Government of Turkey and World Bank Sign Agreement on Electricity Distribution Rehabilitation Project Loan

February 11, 2008

Ankara, February 11, 2008 — The Republic of Turkey, Türkiye Elektrik Dağıtım A.Ş. (TEDAŞ), and the World Bank signed today the agreement on a €205 Million (US$ 269.4 Million Equivalent) Electricity Distribution Rehabilitation Project Loan for Turkey.  The loan will be to TEDAŞ, the government-owned electricity distribution company, and will be guaranteed by the Republic of Turkey. Mr. Memduh Aslan Akçay, Director General of the Undersecretariat of the Treasury,  Mr. Haşim Keklik, General Manager of TEDAŞ, and World Bank Country Director Ulrich Zachau signed the legal agreements.

The Electricity Distribution Rehabilitation Project aims to improve the reliability of power supply to consumers in Turkey.  The project will support the rehabilitation and expansion of electricity distribution in critical areas, help reduce interruptions in supply,  and help improve the distribution system’s compliance with safety regulations.

The project includes:

  1. Rehabilitation and Expansion of the Distribution Network of the regional companies of TEDAŞ namely: 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.
  2. Technical Assistance to TEDAŞ and the regional companies in managing and supervising the implementation of the investment projects.

At the signing of the loan agreements, Mr. Zachau, Country Director for Turkey, stated: “The World Bank is very pleased to support Turkey’s rehabilitation and expansion of its electricity distribution system.  Reliable and efficient electricity distribution is crucial for ensuring a secure energy supply for Turkish families, businesses, and public institutions and for sustained economic growth.  The planned investments under the project will help achieve this goal.  They will help upgrade and rehabilitate critical parts of Turkey's energy distribution, reduce losses in the system, and increase the efficiency and reliability of electricity available to consumers.  They will also help make the electricity sector more attractive for private investment.  The World Bank contribution to the financing of this project is part of the Bank’s strong partnership with Turkey in the energy sector in support of Turkey’s ambitious energy reform and investment 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.

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