Cablegate: New Investment in Energy Projects

VZCZCXRO3422
PP RUEHDA
DE RUEHIT #1064 3511224
ZNR UUUUU ZZH
P 171224Z DEC 07
FM AMCONSUL ISTANBUL
TO RUEHAK/AMEMBASSY ANKARA PRIORITY 7336
RUEHDA/AMCONSUL ADANA PRIORITY 2332
RUEHC/SECSTATE WASHDC PRIORITY 7757

UNCLAS ISTANBUL 001064

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ECON ENRG TU
SUBJECT: NEW INVESTMENT IN ENERGY PROJECTS

1. (U) In a deal that will add nearly 3,000 megawatts of
electrical generation in Turkey, GE Energy Financial Services
is acquiring 50 percent of Gama Energy. Currently Gama
Energy, a subsidiary of Gama Holdings, owns 1,150 megawatts
generation capacity in Turkey and the partnership with GE
will bring that number to 4,000 megawatts by 2011. Gama is
expected to spend USD 3 billion to build hydroelectric,
thermal, and wind generation plants in Turkey.

2. (U) At a press conference celebrating this partnership on
December 10, James Burgoyne, GE Financial Services Managing
Director, stated that Turkey,s current electrical
consumption is growing at 8 percent a year, requiring an
additional 4,000 megawatts annually. Energy Secretary Guler
noted Turkey will need USD 100 billion in investments in the
energy sector by 2020 or else the country will face severe
shortages.

3. (U) At an AmCham dinner on December 11, State Minister
Mehmet Simsek underscored the need to ensure an adequate
supply of electricity. He argued there was no alternative to
privatization. Simsek conceded the pace to date had been
"dismal," but indicated the situation had now reached a stage
where the Government of Turkey must revive and accelerate the
process. In response to Simsek's comments, GE Regional
Executive for Southwest Asia Kursat Ozkan indicated that the
Gama investment was likely to be the first of several GE
investments in power generation in Turkey.
4. (U) Comment: New investment in Turkey's energy sector is
good news; however electricity shortages are likely to occur
before these new projects come to fruition. We have heard
from EMRA (Energy Market Regulatory Authority) that Turkey
may be short as much as 2,000 megawatts as early as summer
2008.
WIENER

© Scoop Media