SECTION 1
EXECUTIVE SUMMARY
HYDROELECTRIC DEVELOPMENT SCHEME OF THE CORUH
RIVER
Turkey, a country characterised by a high hydroelectric
potential, is facing a substantial increase in energy demand.
With an eye on reducing State involvement, the
government has launched a certain number of projects on the basis
of BOT and project financing. Still, the difficulties encountered
in turning such projects into concrete reality have led Turkey
to also carry on direct negotiations with business consortia,
providing its sovereign guarantee for the financing. The Karkamis
project with Elin (Austria) and the Deriner project with ABB and
Sulzer (Switzerland) resulted in private contracts with international
consortia supported by their governments with respect to setting
the financing required on the basis of bilateral agreements.
Within this framework, France and Turkey agreed
in a co-operation convention of September 1996 to provide their
support, and in particular, for France, to provide credits (in
accordance with OECD rules) within a scheme involving the construction
of four dams and hydro-electric power plants that are part of
the development of the Coruh river, located in north-eastern Turkey:
Yusufeli, Artvin, Borcka and Muratli.
By a governmental decree dated 23 July 1997,
the Turkey Council of Ministers authorised the Ministry of Energy
and Natural Resources to negotiate private contracts relating
to the two dams and hydro-electric power plants of Yusufeli (540
MW) and Artvin (332 MW) with the consortium led by Spie Batignolles
and including Cegelec (now ABB Alstom Power). The other two hydro-electric
projects were awarded to a consortium led by Elin (Austria) under
the same governmental decree.
On the basis of that decree, the Ministry of
Energy and Natural Resources authorised its General Directorate
of State Hydroelectric Works (DSI) to carry out the negotiations
and finalise the contracts with the selected consortia.
The general architecture of development of the
Coruh river requires, first of all to implement Yusufeli dam and
hydro-electric power station for reasons relating to the regulation
of the downstream river flow, and to the construction time required
(7.8 years). The Artvin project would be undertaken in a second
phase on commercial and financing terms to be determined, this
phasing making it possible to spread out the amount to be financed
over time.
The Yusufeli project is to be carried out in
accordance with the Final Design provided for the Turkish Government
in 1990 by EPDC (Electric Power Development Company—Japan),
and Su-Is Project Engineering Company/TMB Terzibasoglu Consultancy
& Engineering Company (Turkey). That design, constituting
the basis of the contract, will be reviewed by Coyne & Bellier
on behalf of DSI.
Along with the technical and commercial negotiations,
the Consortium mandated Paribas and Barclays to work out the project
financing in liaison with the French Administration, the financing
entities of the concerned countries, and the Turkish Treasury,
which is the borrower. With this in mind it was decided to:
— Choose a Turkish partner belonging
to the Dogus group. That group has several banks, a fact that
will facilitate the financing of the project, alongside international
banks.
— Widen the Consortium to take in Belgian,
Spanish and British companies in order to diversify the equipment
supply and to have a better spreading of related buyer's credits.
The Consortium led by Spie Batignolles TP consists
of three groups:
— the Civil Works Group, consisting
of the companies Spie Batignolles TP (France—Leader), AMEC
(UK), Besix (Belgium), Dogus (Turkey), Dragados Construccio«n
(Spain) and FCC Construccio«n (Spain), constituted as a joint
venture;
Coruh Civil Contractors the Electrical and Mechanical
Group, a consortium consisting of:
— ABB Alstom Power Hydraulique (France—Leader),
ABB Alstom Power Hydro (France), Spie Enertrans (France), Abay
TS (Belgium), Alstom Acec Energie (Belgium), ABB Generacion SA
(Spain) and Alstom Hydro SA (Spain);
the Engineering and Consultancy Services Group, a
consortium consisting of Coyne & Bellier (France—Leader)
and Dolsar Engineering (Turkey)
The Yusufeli project includes a rockfill dam
of 20 million m3, a surface spillway (8 million m3 in excavation
and 400,000 m3 of concrete), an underground plant, head race and
escape tunnels (325,000 m3 in excavation), three Francis turbines
of 184 MW power each, three 200 MVA vertical alternators, the
transformers, the outside 380 kV switchyard, and the related control
command and electrical equipment.
The project value is equivalent to US$ 383 million,
including provisions for contingencies and price escalation, made
up with US$ 454 million for offshore portion and US$ 384 million
for onshore portion. The financing is planned by means of buyer's
credits to the extent of US$ 454 million and of US$ 384 million
in financial credits; the Turkish Treasury will be the borrower.
The approval by the Minister of Energy and Natural
Resources of the commercial contract concluded with DSI in December
1999 makes it possible to resume discussions towards the implementation
of the financing required for the project.
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