China Power Investment Website: Shanghai Electric Power Made Substantial Progress in Turkey Coal-fired Power Plant Project

    On the evening of October 29, Shanghai Electric Power [1.77% funding research report] (600021) issued an announcement, saying that the Turkey EMBA Power Company Limited, which is held by SEP, has received the needed construction license certificates from Turkey’s Energy Regulatory Commission. Asthus, Turkey EMBA Power Company Limited will be allowed to construct the Hunutlu Coal-fired Power Plant. This marks the substantial progress made in the project development.

    Turkey EMBA Power Company Limited was established by SEP, AVIC International Equipment Co., Ltd. and Turkish partners, with each party contributes 50.01%, 2.99% and 47% of capital respectively. Hunutlu Coal-fired Power Plant is the first project developed by EMBA Power Company in the local region. It is expected that this project will have two sets of 660,000 kilowatts ultra-supercritical coal-fired generating plants. Actually, this project witnesses Chinese enterprises’ largest direct investment in the local area since the establishment of diplomatic ties between China and Turkey. Therefore, this project received great support from the Chinese government and National Development and Reform has issued filing documents to this project in March of this year.

    According to Mr. Wang Huaiming, general manager of SEP, Turkey has become one of the world's fastest growing countries over the past decade, and correspondingly, it needs increasingly more electrical power. To ease the power shortage in Turkey, the Turkish government launches the privatization of the power system reform and encourages private and foreign capital investment in its electricity market.

    Wang Huaiming said that Shanghai Electric Power actively develop coal projects in Turkey in response to the national strategy of "going out". This will encourage the export of domestic large-scale thermal power technologies, equipments and labors, and bring more economic benefits as well. In addition, as the first coal-fired power plant invested by Chinese company in Turkey, it will surely make a contribution to the bilateral relations between China and Turkey. Also, Shanghai Electric Power can further develop the energy electricity markets in the European Union and East Africa.

    Statistics show that coal-fired power plant project in Hunutlu has a static investment of $ 1.603 billion, a dynamic investment of $ 1.727 billion and the capital base accounts for 20% of the dynamic investment. Part of the capitals was funded by commercial loans. The calculation shows that for the whole investment, the after-tax internal rate of return will be 13.59%, and the net capital gains rate will be 27.5%.

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