The FINANCIAL — Turkey’s natural gas distribution company Enerya is expanding to 18 towns in eight provinces of Turkey. The EBRD and Garanti Bank are financing a part of the investment programme, with each providing a 100 million Turkish lira loan (€24 million equivalent).
As a result, 65,000 new households in the provinces of Aksaray, Aydın, Denizli, Erzincan, Konya, Karaman, Niğde and Nevşehir will be connected to the gas grid by 2025.
Natural gas will provide people and businesses with a low-carbon, economical alternative to expensive and less efficient liquefied petroleum gas, fuel oil and electricity which are currently used for heating in these areas. The investment will produce annual savings of 65,000 tonnes of CO2 equivalent from 2022 onwards, according to the EBRD.
The expansion is part of the Turkish government’s plan to extend gas distribution throughout the country, increase access to energy for consumers, improve services, and reduce costs and the use of polluting fuels.
Enerya carries out natural gas distribution services in 11 Turkish provinces, including major urban areas of Konya, Antalya and Denizli. As of 2016, the company has reached over a million households, supplying 3.6 billion m3 of gas each year.
In the past three years alone, with previous financing from the EBRD and local lenders, the company has connected almost 300,000 new households to the gas supply.
The company is backed by the diversified Turkish conglomerate STFA and the global private markets investment manager Partners Group of Switzerland.
Arvid Tuerkner, EBRD Managing Director for Turkey, said: “At the EBRD we are committed to supporting communities in remote Turkish regions. Helping tens of thousands of households and businesses get access to a cheaper and more environmentally-friendly alternative for home heating is part of these efforts.”
Harry Boyd-Carpenter, EBRD Director for Power and Energy Utilities, added: “Expanding the gas distribution network in Turkey is a tremendous opportunity to improve the quality of life for Turkish households and deliver a cleaner, cheaper and more secure energy supply. We are very pleased to work again with STFA and its subsidiary Enerya, as well as our co-financier Garanti Bank to support this initiative.”
Aslan Uzun, STFA Energy Group President, commented: “We will continue to invest and streamline our operations in order to provide the best service for our customers while expanding our network with an innovative approach and pioneering the Turkish natural gas market. With these investments we support our government’s vision to supply natural gas to cities all over Turkey.”
Yetik Kadri Mert, STFA Group CEO said: “This new financing not only confirms domestic and international financial institutions’ continued support for Turkey’s infrastructure investments going forward but also underpins the sound strategic vision of STFA to increase its footprint in the sector. STFA will continue to pursue investments in infrastructure and energy with an aim to add value to all its stakeholders, namely, the subscribers of these infrastructures, the local municipalities, the governmental authorities and its shareholders.”
The EBRD has previously provided Enerya with multi-currency loans equivalent to €47 million. This is the second transaction denominated in local currency to help the company, whose revenues are in Turkish lira, mitigate the exchange risk.
The EBRD is a major investor in Turkey. To date, the Bank has invested over €9.5 billion in various sectors of the country’s economy, with almost all investments in the private sector. Promoting the use of sustainable energy and more environmentally friendly sources of energy is a priority for the Bank in Turkey. Almost half of its projects in Turkey are in sustainable energy.
In 2017, the Bank has signed more than 30 projects worth more than €1 billion and expects to exceed €1.5 billion in investments by the end of the year.