Company News   General

7/13/2016

Disclosures Made by Akenerji General Manager Danışman

General Manager of Akenerji Elektrik Üretim A.Ş. Ahmet Ümit Danışman: “The state may have to give more support to encourage the investments of the private sector in a climate when the market is narrowing as a result of borrowing in foreign currency and due to over-supply. Otherwise, I do not think that the private sector will consider taking risks with investments which are costly and which will pay off in the long term such as lignite in particular, without any purchase guarantees in terms of foreign currency in prevailing market conditions.”

General Manager of Akenerji Elektrik Üretim A.Ş. Ahmet Ümit Danışman, which is one of the prominent actors of the energy sector in Turkey made an evaluation on the sector underlining the importance of purchase guarantees to be able to continue with investments.

Danışman said, “We presently expect the private sector to increase investments in renewable energy resources with condition of purchase guarantees in foreign currency due to exchange rate risks and over-supply.”

Danışman commenting on the consideration of local lignite reserves in Turkey as a new solution in the energy sector, made the following statement:

“The state may have to give more support to encourage the investments of the private sector in a climate when the market is narrowing as a result of borrowing in foreign currency and due to over-supply. Otherwise, I do not think that the private sector will consider taking risks with investments which are costly and which will pay off in the long term such as lignite in particular, without any purchase guarantees in terms of foreign currency in prevailing market conditions. Still, focusing on lignite operated power plants is an important step in the utilization of national resources and curbing foreign dependence in energy. However, the support of the state is a must to encourage such investments by the private sector in a climate when the market is narrowing. Also, Turkey has to consider international stipulations such as the Paris Climate Agreement signed by Turkey when focusing on coal”.

“Natural gas prices should be reflected to electricity prices”

Danışman stating that a fair and transparent market has to be constituted for everyone to encourage private sector investments, underlined the necessity of the reflection of hikes and falls in natural gas prices to electricity prices.

Danışman noting that the investor may undertake market risks knowing that changing price trends are reflected to tariffs, said “However, if increases or decreases in fuel prices which constitute the major cost item of the investor are not reflected to pocket prices, this will be a drawback for willingness to take risks”.

Danışman stating that the main factor affecting the rapid increases in energy investments in 2008 was the implementation of the automatic price mechanism, commented as follows: “Of course, the supply & demand balance is the most important factor. All in all, there has to be a market where you will be able to sell your product. But, there also has to be a mechanism where you will be able to foresee the costs and the selling price of a product. The leg to stand on for an investor is the automatic price mechanism, when there are no purchase guarantees in terms of foreign currency”.

Danışman emphasizing that a liberal and fair market, an automatic price mechanism and principles such as productivity and high technology are essential for the investor to find the suitable climate, made the following statement: “The method of a single buyer remains as the only alternative in an environment where there are no purchase guarantees or where liberal market conditions do not exist”.