ISSUE

38APRIL 2017

TURKEY-RUSSIA BOOST ECONOMIC COLLABORATION, ESTABLISH USD 1 BILLION INVESTMENT FUND President Erdoğan heads to Russia to shake hands for new agreements in various strategic fields

President Recep Tayyip Erdoğan paid both countries will invest up to USD Erdoğan stated that the two countries a one-day official visit to Moscow on 500 million each in the -Russia should move toward their USD 100 March 10, to attend the 6th Meeting Investment Fund that is set to reach up to billion trade volume goal with a steady of the Turkey-Russia High Level USD 1 billion in total. approach. The likely inclusion of Turkish Cooperation Council and to meet with The joint fund is also of utmost manufacturers as suppliers for Russia's his Russian counterpart, Vladimir Putin. importance as it is one of the first MS-21 aircrafts is considered to be a The two held meetings on various international initiatives of TWF -- whose signal of the burgeoning bilateral trade. topics, including energy and military current portfolio includes a 100 percent The meeting also brought the energy cooperation and the lifting of certain share in Turkey’s largest state-owned collaboration issue to the table as the restrictions on travel and imports. bank Ziraat Bankası; a 51.11 percent share agreement for the TurkStream natural The official talks between Erdoğan in Turkey’s 6th largest bank Halk Bankası; gas pipeline project has recently gone and Putin saw the signing of several a 100 percent share in fuel pipeline into force following its ratification agreements in energy, trade, and company BOTAŞ; a 100 percent share in by both parties, which is expected to intellectual property. The most Turkish Petroleum; a 100 percent share provide momentum to the construction prominent among these accords was the in the national postal service company works. Regarding the Akkuyu nuclear signing of an MoU for the establishment PTT; a 73.6 percent share in Borsa power plant project in Turkey’s Southern of a joint investment fund between the ; a 100 percent share in satellite Anatolian province of Mersin -- another Russian Direct Investment Fund (RDIF) communications company TÜRKSAT; a major Russian-Turkish project that and the Turkiye Wealth Fund (TWF). 6.68 percent share in national telecoms is back on track following Turkey's Signed by TWF Chairman and CEO company Türk Telekom; a 100 percent rapprochement with Moscow -- Erdoğan Mehmet Bostan and RDIF CEO Kirill share in mining company Eti Maden stated that Turkey is carrying out all Dmitriev on behalf of the parties, the İşletmeleri; a 100 percent share in liabilities it assumed under the terms of agreement will enable Turkey and Turkish Maritime Enterprises; a 100 the agreement concluded with Russia. Russia to focus their joint efforts on percent share in tea production and Accompanying Erdoğan on this official attractive investment projects that might cultivation company ÇAYKUR; a 49.12 visit was a delegation comprised of strengthen bilateral economic ties and percent share in , as ministers, top government officials and increase investment flows between the well as shares in other government ISPAT President Arda Ermut. two countries. As per the agreement, enterprises. INVESTORS' APPETITE TURQUOISE CARD WIDENS IN GIVES ITS HOLDERS INDEFINITE RIGHT TO STAY AND Q1 2017 WORK IN TURKEY & TO RESIDE WITH THEIR FAMILIES Turkey has experienced a considerable amount of recovery with regard to FDI in the first few months of 2017. A series of mergers and acquisitions signal that Turkey Foreigners who meet any Carry out research or conduct studies is on course to attract more FDI in of the following conditions would be eligible to in science, industry 2017 than the previous year. or technology at acquire Turquoise Card: international level

