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Pelin Yenigün Dilek, Chief Economist Garanti Bank, Turkey |
Memduh Aslan Akcay, Director General, External Economic Relations, Prime Ministry, the Undersecretariat of Treasury (Turkey) at the Turkey Country Presentation |
Aygen Yayikoglu, Managing Partner, Crescent Capital addresses the Turkey Country Presentation |
Sinan Ak, Assistant General Manager, Financial Department, Zorlu Enerji Electric Generation Co attended the country presentation on Turkey |
Enormous potential in alternative energy markets
Turkey is the most recent addition to the EBRD’s countries of operations and as a result, the country’s first presentation at the EBRD’s 18th Annual Meeting (15-16 May) was eagerly anticipated. Several government and business panellists discussed Turkey’s economic history and the outlook for the future, with a particular focus on the energy sector.
Turkey’s economic past
“If we want to understand what is going on in Turkey at the moment, we first have to look at the 1980s and 1990s.” This was the view of Memduh Aslan-Akcay, Director General at the Turkish Treasury, who set out the broader context for the panel discussion.
He recounted several previous dysfunctions in the Turkish economy, such as a very high inflation rate, and explained how they led to a significant financial crisis in 2001-2002. “Many of our banks became insolvent; we had to change our system,” he explained. More concretely, this resulted in many structural reforms, including in the financial, tax, public governance and public debt management sectors.
“Turkey entered the recent crisis with a very strong fiscal side and banking sector,” according to Pelin Yenigun-Dilek, Chief Economist at Garanti Bank. “The crisis has nonetheless had quite a strong effect on our growth numbers,” she added.
Ms Yenigun-Dilek highlighted factors that make the current crisis particularly difficult for Turkey, including certain components of its foreign debt. Most importantly, the failure to reach an agreement with the International Monetary Fund since 2008 has created uncertainty in the country’s financial sector. But why is the situation better this time around, compared with 2001?
“Because of the major restructuring since the last crisis,” Ms Yenigun-Dilek said, “Turkey’s economy is in a far better shape this time.”
Turkey’s future: the energy sector
Subsequent speakers presented the future outlook for Turkey, particularly opportunities in the energy sector.
“We believe that in coming years there will be huge investments in the wind sector. In our opinion, it has enormous potential,” said Sinan Ak, Assistant General Manager in the Financial Department of Zorlu Enerji. “This is the reason why the company is increasingly concentrating on hydro, wind and solar energy – domestically in Turkey – as well as in a number of international projects in Pakistan, Israel and other countries.”
The EBRD’s first signing in Turkey
The EBRD signed its first deal in Turkey with Rotor Elektrik, a member of Zorlu Enerji, to help finance the construction and development of a 135-megawatt wind farm in the Ozmanye region of southern Turkey. The Bank provided a loan of €45 million and cooperated with the International Finance Corporation and the European Investment Bank on the project, after a number of commercial banks withdrew in the aftermath of the current economic crisis. The wind farm is expected to be operational by the end of this year and will consist of 54 wind turbines.
Opportunities for growth
Aygen Yayikoglu, Managing Partner at Crescent Capital, stressed the importance of Turkey as an emergent market and its geo-strategic potential. “There are not that many markets in the area apart from Turkey: it’s large, it’s young, it’s getting richer. It’s a mini-Asia right next to Europe,” he said. Following the financial crisis, Mr Yayikoglu anticipates a forthcoming energy crisis but is optimistic that the country can cope. “There is a huge demand for energy in the country,” he explained. “and I think that the EBRD will play a key role in helping to develop this sector.”
The EBRD’s future strategy in Turkey
Turkey represents the second largest economy within the EBRD’s countries of operations. The Bank plans investments of up to US$ 600 million in Turkey by the end of next year, mainly on projects outside the main metropolitan centres. In terms of sectors, the Bank’s investments will mainly focus on micro, small and medium sized enterprises, agribusiness, privatisation of the economy, municipal environmental services and energy efficiency.
By Volker Ahlemeyer, Internal Communications Adviser
Contact: Communications
15 May 2009
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