Public procurement vs PPP

Besides the traditional public procurement strategy of the Turkish Government, PPP structures are becoming significantly important for the infrastructure investments for more than a decade in Turkey. The Government aims to reduce the initial financial burden of CP&I investments as well as to create the most appropriate risk allocation structure to complete the projects within the planned timeline and the budget. Recently three main PPP structures became prominent; Build-Operate-Transfer ("BOT"), Build- Lease-Transfer ("BLT") and Transfer of Operating Rights ("TOR").

Energy Projects

Liberalization process, that started in 2002, is continuing successfully. On the distribution side, privatizations of all regions have been completed in 2013 whereas on the generation business, Turkey's installed capacity increased by more than %140 and reached 78.1 GW in the last 13 years. More than %80 of this capacity increase has been realized by the private sector. In addition to these greenfield investments, projects with a total capacity of 6 GW have been privatized. The total investment cost of the investments realized by private sector is USD 85 bn and thanks to these projects, supply security is no longer a problem for the country. Therefore, Turkish Government aims to focus more on the localization and diversification of the generation mix by realizing renewable, local coal and nuclear projects. In addition to those, privatization of generation assets (mainly hydro power projects) is expected to continue in the following decade. Total deal size of these projects in energy sector including greenfield and brownfield investments is expected to be USD100 bn.

Mega Road and Motorway Projects

The Turkish Government is planning to execute various infrastructure projects especially in roads and motorways with the total expected investment amount of exceeding USD 80 bn including upcoming motorway PPPs (+ 5,000 km) and Istanbul Big Tunnel Project. These projects are mainly planned to be tendered within BOT scheme.

Healthcare Campus Transformation

The Turkish Government initiated a transformation project in 2003 to modernize the public hospitals and expanding their bed capacity through uniting the regional hospitals within one campus. The Turkish Government has an extensive healthcare PPP pipeline with an estimated total capacity of +50.000 beds and total investment cost of well exceeding USD 16 bn. Currently 34 projects are already announced, including already tendered projects and projects under planning.

The projects are tendered/planned to be tendered within BLT scheme specifically implemented for these projects. As of report date 11 projects reached or are about to reach financial close and two of them are expected to commence operations in early 2017.

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