UPDATE – Turkey signs equipment, engineering pacts for 1,200-MW Ilisu

On the heels of a 1.2 billion euro (US$1.64 billion) multi-national loan agreement, Turkey signed supply and engineering contracts August 15 for construction of the 1,200-MW Ilisu hydroelectric project.

Turkey’s General Directorate of State Hydraulic Works (DSi) signed agreements worth 530 million euros (US$711.4 million) with a European consortium of Andritz VA Tech Hydro, Alstom, Ed. Zublin AG, Stucky, Colenco, and Maggia. VA Tech Hydro said its share totaled 235 million euros (US$315.4 million).

Turkey earlier signed the loan agreement with Swiss, German, French, Austrian, and Turkish financiers for Ilisu, one of Turkey’s largest and most controversial dams. (HNN 8/15/07)

The proposed dam, 45 kilometers from Turkey’s border with Syria, is set for completion in 2014 along with the power plant, which is to produce 3.8 billion kilowatt-hours annually. The project also includes a water storage facility of 11 billion cubic meters. Turkey started work on Ilisu in August 2006 on the Tigris River.

Ilisu is part of the Southeast Anatolia Project, a US$32 billion plan to develop the country’s economically backward southeast and east. However, Ilisu will put about 80 villages and hamlets under water as well as submerge the remains of the ancient city of Hasankeyf. It has been hotly debated in Turkey and fiercely criticized by environmental activists.

“This has been one of the most difficult projects,” Energy Minister Hilmi Guler said. �… This has been a project of honor, pride, and determination.�

The government signed a 25 million euro (US$33.8 million) credit to relocate the remains of the ancient city, which dates to Roman times when it was built as a bulwark against the Persians.

The European consortium offered its credit with the condition Ankara fulfill some 150 criteria that cover issues such as environmental protection, relocation of villagers, protection of cultural heritage, and resource management with neighboring states.

Last year, the Swiss government gave approval for the Swiss Export Credit Agency to guarantee export risks of Alstom Switzerland, Maggia, Stucky, and Colenco to provide goods and engineering services worth 225 million francs (US$184.6 million). (HNN 12/20/06) Employing standards of the Organization for Economic Cooperation and Development (OECD) and the World Bank, the Swiss said they established more than 100 criteria for the project.

�Compliance will be monitored by an independent international commission implemented by the export credit agencies,� Andritz VA Tech Hydro said. �Thus, the project meets the high western standards of OECD and the World Bank.�

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