Apart from the legal reforms and establishment of an energy
exchange, privatizations are one of the energy market
liberalization stages. Due to the reforms in electricity, oil and
gas markets since 2001, Turkish energy market has been in a
restructuring and development period.
The restructuring of the electricity market has been started
with the demerger of TEK into TEAŞ and TEDAŞ in 1993. The
electricity manufacturing, transmission, distribution and trade
activities have been separated and the local power distribution
companies have been privatized to a large extent in form of block
sale according to the Privatization Law No. 4046 since 2001. After
the Electricity Market Law No. 4628 has entered into force in 2001,
the Higher Plannig Council has published the Electricity Market
Privatization Strategy Report in 2004 which intends to start the
privatizations in electricity market within electricity
distribution on the purpose of giving confidence to investors for
the new manufacturing investments. Within the frame of
privatization of power manufacturing assets, privatization of
several small and large - scale power plants have been finalized
and at present, several power plants' privatization processes
are ongoing. As of 2012, distribution and retail sale activities
have been separated and most activities except transmission have
been allowed to private companies according to the New Electricity
Market Law dated 2013. Within this law, the privatization of
EÜAŞ and TEDAŞ have also been regulated. However,
the power transmission is still a state-owned monopoly.
Pursuant to the IX. Development Plan of State Planning
Organization, the main philosophy and target of privatizations in
the electricity market is to provide and to increase the security
and quality of energy supply, to increase the role of private
companies in investments and reformations in the energy market and
to establish a competitive market. Accordingly, a revenue-oriented
privatization policy has not been implemented.
Natural gas market
The market share of private companies have been extended in most
of market activities year by year and privatizations in local
distribution have been finalized to a large extent. Currently, the
Draft of the New Natural Gas Market is topical in Turkish natural
gas market. In the event that this law enters into force, the
market share of BOTAŞ will be minimized through its unbundling
and these unbundling processes shall be conducted by the
Privatization Administration. After entering of the New Natural Gas
Market Law into force, the privatization processes of
İGDAŞ will come to the fore. Several potential investors
in private sector have already declared that they were interested
in this transaction.
Control of privatizations in terms of the competition law
In terms of the privatization processes, it is important that
the privatization shall not influence the competition in the
related market in a negative way. As is known, acquisition of a
legal entity in a way that this acquisition creates a dominant
position for purchaser which influences the competition in the
related market negatively is not allowed according to the Law on
the Protection of Competition with No. 4054. Therefore, the
privatizations in form of acquisition are subject to analysis of
the Competition Authority regarding the competitive risks before
and after their fulfilment. Moreover, privatizations in electricity
and natural gas markets have also been analysed by the Competition
Authority with regard to competition risks arising from the
implementation of several market activities in one institution.
It is certain that public authorities' control in energy
market has not been completely abolished despite the
privatizations. In contrary to that, public authorities have
obtained the position of energy market regulator. In this regard,
the restructuring of public authorities have also been required.
Moreover, as intended by laws and regulations, the increase and
encouragement of private sector investments in energy market play
an important role and a control mechanism which is to be
established by the state will be required before, during and after
these transactions. However, on the way of Turkish Energy
Market's liberalization, the privatizations contribute to new
investment opportunities for private sector companies and to
increase the number of market players.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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