Ankara, April 13, 2006 – The World Bank, the Republic of Turkey and the Turkish Electricity Transmission Corporation (TEIAS) signed today the Agreements for Euro 125 Million (US$150 million equivalent) for the Second TEIAS Project to support the Third Phase of the US$1,000 million Energy Community of South East Europe Program (ECSEE). Country Director Andrew Vorkink signed the Loan Agreement on behalf of the Bank together with the Ilhami Özşahin, Chairman of the Board and General Manager of TEIAS and the Guarantee Agreement with Memduh Aslan Akçay Director General of External Economic Relations of the Undersecretariat of the Treasury. The countries of South East Europe (SEE) including Turkey and the European Union are cooperating to develop a regional energy market - the European Community of South East Europe (ESCEE), and integrate it into the internal energy market of the European Union1. The proposed Turkey ECSEE-3 will continue the Bank’s on-going support for the implementation of the internal market and regional integration by financing essential system investments. The Bank has a substantial engagement in Turkey’s energy sector and is also providing technical assistance to the Government on electricity issues, including advising on the reform process. Further, the Bank is currently supporting Turkey’s market implementation and network development initiatives through two ongoing operations: National Transmission Grid Project (NTGP) – supports the preparation of the balancing market and settlement regulations and the tender specifications for the Market Management System (MMS). Investments include the transmission and network infrastructure, including the Turkey-Greece interconnection. ECSEE-2 Project – supports investments in the MMS, regional control centers and associated transmission infrastructure.
The ECSEE-3 loan to TEIAS will assist TEIAS in: (a) strengthening and expanding the transmission network to reliably meet growing electricity demand; and (b) upgrading the transmission network in dense urban areas to minimize the risk to public safety posed by urban encroachment on existing overhead lines by replacing them with safer underground cables. The project will compose of two sub-components: Component 1 - Transmission Network Strengthening: This component entails construction of new substations and a new 380 kV underground cable to strengthen the transmission networks in Istanbul and Izmir. The new substations and underground cable will increase the capacity of the transmission networks in the cities and are necessary to meet the new and growing electricity demand in their local areas. Component 2 - Urban Transmission Network Upgrading: This component involves construction of underground cables to replace existing 154 kV overhead transmission lines in densely populated areas of Istanbul and Izmir where urban expansion has resulted in unsafe sections of overhead lines passing over roofs of houses and right-of-ways which have been lost to encroachment by streets and buildings.
 “The signing of the ECSEE-3 loan to Turkey is an important recognition of the steps that Turkey has taken to initiate the liberalization of its electricity market and the integration with the regional market of South Eastern Europe. This loan aims to increase the safety, reliability, efficiency and capacity of the bulk power transmission system in Turkey and to improve market access for consumers and suppliers of electricity.” said Andrew Vorkink, Country Director for Turkey. “As the largest player in the South Eastern European market, Turkey continues to set the pace of electricity market development in the region. The World Bank is pleased to continue supporting Turkey in implementing and achieving market liberalization and regional market integration through this loan, which will also assist it on its accession path to the EU.”
ECSEE is a regional program and the Bank investment support is being provided on a regional basis using the adaptable program lending (APL) instrument, horizontally to support ECSEE’s Regional Members (Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Macedonia, Romania, Serbia and Montenegro, Turkey and Kosovo). 1 The governments of SEE countries and the European Commission (EC) signed the “the Athens Memorandum” – the Memorandum of Understanding on the Regional Energy Market in South East Europe and its Integration into the European Union Internal Energy Market - on December 8, 2003 in Athens, Greece, whereby they formally expressed their commitment to what is currently called the Energy Community of South East Europe (ECSEE).
For more information about the World Bank’s work in Turkey, visit: http://www.worldbank.org.tr.
For more information about this project, visit: http://www.worldbank.org/projects.
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