World Bank Supports Electricity Distribution Rehabilitation Project in Turkey

Ankara, April 19, 2007—The World Bank approved today a Euro 205 Million (US$ 269.4 Million Equivalent) Electricity Distribution Rehabilitation Project Loan for Turkey.  The loan will be to Türkiye Elektrik Dağıtım AŞ (TEDAŞ), the government-owned electricity distribution company and will be guaranteed by the Republic of Turkey.

The main objective of the project is to help improve the reliability of power supply to consumers in Turkey by supporting electricity distribution rehabilitation and expansion. The project will assist in improving the distribution system in critical areas, reducing interruptions in supply and expanding capacity.  The investments will also help improve the distribution system’s compliance with safety regulations.

To support the achievement of these goals the project is expected to finance: 

• (a) Rehabilitation and Expansion of the Distribution Network of the regional companies of TEDAŞ in Ayedaş, Uludağ, Meram, Gediz, Toroslar, Menderes, Osmangazi, and Akdeniz.  Planned investments will target those parts of the distribution network with the most serious capacity, efficiency, and safety challenges.
• (b) Providing Technical Assistance to TEDAŞ and the regional companies in managing and supervising the implementation of the investment projects.

On the occasion of the approval of the project loan, Ulrich Zachau, Country Director for Turkey stated: “A reliable and efficient electricity distribution system is important for ensuring energy security in Turkey and for sustained economic growth—especially as electricity demand continues rising.  The planned rehabilitation investments will help strengthen the existing distribution network, which in parts is outdated, and help increase its efficiency and reliability.  We hope also that the project will enhance the attractiveness of the distribution business for private investment.  The World Bank is happy, by helping finance this project, to support an important part of Turkey’s ongoing energy sector reform program.” 

The World Bank loan to TEDAŞ, for the Electricity Distribution Rehabilitation Project has a 15-year maturity, including a 5-year grace period, a variable spread, and level repayments of principal.

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.tr/projects