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Turkish sponsors and lenders ready for a restructuring
25 October 2011
Turkish lenders have to contend with looming gas industry restructuring, higher funding costs and new renewables legislation. Sponsor support, and structures that allow it to change over time, are key. Robin Sayles reports.
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[sponsor support]
The flow of financings for Turkish greenfield power projects has remained strong throughout the global downturn, as impressive national growth figures accompany domestically-driven demand.
Turkey may suffer from recent global market turbulence, because the EU is Turkey’s largest export and import partner, and in September the International Monetary Fund lowered its estimate for Turkish GDP growth in 2011 to 6.6%, and its outlook for 2012 to 2.2%.
Nevertheless, most market participants expect power demand to continue to grow at a sufficient rate to support prices for at least the short to medium term, providing crucial support to projects that sell power into the wholesale market. Gas-fired plants represent around half of the Turkish generation fleet, and more large-scale projects are closing this year, so the price of gas will play an important role in the market’s development.
The power price projections are by no means simple, because GDP forecasts are subject to revision,...
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