Regarded as highly- Have worldwide GARANTI & qualified labor force success in culture, based on educational & artistic or sports BBVA professional qualification activities BBVA of Spain and Garanti Bank of Turkey recently agreed on a deal Considered as highly- Contribute that will allow BBVA to acquire an qualified investor due to to worldwide additional 9.95 percent of Garanti, investment or export level, recognition & an investment estimated at around employment size and promotion of USD 900 million. As of end-2016 contribution to Turkey Turkey financials, Garanti Bank is the third largest bank in Turkey in terms of asset size. With this acquisition, BBVA will increase its share in Garanti to 49.85 percent. Garanti Bank has been fully consolidated in the financial statements of BBVA Group since 2015. ACCOR & RIXOS WANDA In March 2017, AccorHotels and Rixos GROUP & SHARE OF BBVA IN GARANTI announced a strategic partnership Others for the management of 15 Rixos MAR YAPI branded hotels worldwide, including properties in Turkey. Each party Chinese real estate giant Wanda will have a 50 percent share in Group signed a business partnership the joint-venture, which will also agreement with Turkish Mar manage the hotel with the largest Yapı in late February in Shanghai. live entertainment center in Antalya, Accordingly, the first offshore hotel Turkey. Along with Turkey, Rixos of Wanda Group will be opened in operates hotels in premium markets Istanbul by the end of 2018. Wanda CONTRIBUTION OF THE DEAL such as Dubai, Sharm El Sheikh, Vista Istanbul will open with 150 TO BBVA’S NET PROFIT (F) Dubrovnik, Davos, and Russia. rooms and 300 residences. After this first venture in Istanbul, Wanda Group, owning a chain of luxury hotels, plans to open new first class € 110 hotels in Chicago, Los Angeles, MILLION €MILLION 165 London, and Sydney under the Wanda Vista brand.

2017 2018 (9 MONTHS) SOUTH KOREA’S HANWHA BUILDS ONE OF THE WORLD'S LARGEST SOLAR POWER PLANTS IN TURKEY The largest-ever renewables auction in the world households. The project company will also be history took place on March 20, with the 50:50 conducting R&D activities in Turkey for at least 10 consortium of Turkey’s Kalyon Enerji and South years with the employment of at least 80 percent Korea’s Hanwha Q Cells winning the tender for local staff. the construction of a 1 GW solar power plant in Commenting on the tender, Minister of Energy the Karapınar district of the Central Anatolian and Natural Resources Berat Albayrak said the province of Konya. The winning bid was USD 6.99 project is a revolution for Turkey's energy sector, cent/kWh. adding that he is hoping to announce a similar The tender – held in a reverse auction where wind energy tender in the coming months. the ceiling price was USD 8 cent/kWh – will see 1 South Korea's Hanwha Group is the parent GW of installed capacity along with a production company of solar cell producer Hanwha Q Cells, factory for photovoltaic (PV) equipment coming which produces PV cells and modules and builds online over the next two years. Under the terms solar parks globally. The Turkish partner, Kalyon, of the tender, the power purchase contract will be is a conglomerate with significant experience valid for 15 years, and the solar equipment used in construction, including state infrastructure must be domestically sourced. projects. The total investment in this solar energy mega According to official figures, Turkey’s installed project is estimated at USD 1.3 billion. The solar solar power generation capacity jumped to 832.5 power plant will be operational for 30 years and MW by end-2016, more than tripling the 249 MW meet the energy needs of more than 600,000 capacity from only a year before.

GE, BORUSAN ENBW, FINA TURKEY’S WIND POWER & ÖZGÜL IN A NUTSHELL HOLDING (2016)

ASSYSTEM & General Electric, Borusan EnBW, HIGHEST Fina Enerji and Özgül Holding GROWTH RATE IN EU & G20 ENVY signed an MoU to collaborate on the installation, operation and financing 30% Assystem, an international group of a joint wind farm as part of the listed on Euronext Paris, entered into YEKA (Renewable Energy Source TH TH an agreement with Turkish nuclear Area) project to be announced by engineering company ENVY Energy the Turkish Ministry of Energy. LA7RGEST 12LARGEST CAPACITY IN EU GLOBALLY in 2016, for the purchase of 51 percent YEKA, the largest wind project of ENVY’s shares. The purchasing in renewable energy in Turkey, process was completed in early 2017. will see preliminary preparations Envy is involved in two nuclear LARGEST MARKET on financing and project by the RD IN EU AFTER power plant construction projects in companies. GERMANY & FRANCE Turkey-Akkuyu and Sinop. Assystem 3 will provide technical expertise and broaden the company’s geographical footprint through this deal. INSTALLED CAPACITY HIT 6 GW 1-2 London March UK ISPAT HOLDS AUTOMOTIVE ROADSHOW IN UK

