Turkcell Accelerates Investments in Renewable Energy: Turkcell Enerji Signs Share Transfer Agreement to Acquire İzmir Karadağ Wind Power Plant

Rhea-AI Summary

Turkcell (NYSE:TKC) has signed a share transfer agreement to acquire Boyut Grup Enerji, owner of the İzmir Karadağ Wind Power Plant, as part of its strategy to meet electricity demand from renewables by 2030 and achieve carbon neutrality by 2050. The acquisition has an enterprise value of US$29.6 million, with a payment of US$11.5 million after net debt adjustments. The wind power plant has an 18 MW capacity, annual generation of 67.5 GWh, and can supply electricity for around 22,500 homes. This aligns with Turkcell's commitment to sustainability and renewable energy investments.

Positive

• Acquisition of Boyut Grup Enerji enhances Turkcell's renewable energy portfolio.
• Karadağ Wind Power Plant has a potential annual gross revenue of approximately US$5 million.
• Acquisition aligns with Turkcell's sustainability goals and carbon neutrality targets.

Negative

• US$11.5 million cash payment could impact cash reserves.
• Dependence on governmental approvals could delay acquisition finalization.

In line with the target of meeting its electricity demand from renewables by 2030 and becoming a carbon neutral company by 2050, Turkcell (NYSE:TKC) (BIST:TCELL) has signed a share transfer agreement to acquire Boyut Grup Enerji, which owns the İzmir Karadağ Wind Power Plant. The transfer of shares is subject to the approval of respective authorities and fulfillment of various conditions precedent.

Turkcell CEO Murat Erkan stated the following in relation to the Karadağ Wind Power Plant acquisition:

“In line with our sustainability approach, we continue to lead investments in renewable energy and target to become a company meeting its electricity need from eco-friendly resources. In accordance with this target, the energy we generated with the self-consumption model in 2020 reached a level equivalent to the annual consumption of 1,230 residences. In Northern Cyprus, Turkcell Group’s first solar power plant generates 1.2 million kWh of electricity annually and prevents 448 tons of carbon dioxide emissions. Meanwhile, the Ankara Data Center, the first in Turkey to generate its own energy via solar panels, produces 300,000 kWh of electricity annually. Furthermore, through solar power investments in our Adana Plaza, Diyarbakır Plaza and Çorlu Data Center, we have reached the capacity to generate 730,000 kWh of energy annually. Going forward, we will continue to invest in projects with respect to renewable energy generation.”

Murat Erkan pointed out the high production efficiency of Karadağ Wind Power Plant, and that this acquisition would contribute to Turkcell’s focus on sustainability and minimize its environmental footprint.

Erkan stated that the power plant commenced operations in 2016 holding a license that will expire in 2057, and concluded that:

“Turkcell Enerji, operating under the Enerjicell brand, serves individual and corporate customers in Turkey, who are eligible to choose their own electricity suppliers. In addition to our investments in renewable energy and power plants, we also continue to utilize eco-friendly methods through trading with green energy companies. Going forward, we will continue to invest in renewable energy through Turkcell Enerji Çözümleri and make Turkcell a carbon neutral company that uses electricity generated from eco-friendly resources.”

For the acquisition of Boyut Grup Enerji, an enterprise value (EV) of US$ 29.6 million has been determined. After adjusting for the net debt of Boyut Grup Enerji, Turkcell shall make a payment of US$ 11.5 million. According to the Turkcell statement, Karadağ Wind Power Plant has an 18 MW installed capacity as well as an annual electricity generation capacity of 67.5 GWh, and thereby has the potential to meet the annual electricity need of approximately 22,500 houses. The plant has state purchase guarantee until the end of 2026. The anticipated annual gross revenue of the plant during 2021-2026 period is approximately US$ 5 million.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210707005361/en/

FAQ

What is the strategic purpose of Turkcell's acquisition of Boyut Grup Enerji?

The acquisition aims to enhance Turkcell's renewable energy capabilities and support its sustainability goals.

What is the value of the acquisition of the Karadağ Wind Power Plant?

The acquisition has an enterprise value of US$29.6 million, with a payment of US$11.5 million after net debt adjustments.

What is the electricity generation capacity of the Karadağ Wind Power Plant?

The plant has an installed capacity of 18 MW and an annual generation capacity of 67.5 GWh.

How many homes can the Karadağ Wind Power Plant supply electricity to?

It has the potential to meet the annual electricity needs of approximately 22,500 houses.

What are Turkcell's future plans regarding renewable energy?

Turkcell plans to continue investing in renewable energy projects and aims to become a carbon neutral company by 2050.