Tender announcement for the privatization of Eskişehir-Alpu domestic-coal (lignite) reserve area and the construction of a coal-fired power plant project (“Eskişehir-Alpu Project”) has been published in the Official Gazette on 27 September 2017. After the privatization of Çayırhan-2 Project in February 2017, Eskişehir-Alpu is the second privatization in line with the recent incentives regarding the utilization of domestic coal reserves for electricity generation.

Background

The electricity market law and other relevant legislation were amended in 2016 to provide additional incentives for the generation of electricity from domestic coal-fired power plants, including the new privatization method, which had started to be used with the Çayırhan-2 Project. In this new model, successful bidders are provided with both a long term (15 years including construction period) supply agreement and a price guarantee which is determined based on the lowest offer submitted in the tender. Please click here to read our client alert on Çayırhan-2 Project.

Information about the Project and Tender

The installed capacity of the power plant will be 1.080 MWe (3 x 360 MWe). The total investment cost of the project is expected to be approximately US$ 1.8 billion.

The tender process will consist of three-stages; (i) the submission of offers in sealed envelopes, (ii) the negotiation phase, and (iii) the Dutch auction based on the submission of lowest the price for electricity to be generated by the power plant.

Only legal entities and joint venture groups can participate in the tender. Individuals and investment funds can also participate only if that they are a member of a joint venture groups with at least one legal entity member.

Next Steps

The deadline for the submission of bids is 26 January 2018.

Amount of the bid bond is TL 25 million.

The new wave of lignite-fired power plant privatizations is expected to continue after Çayırhan-2 and Eskişehir-Alpu projects as well. New tenders for domestic-coal power plant projects, such as Afşin-Elbistan C-D-E, Konya-Karapınar, Afyon-Dinar, Trakya-Çerkezköy-Çatalca and Kırklareli-Vize are expected to be launched.

^{This information is provided for your convenience and does not constitute legal advice. It is prepared for the general information of our clients and other interested persons. This should not be acted upon in any specific situation without appropriate legal advice. This information is protected by copyright and may not be reproduced or translated without the prior written permission of Ergün Avukatlık Bürosu.}