As a dynamic and growing G20 economy, Turkey’s business-friendly investment environment and access Cannes from scratch with a capacity of 200 to large domestic and international 13-16 million passengers per annum. It markets continue to support FRANCE March will be surrounded by newly built, international investors’ growth stories. modern facilities including hotels, Given its unique advantages, Turkey offices, shopping and living centers and is a manufacturing home to Ford, Fiat, exhibition spaces. The introduction Hyundai, Renault, Toyota, Honda, TURKEY’S of the law allowing acquisition of and several other leading automotive citizenship for individuals who companies. These brands use the ACCESSIBILITY buy property worth more than USD Turkish market as a hub to export to FOR REAL ESTATE 1 million was also another point Europe and Asia. With over a million highlighted at MIPIM 2017. vehicles produced in Turkey reaching PROMOTED AT international markets in 2016, Turkey Bursa is at the forefront of international MIPIM 2017 24-25 automotive manufacturing. March TURKEY Against this backdrop, ISPAT ISPAT collaborated with many of organized a trade mission in UK on Turkey’s municipalities at this year’s March 1-2 for Turkey’s automotive MIPIM – the world’s leading property market – to promote investment sector players. The goal of the mission ISPAT ATTENDS opportunities in Turkey’s real estate was to provide an update on the sector and to educate interested ULUDAĞ state of the economy and investment investors on how easily accessible the opportunities, as well as to discuss Turkish market is. ECONOMY SUMMIT Turkey’s role in the global automotive Speaking at the seminar entitled industry, trends that are shaping th “Why is Turkey a hotspot for The 6 Uludağ Economy Summit, the sector, and links with the UK which focused this year on topics such investors?”, ISPAT President Arda automotive industry. as the new world order, a new Turkey, Ermut and Turkey’s Minister of This mission provided a timely and a new growth story, took place on Environment and Urbanization opportunity for the delegation to meet March 24-25 in Bursa. The summit Mehmet Özhaseki positioned Turkey as with an audience of influential media brought together key speakers and a country full of lucrative opportunities representatives, automotive sector businesspersons from Turkey and for the global investment community. stakeholders, and opinion makers. around the globe, including Turkish They drew attention to the fact that In particular, the mission allowed Deputy Prime Minister Mehmet Şimşek Turkey attracted more than USD 180 and Turkish Minister of Transport, an opportunity to cultivate long- billion of FDI in 2002-2016. term relationships with Bloomberg, Maritime Affairs, and Communication According to Ermut, Turkey’s lure Ahmet Arslan. Reuters, Sky News, The Economist will further increase with brand- Intelligence Unit, Automotive World, Speaking at the “New World Order: new projects breaking ground across Economy & Policy” session of the and additional automotive industry the country, in particular following magazines. Delegates of the mission summit, ISPAT President Arda Ermut the completion of the urbanization- emphasized that the Turkish economy delivered first-hand experiences and gentrification process and several proof points that validated the strength is stable and strong enough to achieve mega projects. While the Galataport, higher growth rates and attract and resilience of Turkey’s economy and Haliçport, Tarlabaşı, Okmeydanı, the value proposition of its automotive larger amounts of FDI. Ermut stated Piyalepaşa, and Örnektepe projects that despite temporary setbacks in sector. stand out as the most attractive and 2016, Turkey will go back to its sound The delegation included perspectives profitable opportunities for real estate fundamentals after the referendum, of a cross-section of the public, private, investors, wider opportunities are with an eye towards its 2023 goals. and NGO sectors. This included ISPAT available across Turkey, including in The summit also advanced multiple President Arda Ermut, Secretary provinces such as Balıkesir, Hatay, agendas, such as social investment, the General of the Turkish Automotive Kocaeli, and Çanakkale. near-term future of energy, new digital Manufacturers Association (OSD) Third Airport was at the forefront wave and developing technologies, Osman Sever, and Vice President of of the international audience at the leaders of tomorrow, the future of Product Development at conference. The airport is set to be banking, entrepreneurship, and Burak Gökçelik. the largest airport in the world built investment by 2023.

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