AES Corp., the U.S. power producer active in 29 countries, will buy almost half of Turkish utility Entek Elektrik Uretimi AS to form an energy partnership with Koc Holding AS, the country’s biggest group of companies.
AES agreed to pay the Koc unit, Aygaz AS, $136.5 million for the 49.6 percent stake, Aygaz said in a filing with the Istanbul Stock Exchange today.
The partnership plans to bid in government power plant auctions as well as building facilities, and it aims to be among the five biggest energy companies in Turkey within five years, according to a joint statement at a news conference in Istanbul . The venture ultimately aims to reach 3,000 megawatts of capacity, with a focus on coal and gas-fired generation, Koc Energy Group head Erol Memioglu said.
AES is joining international companies such as Austria’s Verbund in taking on a Turkish partner to invest in an industry where demand is growing at about 6 percent a year, according to a Nov. 9 Deloitte report. The country may need as much as $150 billion in power industry investment by 2023, Energy Minister Taner Yildiz said Nov. 24.
Turkey has almost completed the sale of 20 electricity distribution networks and is preparing to sell power plants totaling 16,000 megawatts of capacity over the next two or three years, Ahmet Aksu, head of the state asset sales agency, said Oct. 15.
The country is selling power assets to draw in private investment to help meet demand as the economy expands and the population increases.
Entek controls 300 megawatts of capacity at two power plants, Memioglu said at the news conference.