World Bank approves loan for power grid development in Turkey

Aug 31, 1998 02:00 AM

June 15, 1998 The World Bank approved a $ 270 mm loan to the Republic of Turkey for a National Transmission Grid Project to help strengthen the country's power grid capacity and continue the reform of its power sector.
Specifically, the project aims to:
- I - develop power grid capacity in a timely and environmentally sustainable manner;
- II - continue reform by establishing the independent operation of the power transmission grid system; and
- III - maintain the financial viability of the state institution responsible for the grid development and operation.

The project will comprise the following components:
a) Grid Investment Component - $ 493 mm. Development of the Turkish Electricity Generation and Transmission Company's (TEAS) grid investments, such as transmission lines, substations, and load dispatch facilities, for the period 1999 through 2003; and,
b) Technical Assistance - $ 9 mm. (i) Establishment of the independent operation of the transmission grid system under TEAS; (ii) institutional development including environmental analysis of grid investments; and (iii) helping TEAS borrow from international markets to ensure its financial viability.

The grid investment component, while partly financing TEAS's planned Transmission Core Investment Program, includes modernisation of the TEAS National Load Dispatch Center in Ankara (Golbasi), the 5 regional dispatch centres (Adapazari, Izmir, Golbasi, Keban, and Casamba), and a new regional load dispatch centre near Istanbul, Ikitelli. In total, the loan will finance 26 substations, with a total capacity of 6,500 MVA, and 3400 kilometres of transmission lines.

Technical assistance will include training for a large portion of TEAS staff, including familiarisation visits to overseas grid companies and workshops for senior staff on strategic planning.
The project will also help TEAS prepare to mobilise about $ 113 mm from international capital markets over the next 24 to 36 months.
The total project cost, including contingencies, is $ 502 mm. TEAS is providing $ 232 mm.
The World Bank loan will carry the standard interest rate for LIBOR-based, single currency loans, repayable in 17 years with a 4-year grace period.

Since Turkey joined the World Bank in 1947, Bank commitments to the country total $ 26.21 bn for 131 projects.

Source: not available
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