Köktaş answered reporters’ questions in Antalya on Sunday after a meeting organized by the EPDK and the Natural Gas Distribution Companies Association of Turkey (GAZ-BİR) which gathered representatives of the natural gas distribution sector.The EPDK head implied that investors are not only considering the valuation of power plants in actual market terms, they also are paying attention to various other criteria while deciding on their bidding strategy. “Some investors may consider these high bids worth the cost of entering the market. In other words, a company may opt to purchase the facility completely to learn the business in its entirety by paying more instead of outsourcing the engineering and consultancy services for the operation of the power plants. Others may be acting with the idea in mind of leaving a facility that yields regular income to their children instead of bequeathing ready cash. In addition to this, what we call the psychology of the tender process may also be in effect.”
Köktaş also touched on the sector’s growth figures, adding that natural gas was the most rapidly growing sector in Turkey between 2000 and 2007. A serious uptick in the market was seen in the first quarter of the year, he argued, citing recent figures that natural gas delivery by distribution companies increased by 18 percent in the first three months compared to the same period a year ago. He mentioned the 10 percent rise in electricity consumption in the first four months over the previous year as another example of the upheaval in the business. This hike in electricity largely stems from an increase in industrial activities in the given period, he commented, and went on to say that the country’s gross domestic product (GDP) had risen 4.1 percent in the 40 years since 1970, whereas electricity consumption rose by 8.4 percent, which implies that the energy sector outperforms all other sectors in the long run with stable and high growth rates. The recent momentum in consumption is encouraging, he acknowledged.
This potential has reflections in foreign investment inflows, too, Köktaş noted. Asserting that the energy business has been able to draw the largest amount of foreign capital since 2008, Köktaş said, “The entry of serious amounts of foreign capital in Turkey is quite possible in the short run thanks to the potential in the energy sector.”
