwhile, state-owned Vakıfbank helped realize 15 energy projects worth $324 million as of the end of December 2008. Among the bank’s energy projects, renewable energy consists of 65 percent while co-generation covers 35 percent, the bank’s authorities said. The bank’s project financing department is currently assessing 20 energy projects estimated to be worth around $600 million, they said. But they also warned that the loans provided for the energy projects would be affected by the crisis.
Halkbank, another state-owned bank, is evaluating 21 hydroelectric plant projects that are estimated to be worth a whopping $190 million euros. Ömer Baktır, vice managing director at the state-controlled lender, said that the bank is expecting a decline in foreign energy investments due to the global crisis. However, the financing needs of the companies investing, particularly in renewable energy, will continue to increase. "Mergers and acquisitions will also continue in the upcoming period, so banks will continue to see high demand in financing."
The Energy Market Regulatory Agency, or EPDK, has recently begun to play a more active role in the industry. Also, companies that are part of Turkey’s private sector have become more and more interested in the industry. They have been playing a more active role in tenders for licenses to establish or run power plants in the country. The partnerships established between global energy giants and large Turkish firms also constitute the source of attraction for the financing of the sector, according to Cem Mengi, vice managing director at Akbank.
"Akbank’s corporate banking department has financed 31 energy projects É with an investment volume of $6.4 billion. Akbank provided loans worth $2.1 billion for these projects," he said, adding that the bank is also planning to provide $300 million in loans for a 610-megawatt hydroelectric power plant project.
Denizbank has so far provided $400 million in loans for the energy sector, including project funding as well as corporate loans, said Denizbank Project Funding Department Manager Ceyda Çetin Erten. The bank currently works together with other banks on two large-scale energy projects worth $1 billion, which are likely to be completed this year, Erten said.
The Industrial Development Bank of Turkey, or TSKB, has evaluated 130 projects since 2005, and financed 71 projects with an investment volume of $2.5 billion euros, said Burak Akgüç, vice managing director at TSKB.
As demand in the industry surged, local banks cranked up the amount of support they have been providing for the energy projects. The industry was supplied with funding worth billions of dollars within the past five years.
The energy industry in Turkey will require an investment of nearly $130 billion until 2010 in order to maintain healthy growth, according to some experts. The energy demand in the country is rising in line with its economic growth. Rising demand deems energy very attractive for local and foreign companies that are seeking investment opportunities. The increasing interest to invest in the industry generates a much bigger need and demand for funding.
Turkish banks provide funding for energy projects by dipping into their own resources as well as the resources of the World Bank, European Investment Bank, development agencies and banks. They also utilize the resources of financial institutions and funds.
Investment projects for renewable energy, including hydro, geothermal, solar and wind stations, have placed themselves among the most funded areas in the past years, as environmental consciousness began to rise.
Garanti Bank, the Turkish lender co-owned by General Electric, have so far provided loans worth $1.5 billion for energy, which is the industry foreseen to survive the crisis with minimum impact. The bank has also been authorized to find financing for projects worth $500 million.
Meanwhile, officials of İşbank, Turkey's biggest publicly traded bank, have announced the bank’s decision to increase the amount of support it has been providing for energy projects due to the rising demand. Although it is easier to obtain loans for hydroelectric plants at present, the wind energy investments in Turkey have also been rising significantly, according to İşbank officials. Turkey ranks on top among other European countries with its wind energy technical potential, which is estimated to be around 10,000 megawatts.
Many energy investors have knocked on İşbank’s door, according to bank officials, who revealed that the bank has financed 21 renewable energy-based projects to date. The total financing İşbank provided in renewable energy reached nearly $790 million, they said. Considering the projects that are currently undergoing the evaluation process that figure is expected to surpass $1 billion.
Required investment
According to energy market experts, Turkey requires an investment of $105 billion in electricity only. The total amount of investment required by the entire energy industry until 2020 totals to $130 billion, they said.
Within the last two years, Yapı Kredi has allocated loans worth nearly $1.3 billion for energy projects. The Turkish bank co-owned by Italy's UniCredit SpA provided financing for an installed capacity of 2,500 megawatts, said Mert Güvenen, a member of the Yapı Kredi executive board.
Meanwhile, state-owned Vakıfbank helped realize 15 energy projects worth $324 million as of the end of December 2008. Among the bank’s energy projects, renewable energy consists of 65 percent while co-generation covers 35 percent, the bank’s authorities said. The bank’s project financing department is currently assessing 20 energy projects estimated to be worth around $600 million, they said. But they also warned that the loans provided for the energy projects would be affected by the crisis.
Halkbank, another state-owned bank, is evaluating 21 hydroelectric plant projects that are estimated to be worth a whopping $190 million euros. Ömer Baktır, vice managing director at the state-controlled lender, said that the bank is expecting a decline in foreign energy investments due to the global crisis. However, the financing needs of the companies investing, particularly in renewable energy, will continue to increase. "Mergers and acquisitions will also continue in the upcoming period, so banks will continue to see high demand in financing."
The Energy Market Regulatory Agency, or EPDK, has recently begun to play a more active role in the industry. Also, companies that are part of Turkey’s private sector have become more and more interested in the industry. They have been playing a more active role in tenders for licenses to establish or run power plants in the country. The partnerships established between global energy giants and large Turkish firms also constitute the source of attraction for the financing of the sector, according to Cem Mengi, vice managing director at Akbank.
"Akbank’s corporate banking department has financed 31 energy projects É with an investment volume of $6.4 billion. Akbank provided loans worth $2.1 billion for these projects," he said, adding that the bank is also planning to provide $300 million in loans for a 610-megawatt hydroelectric power plant project.
Denizbank has so far provided $400 million in loans for the energy sector, including project funding as well as corporate loans, said Denizbank Project Funding Department Manager Ceyda Çetin Erten. The bank currently works together with other banks on two large-scale energy projects worth $1 billion, which are likely to be completed this year, Erten said.
The Industrial Development Bank of Turkey, or TSKB, has evaluated 130 projects since 2005, and financed 71 projects with an investment volume of $2.5 billion euros, said Burak Akgüç, vice managing director at TSKB.