(Updates with company comments in fourth paragraph.)
Jan. 3 (Bloomberg) -- IC Ictas Insaat Sanayi & Ticaret AS got $700 million from Turkiye Garanti Bankasi AS and two other lenders to acquire and run a power grid in northwestern Turkey as the government divests assets to boost energy investment.
Garanti, Turkey’s largest publicly traded bank by market value, Turkiye Is Bankasi AS and Turkiye Vakiflar Bankasi TAO provided the 13-year loan, Garanti Chief Executive Officer Ergun Ozen said today in Ankara, where IC Ictas signed an agreement to buy the grid in Trakya for $575 million and run it until 2035.
Turkey is selling power-distribution and generation assets to non-state companies as it seeks investment to meet electricity demand that’s growing about 7 percent a year. Bidders offered more than $16 billion in auctions in 2010, and the sales have dragged on as buyers struggle to raise financing to complete the purchases amid tightening credit markets.
IC Ictas, an Ankara-based builder, will make an initial down-payment of 20 percent, the state asset-sales agency said in a statement. The company will tap the loan to finance $100 million of that amount, IC Ictas Deputy CEO Kadir Kilicay said at the signing ceremony.
In total, IC Ictas will use about $430 million of the loan to pay the agency over four years, Adnan Bali, Isbank’s CEO, said at the event. The remaining funds will finance the running of the grid, according to Garanti’s Ozen.
IC Ictas is also building a 600-megawatt thermal power station in Turkey’s southern Adana province and will start operating a hydroelectric plant this year, Ibrahim Cecen, chairman of parent company IC Holding, said at the ceremony.
--Editors: Amanda Jordan, Randall Hackley
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