The European Bank for Reconstruction and Development (EBRD) is granting a $134.75 million loan to electricity companies operating in the north west of Turkey “in a move to enhance reforms in the Turkish electricity sector” it said.
The Bank is extending a $134.75 million loan to the Trakya Electricity Distribution Company (TREDAŞ), the Trakya Electricity Retail Company (TREPAŞ), and to their parent company, IC İçtaş Elektrik (ICEL).
The transaction is part of a $700 million dual-currency financing package, which also includes parallel loans from Garanti Bank, İşbank, Vakıfbank and TSKB.
The funds “will enable the three companies to optimise their financing structure and implement capital investment plans for 2016-20” EBRD said, adding that these include expanding and upgrading the network, enhancing metering systems, implementing environmental, health and safety improvements and increasing network efficiency.
Founded in 1995, state-owned TREDAŞ was acquired in 2011 by the diversified Turkish conglomerate İbrahim Çeçen Yatırım Holding, through its energy-sector investment arm ICEL. In 2013. when distribution companies were legally required to unbundle their retail activities, TREDAŞ separated into two units with TREPAŞ to focus solely on retail, EBRD explained.
Since the beginning of its operations in Turkey in 2009, the EBRD has been “actively promoting the liberalisation of the electricity market, including unbundling and privatisation of the players in the distribution sector” it said, adding that “while all distribution firms have been privatised since 2013, reform is still under way and is due for completion by 2020 when all consumers will be free to choose their own energy suppliers.”