• INTERNATIONAL DEVELOPMENT ASSOCIATION

1818 H STREET, N.W., WASHIJ'.JGTON 25. 0. C. 'TELEPHONE: EXE"CUTIVE3-6360 Public Disclosure Authorized

IDA Press Release No. G+/14 Subject: $24 million credit to Tui--key July 14, 1964 for electric power The International Development Association (IDA), an aft':iliate of the World

Bank, today extended a credit equivalent to $24 million to Turkey to help finance

a.n expansion program being carried out by the <;ukurova Electric Company. The pro­

gram will quadruple the Company's generating capacity and will increase the supply

of power to the 9ukurova plain, an important agricultural region in southern Turkey, Public Disclosure Authorized and to Hatay Province, which contains Iskenderun, Turkey's most important Medi­

terranean port.

The 9ukurova Electric Company, established in 1956, i~ the only power company

-- in Turkey owned mostly by private shareholders; 56% of its stock is privately held, while the balance is owned by the Etibank, a governmental institution which plays a

large role in Turke~'s electric ppwer industry.

Public Disclosure Authorized The Company now supplies power to its service area on the 9ukurova plain from

a single plant, the 36,000-kilowatt hydroelectric station on the Seyhan River near

Adana. The plain lies between the Taurus mountains and the Mediterranean, and con­

tains the towns of Adana, Tarsus and Mersin. The region is characterized by a

vigorous and rapidly expanding agricultural economy. Nearly a third of Turkey's

cotton crop is grown here and processed locally in many yarn, textile and cotton­ seed oil mills. Over 70"/o of the Company' s power sales are to these and other

processing industries. Public Disclosure Authorized The program being financed with the help of today's IDA credit Will substan-

tially enlarge the Company's operations and enable i·t to eJ,..tend its service to a • Wider area of southern Turkey. Its service area will be expanded to include adja­ cent Hatay Province; there is an acute shortage of power in this province, ·where .. 2 ...

the d.em~d a.rises chiefly from industrial plants and from the activities ot the port of Iskenderun. The projects making up the program include the construction of two new power • generating plants. One will be a 50,000-kilowatt steam plant riear Mersin, on the

shore of the ~editerranean, adjacent to an oil refinery which will supply its fuel;

the other is a 100,000-kilowatt hydroelectric plant on the Kadincik River, some 31 miles southwest of Adana. The credit will also help to finance the construction of

about 160 miles of transmission lines, linking the new stations to the existing_

system and extending it as far east as Iskenderun.

The Mersin plant should be complete·d by July 1966, and the Kadincik plant is

expected to be complete by 1969. The existing Seyhan station, built with the help

of a World Bank loan made in 1952, is now expanding its capacity by 18,000 kilowatts

with the help of an IDA credit made in 1963. The new capacity will come into opera­

tion this year; and in order to give Iskenderun additional power as soon as possibl~

it is intended to complete the transmission line to the port city by late 1965. The total cost of the project is estimated at the equivalent of $43. 5 million. • The IDA credit will cover $24 million of the total, including all foreign exchange

requirements. To meet the rerna-inin~ costs, the Company plans to increase its share

capital threefold and to apply all its available earnings to the project. The

Turkish Government will also make a contribution by permitting the Company to defer

certain interest and custom duty payments.

The IDA credit is for a term of 50 years. Repayment of' principal will begin

August l, 1974 a:rter a 10-year period of grace. Therea~er 1% of the principal will be repayable annually for 10 years and ?f'/o will be repayable annually for the final 30 years. The credit is free of interest but a serv~ce charge of 3/4 of 1% per

annum on the amount withdrawn and. outstanding will be made to meet IDA's administra-

tive costs. The Turkish Government will relend the proceeds of the credit to the •

9ukurova Electric Company for a term of 25 years, including a 5-year period of

grace, with interest at 72p.eld..