Hydro- power project in Turkey

Nigel Hawke was a Director of an operating 672 MW hydro-electric power station located on the Eurphrates River in Turkey.  The Project is located 90 km downstream from Attaturk Dam and about 30 km north of the Syrian border.  The company headquarters are located in Ankara.  Nigel's main role was representing two investor companies and also dealing with financial matters.  This involved negotiations with the lead arranging banks leading a 45 bank syndicate providing facilities in excess of € 800 million.

Previously, Nigel Hawke had provided advice to the Board during construction and assisted with managing the relationship with the lead arranging banks in London. which included the need to re-position the facilities, unusually to cater for a lower amount drawn than forecast.

The Birecik Dam project was one of the first BOT projects launched by the Turkish Government.  Finance was arranged on a favourable basis both for the Turkish Government who now benefit from a financing cost structure that would not be capable of being duplicated to-day.  The sponsors injected a relatively low level of equity with a guaranteed return and obtain redemption of equity from the project itself. Four export credit agencies from Germany, Belgium, Austria and France support the finance together with substantial commercial debt from the banks.  The Turkish State is also an investor via State owned companies.

Although the project took a number of years to reach financial closure, during construction significant cost savings were made due partly to good financial planning and hedging of interest costs.  Costs were € 175 million lower than budget.  This enabled a lower tariff to be quoted to the Turkish Authorities who thereby benefited from the cost savings.  The financing should be repaid during the first 10 years of operation and is currently on schedule.

Construction started in April 1996, the dam was completed by the German, Austrian and Turkish contractors in April 2000 and impounding (reservoir filling) was completed by September 2000. First generation commenced ahead of schedule in October 2000 rising to full generation by October 2001. 

This was despite major archaeological findings during dam impounding.  The sensitive handling of this issue by the local senior management of the project, together with the Turkish authorities, enabled a good investigation to be completed in record time. Important and beautiful Roman mosaics were rescued and the site conserved for further analysis by future generations.

The project has become a major power supplier for Turkey on a highly competitive price basis.

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