RIYADH — Saudi-based Acwa Power has announced the launch of the $1-billion Kirikkale Combined Cycle Power Plant in Turkey which has a 1,000 MW capacity, enough to meet three percent of the country's total electricity demand.

A leading developer, investor and operator of a portfolio of power generation and desalinated water production plants, Acwa currently has presence in 10 countries including in the Middle East and North Africa, Southern Africa and South East Asia regions.

The project was officially launched at a major ceremony held at the Presidential Complex in the presence of President Recep Tayyip Erdogan and Berat Albayrak, the Minister of Energy and Natural Resources besides other senior officials.

Acwa said the plant was the first and largest of Saudi energy investments in Turkey’s power sector.

More than 2,000 local engineers and workers were employed in the construction process, which began in December 2014, it stated.

Acwa Power's chairman Mohammad Abunayyan said: "The inauguration of this project is a clear sign of the growth and modernization in Turkey which is making the country set for continued development. We applaud the Turkish authorities on delivering a key infrastructure project to drive the economy forward for future generations."

The plant will be built by Acwa Guc Elektrik Isletme ve Yonetim Sanayi ve Ticaret A.S., a Turkish subsidiary of ACWA Power, an independent Saudi Arabian developer of power projects with a portfolio of 15,000 MW across investments in the Middle East, North Africa, Southern Africa and Turkey.

With a capacity of 950 MW, the project will be able to cover half the energy needs of a city the size of Ankara and will help meet Turkey's ever-growing demand for reliable energy.

The EBRD has played a key role in securing long-term financing for the construction of the new plant by arranging a syndicated loan of $250 million: $200 million for the EBRD's own account and $50 million syndicated to Banque Saudi Fransi which in addition, is providing parallel financing of $100 million under a murabaha Islamic financial instrument.

The International Finance Corporation (IFC) is also providing a syndicated loan of $170 million, of which $45 million is syndicated to the Korea Development Bank.

Korea Eximbank and Standard Chartered Bank, with cover from Korea Eximbank, are joining as parallel lenders with $90 million and $60 million respectively.

Highlighting the EBRD's leading role in arranging financing for the project, EBRD Director for Power and Energy Nandita Parshad said: "This is a landmark transaction for many reasons: it brings together international financial institutions and commercial banks to lend on similar terms; it offers the longest tenor to date - 16 years - for a power project in Turkey; it is also the first time in Turkey that an independent power producer is financed on a limited-recourse basis."

Paddy Padmanathan, President and CEO of ACWA Power, said: "The Kirikkale power project, which when completed will be a highly competitive electricity generator, is the company's first investment in Turkey. It is a solid foundation for the multi-fuel power-generation portfolio we seek to establish in this thriving economy. The project represents yet another milestone in ACWA Power's market expansion beyond the countries of the Gulf Cooperation Council."

The state-of-the art gas-fired power plant will use a combined cycle in which the fuel - natural gas - is fed into a gas turbine that generates electricity, while the waste heat of the exhaust is captured to produce steam. This, in turn, drives a steam turbine which produces additional electricity, all for the same fuel input. The integration of these two thermodynamic cycles improves overall efficiency for electricity generation, significantly reducing fuel costs for each kWh of electricity produced.

As an independent power producer, the plant will operate on a merchant basis, selling the electricity it generates on the power market.

The power this plant will produce is expected to replace more carbon-intensive energy generation in Turkey and will lead to an annual CO2 emissions reduction of over 1,825,000 tons.

Investing in sustainable energy is a priority for the EBRD in Turkey. The Bank started operations in the country in 2009 and currently works from offices in Istanbul, Ankara and Gaziantep. To date, the EBRD has invested over 4 billion euros in the country with half of this dedicated to sustainable energy projects.

The Kirikkale Power Plant will provide a steady and reliable energy to Turkey’s national grid, he stated.

The project is also among the top three most efficient combined cycle gas power plants in Turkey, significantly contributing to the country’s economy through savings in gas consumption.

Kirikkale project holds immense value to the Turkish community and its efficiency and design are testament to Acwa Power’s expertise in projects that provide reliable delivery of power and water at the lowest possible cost. — Agencies