Turkey’s Karadeniz Seeks to Sell Floating Power to Africa, U.K.

Karadeniz Holding AS, the Istanbul-based operator of ships that supply electricity, plans to sell power to sub-Saharan Africa and U.K., its chief executive Orhan Karadeniz said today.

The company is converting a vessel previously used to carry yachts into a so-called powership, a floating boat that produces electricity from fuel-oil or natural gas, at a shipyard in Tuzla, near Istanbul, Karadeniz said at a news conference at the site today. The vessel will be used to sell power to a country in Africa he declined to name.

Karadeniz is selling electricity in Iraq, Pakistan and Lebanon from powerships converted from bulk carriers or barges with a total power capacity of 1,250 megawatts.

The Istanbul-based company completed building a 136-megawatt vessel, The Karadeniz Powership Orhan Bey, at the Sedef shipyard in Tuzla that will set sail for Lebanon on Aug. 5 to increase the supply capacity to 270 megawatts under a three-year contract. The 205-megawatt Karadeniz Powership Fatmagul Sultan started selling power to Beirut in April. The company’s sales to Lebanon, valued at $396 million, are one-fifth of the country’s working capacity of 1,300 megawatts, Karadeniz said.

“Even some developed countries, such as the U.K., are expected to have shortfalls from 2015 or 2016,” Karadeniz said. “Therefore U.K. is among the countries we are targeting from 2015 or 2016, as well as all of Africa.”

New York is getting power from gas turbine barges, which may mean business opportunities for the company, Karadeniz said.

The building of powerships are financed through bank loans and advance payments from the buyer countries, Karadeniz said. Each vessel costs at least 1.2 million euros per megawatt, Karadeniz said.

Karadeniz Holding is getting partnership offers from foreign strategic companies, Karadeniz said. “We can go for it at the right time with the right partner, but there is nothing at the moment,” he said.

A legal case opened at a World Bank tribunal after the company said the Pakistan government breached its contract to supply fuel to two of its powerships with 330 megawatt capacity off Karachi could last four years to five years, Karadeniz said. The company is seeking $600 million in damages.

To contact the reporter on this story: Ercan Ersoy in Istanbul eersoy@bloomberg.net.

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net.

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