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Projects & Infrastructure

CASE STUDY: Gama Enerji Appeals to International Investors with US$132mn HEPP Privatisation

Gama Enerji secured US$132mn to acquire the Karacaören I and II hydroelectric power plants (HEPP) from the Turkish Privatisation Administration, securing one of the longest tenors for a facility of its kind in Turkey.

Dec 15, 2016 // 1:48PM

Background

Using both an equity injection and a senior secured acquisition finance facility, Gama Enerji sought to acquire and develop Karacaören I and Karacaören II hydroelectric power plants (HEPP), which carry a total installed capacity of 78 MW and are owned by the Turkish Privatisation Administration, and set up a special purpose vehicle Kremna Enerji Üretim ve Ticaret to facilitate the privatisation.

The company secured a US$132mn senior secured acquisition finance facility, achieving competitive pricing and one of the longest tenors seen on this kind of facility in Turkish markets.

Transaction Breakdown

Gama Enerji secured a US$132mn senior secured acquisition finance facility with a tenor of 16-years, one of the longest tenors seen in the market from the European Bank of Reconstruction and Development (EBRD), Industrial and Commercial Bank of China (ICBC), and International Finance Corporation (IFC).

The proceeds of the loan will be used to acquire, renovate and streamline the Karacaören power plants, which were being privatised as part of the ongoing liberalisation of Turkey’s electricity market.

The financing deal for this transaction was executed very quickly, with the funding package closed in just over a month.

The transaction represented one of the Turkish market’s most significant privatisations in 2016 and demonstrates a renewed interest in privatisations of power plants in Turkey. 

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