SOCAR signs deal to acquire Gama Enerji power plant in Turkey for $225 mln

BAKU. Dec 23 (Interfax) - The State Oil Company of the Azerbaijani Republic (SOCAR) has signed an agreement with Gama Enerji A.S. to buy a combined-cycle power plant located in central Anatolia.

The agreement was signed within the framework of the second Azerbaijan-Turkey Investment Forum in Baku by SOCAR President Rovshan Najaf and Hakan Ahmad, head of Gama Enerji.

SOCAR will acquire a 100% stake in the power plant, which has installed capacity of 870 MW, for $225 million.

Azerbaijani Prime Minister Ali Asadov said SOCAR was the biggest foreign investor in the Turkish economy with $19 billion to date.

It was reported in May this year that Gama Enerji A.S. received a non-binding offer from SOCAR Turkiye to purchase the plant for $225 million-$250 million and expressed readiness to continue negotiations. Acquiring the plant would allow SOCAR to strengthen its position in the growing Turkish electricity market and would become an alternative method of monetization in conditions of oversupply.

For Gama Enerji, whose portfolio also includes hydro and wind power plants, a potential sale would mean exiting gas-fired generation - a sector with limited profitability due to regulated tariffs.

SOCAR Turkiye Enerji is the owner of a controlling stake (51%) in Petkim Petrokimya Holding. The company also built the STAR oil refinery, a container terminal and a power plant in Turkey, and supplies gas to the domestic market and petroleum products to aircraft refueling points at airports in several major Turkish cities.