The timing is right and appetite is high for Turkey’s privatization projects, Christoph Fischer, the co-head of project and commodity finance at the Italian financial group Unicredit, has said.
The privatization volume is expected to reach $10 billion between 2013 and 2014, Fischer said, adding that UniCredit was focusing on financing these projects. The group is acting as a coordinating contractor in the construction and operation of Enerjisa’s 450 megawatt, 750 million euro thermal power plant, the $425 million privatization of the İskenderun Port, and as an advisory firm in the financing of the $1.3 billion Eurasian Tunnel.
UniCredit and Koç Holding together jointly control Yapı Kredi Bank, a leading local lender.
Noting that some of the tenders, including power distribution, had been canceled or delayed several times, Fischer said he still felt positive about the projects. “We are quite optimistic that those privatizations will be achieved soon. We do not think there will be a significant delay. There is enough appetite. Turkey has proved its macro-economic stability. Generally, international players and strong local investors bid together in tenders, which is why we are very optimistic,” he said.
The assets that are in the sales process do not bear the risks that greenfield projects could pose, Fischer added.
The Privatization Administration (ÖİB) has a number of the tender processes regarding energy and infrastructure assets in its portfolio, such as power distributors Akdeniz EDAŞ, Gediz EDAŞ, Boğaziçi EDAŞ, and thermal power plants Hamitabat-Seyitömer, and Kangal. According to Fischer, institutional investors may show an increased interest in participating in infrastructure projects thanks to Turkey’s newly-improved rating grade.
(The Journal of Turkish Weekly)