Turkish delight for InterGen and Enka

20 November 2000

Three combined cycle plants currently under construction will increase Turkey’s installed capacity by about 15 per cent

In 2000 the peak demand in Turkey was 21 588 MWe and the installed capacity about 26 000 MWe. Per capita consumption was only 1784 kWh, which is about half of the consumption of Turkey’s neighbours. Consumption is predicted eventually to match the amount used per person in the neighbouring countries, with the rate of growth being 8.1 per cent per year for the next two years and increasing to 9.1 per cent per year for the period between 2002 and 2005. Projections for the decade are that capacity increases of as much as 40 000 MW are required.

Build own operate

To support this growth, in 1997 the Turkish government asked for proposals to supply five power plants on a build own operate (BOO) basis. InterGen – a joint venture of Bechtel and Shell – together with Turkish company Enka won contracts to develop three of these power plants under 20-year agreements. These three plants, Gebze (1554 MWe), Adapazari (770 MWe) and Izmir (1523 MWe), are gas-fired combined cycle gas turbine (CCGT) stations and will be owned by separate project companies, in turn wholly owned by InterGen and Enka. The three plants, which will be the first to proceed under Turkey’s new BOO programme, represent an addition of about 15 per cent to Turkey’s current installed capacity.

On 28 September 2000 InterGen and Enka announced the loan signing for the three projects. Taken together, the total financing of $1.5 billion for the three facilities represents one of the largest private sector greenfield power project financings ever completed, certainly the largest private sector power investment yet in Turkey. Total project cost for the three plants will be over $2 billion.

Limited recourse facilities from the US Export-Import Bank (Ex-Im), Overseas Private Investment Corporation (OPIC), Hermes of Germany, OND of Belgium and a commercial bank facility have been arranged. Co-arrangers ABN AMRO, BNP Paribas, Société Générale and Westdeutsche Landesbank will provide the underlying funding for the export credit agency facilities as well as the commercial bank facility. The OPIC facility is funded by OPIC direct loans to each of the projects and will be used to finance costs that are ineligible for export credit agency cover. Finansbank of Turkey is providing letters of credit facilities to the Projects.

Botas, the Turkish state-owned gas company, will supply natural gas to all three facilities. The Turkish state-owned utility TEAS will buy the plants’ output under an energy sales agreement.

Bechtel and Enka are constructing the plants. Construction started this summer and commercial operation is scheduled for 2002. General Electric will be responsible for the supply and long-term maintenance of the combustion turbines, Alstom will be supplying the steam turbines out of Germany, and CMI will be providing the heat recovery steam generators from Belgium.

The Gebze and Adapazari plants are being built next door to one another near Taskisigi, a village located 12km north of Adapazari. The area was one of the regions severely affected by the 1999 Marmara earthquake, to which Enka, InterGen and Bechtel have all played an active role in responding.

The Izmir plant, on the Aegean coast, will facilitate the development a gas delivery infrastructure there.

Ten gas turbines

Under contracts valued at more than $900 million, GE Power Systems will supply ten MS9001FA gas turbine-generators for the three plants, plus a long-term service agreement.

The projects represent three milestones for GE Power Systems:

the largest order for power generation equipment ever secured in Turkey;

the largest single order for 9FA gas turbines;

the largest long-term service agreement in the 50-hertz market segment.

The long-term service agreement will cover all of the turbine-generators’ scheduled and unscheduled maintenance for 16 operating years. The agreement includes both in-country and out-of-country services to be provided through a consortium agreement between General Elektrik Ticaret Ve Servis SA, and GE Energy Parts Inc, respectively. The consortium will provide all parts and services required over the term of the agreement, in addition to service directors and labour for all outages. With the Turkish plants, the GE backlog of long term service agreements last year amounted to $7.2 billion.

In addition to the ten 9FA gas turbines, GE will supply ten hydrogen-cooled generators, technical services and training.

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