TEDAS PRIVATIZATION

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REPUBLIC OF TURKEY PRIME MINISTRY PRIVATIZATION
ADMINISTRATION
TEDAS PRIVATIZATION Osman Demirci,
Ph.D. March 2006
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• OUTLINE
• Accomplishments in Privatization
• Electrical Energy Sector Liberalization
• Privatization of Electricity Distribution
• Privatization of Electricity Generation
• Conclusion

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• PRIVATIZATION IMPLEMENTATIONS
• Revenue 1985-2003 8,048 BILLION
• Revenue 2003-2005 18.297 BILLION

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PRIVATIZATION in 2005
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MAJOR UPCOMING PRIVATIZATION PROJECTS
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ELECTRICITY ENERGY SECTOR LIBERALIZATION

• OBJECTIVES
• Efficiency in Operations Of The Assets
• Electricity Energy Supply Security and Supply
  Quality
• Decrease in Theft/Loss Rates
• Investments performed by Investors
• Consumers Benefit from Competition and Service
  Quality in the market

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REFORM PROCESS
17 March 2004
Transition Period Roadmap
Strategy Paper
3 March 2001
Balancing and Settlement Regulation
Electricity Market Law No 4628
Settlement Communique
Mostly compatible with Directive 2003/54/EC
2011
2001
2003
2004
2006
2007
Distribution Privatization 20 DisCo
Generation Privatization 6 Portfolio Gencos with
16,3 GW
EPDK, the Regulator
unbundling
TEAS
Market Opening 30 with Eligible Consumer Limit
of 7.8 GWh/yr
Market Opening 100
GenCo
TransCo
TradeCo
TEDAS taken into Privatization Program 02 April
2004
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Ministry of Energy and Natural Resources (ETKB)
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• PRIVATIZATION (ÖIB)
• Distribution Companies
• Privatization Metodology
• Data Room
• Tender Process
• REGULATION (EPDK)
• Tariff Regulations
• Investment Approval Inspection - Enforcement
• Service Quality Measurement Enforcement
• Balancing and Settlement
• TRANSMISSION SYSTEM OPERATOR (TEIAS)
• Market Financial Settlement Center (TEIAS-MFSC)
• National Load Dispatch Center (TEIAS-NLDC)
• ENERGY PURCHASE CONTRACTS

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TEDAS

• Share 100 PA
• Energy Sale (Billion kWh) 86.2, 92.8 _at_ 2004,
  2005
• Net Gelir (Billion YTL) 12.5
• Consumers 27,251,558
• Residential 22,617,716 (83.0)
  Commercial 3,507,852 (12.8)
• Industry 301,391 ( 1.1)
  Irrigation 344,638 ( 1.3) Others 479,961 (
  1.8)
• Personal 31,256
• Labourer 5,477 (temp) 16,115 (perm)
  Employee 831 (cont) 8,833 (perm)
• Estimated Tender May 2006

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20 DISTRIBUTION COMPANIES HAVE BEEN FORMED IN
DISTRIBUTION REGIONS DEFINED IN ELECTRICAL ENERGY
SECTOR REFORM AND PRIVATIZATION STRATEGY PAPER
ISSUED BY HIGH PLANNING COUNCIL.
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PRIVATIZATION METODOLOGY
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TOR CONTRACT

• Objective
• Definitions and Abbreviations
• Scope of Contract
• Duration of Contract
• Principles of Transfer and Re-Transfer
• Rights and Obligations of Parties
• Force Majeure
• Termination of Contract
• Principles Pertaining to the Termination of
  Contract
• Transfer of Contractual Rights
• Settlement of Disputes
• Other Provisions
• Effectiveness of Contract

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SHARE SALE CONTRACT

• Parties
• Definitions and Abbreviations
• Scope of Contract
• Sales Price and Payement
• Transfer of Shares
• Provisions on Employees
• Profit Sharing
• Declarations by the Administrations
• Declarations and Commitments of the Buyer
• Capital Structure of the Company after the
  Transfer
• Violations of Contract Provisions
• Miscellenous Provisions
• Settlement of Disputes
• Effectiveness

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DRAFT TENDER DOCUMENTATION

• Tender Document Objective
• Infomemo and Tender Document
• Pre-Qualification
• Technical (0.2) Sold kWhgtDisCo kWh
• Experience (0.2) of Customer gt of DisCo, 3
  years
• Financial (0.3) Asset gt1.5 x DisCo Asset
• Financial (0.3) Capital gt 0.6 x DisCo Asset
• Info Room

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ELECTRONIC DATA ROOM CONTENTS

• General Information
• Financial Information
• Operational Information
• Main Contracts
• Legal Affairs Regulatory Environment
• Environmental Information
• Personnel
• Distribution Network
• Information Technology
• Macroeconomic And Market Data

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Electicity Market Tariffs Regulations

• Communiques
• Regulation of Distribution System Revenue
• Regulation of Retail Service Revenue and Retail
  Prices
• Regulation of Transmission System Operation
  Revenue
• Regulation of Transsmission System Revenue
• Determination of Transmission and Distribution
  Connection Charges
• http//www.emra.gov.tr/english/regulations/electri
  city.htm

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TARIFFS
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TARIFE
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TARIFFS
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TARIFFS
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ENERGY MARKET
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ROAD MAP FOR TARGET MARKET DESIGN
The Transition Period Turkish wholesale
electricity market consists of a) Bilateral
Contracts Markets between the market participants
b) An real-time system balancing, operational
and day-ahead planning mechanism by the
Transmission System Operator TEIAS/NLDC. The
TSO will procure balancing and other services
from the market participants through an Real-Time
Balancing Market (RTBM) and long term contracts
for procurement of ancillary services.
The Transition Period Turkish Wholesale
Electricity Market arrangements are restricted to
the existing infrastructure capabilities.
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MARKET SIZE OVERVIEW GENERATION
Installed Capacity 36,8 GW
Electricity Generation 150,0 TWh
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EÜAS Portfoy GenCo
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ENERGY PURCHASE CONTRACTS

• TETAS and DisCo 60 fixed
• EÜAS-Portfoy and DisCo
• 25 fixed and 15 optional

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ENERGY PURCHASE CONTRACTS

• Time table for transactions
• Guarantee
• Termination of Contract

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INVESTOR OPPORTUNITIES

• Return on investments
• Beating the theft/loss parameters targeted in the
  tariff
• Beating the efficiency targets embedded in the
  operating expense component of the tariff
• Competition on energy generation cost. (vertical
  integration, private producers)