Deal analysis: Turkish limited-recourse first

Author: | Published: 16 Aug 2011

The first limited recourse financing of a gas-fired power plant in the Turkish merchant sector has closed. It has shown that it’s possible to get domestic banks comfortable with accepting construction, merchant and gas supply risk in a market undergoing liberalisation.

The 865MW gas-fired combined cycle power plant in Gebze, near Istanbul, reached financial close on July 12. Four domestic Turkish banks provided the financing, which consisted of a $700 million term loan facility and an $80 million letter of guarantee facility.

The plant was constructed under a engineering, procurement and construction (EPC) contract was signed under English law. The regulatory framework was structured under Turkish law.

Regulatory approvals were required from Turkey’s Energy...