Infrastructure and Logistics

ENERGY INFRASTRUCTURE

1. Energy Strategy

Turkey's strategy in the energy sector is to provide consumers with security and higher service quality.
In addition to unused energy resources such as hydraulic power and lignite, Turkey's renewable energy potential is a great opportunity for investors. The Law on Utilization of Renewable Energy Sources for the Purpose of Generating Electrical Energy (No. 5346) dated May 10, 2005 encourages these types of investments and makes them even more attractive.

Energy Infrastructure	Unit	2009
Primary Energy
Production	BTEP		29,257
Consumption	BTEP		105,236
Per Capita Consumption	KEP		1,496
Electricity
Installed Capacity	MW		45,502
Thermal	MW		29,603
Hydraulic & Geothermal & Wind	MW		15,899
Generation (Gross)	GWh		194,813
Thermal	GWh		156,923
Hydraulic & Geothermal & Wind	GWh		37,889
Import	GWh		812
Export	GWh		1,546
Consumption (Gross)	GWh		194,079
Per Capita Consumption (Gross)	KWh		2,660
BTEP: Billion Tons Equivalent Petroleum KEP: Kilogram Equivalent Petroleum GWh: Gigawatt Hour Source: Ministry of Energy and Natural Resources & Turkish Electricity Transmission Company (TEIAS)

1.a. The Distribution of Installed Capacity by Electric Utilities (2009)

Source: Electricity Generation Co. Inc. (EUAS)

1.b. The Distribution of Installed Capacity byPrimary Energy Resources (2009)

Source: Turkish Electricity Transmission Company (TEIAS)

1.c. Industrial Electricity Prices* in Turkey and the EU

Source: Statistical Office of the European Commission (Eurostat)
*Euro / kWh, for consumers with 2,000 MWh-20,000 MWh of annual consumption, 2nd half of 2009

1.d. Pipeline Projects in Turkey

Turkey's priority is to secure its energy resources. In order to achieve this goal, Turkey is carrying out many pipeline projects for both natural gas and oil. Once they are completed, the following projects will provide secure energy resources for both Turkey and Europe.

Source: Petroleum Pipeline Corporation (BOTAS)

Baku-Tbilisi-Ceyhan* COPL Project
Turkey-Greece-Italy NGTL Project (ITGI)
Transcaspian Turkmenistan-Turkey Europe NGTL Project
Azerbaijan-Turkey NGTL Project
Iraq-Turkey NGTL Project
Egypt-Turkey NGTL Project
Turkey-Bulgaria-Romania-Hungary-Austria NGTL Project (Nabucco Project)
Eastern Black Sea NGTL
Western Black Sea Project
Natural Gas Underground Storage Project

*Construction of the Baku-Tbilisi-Ceyhan COPL was completed in 2005. The annual carriage capacity of this pipeline is 50 million tons of crude oil. It is an internationally recognized facility which transports Caspian crude oil to the Mediterranean region via Turkey.

2. Telecommunications Infrastructure

Telecommunications Infrastructure
Mobile Telephone Subscribers	63 million
PSTN Capacity*	23 million
Internet Users	30 million
Broadband Subscribers	7 million
*Public Switched Telephone Network
Source: Ministry of Transport and Communication (2009)

Communication Technology (voice and data) (0: Does not meet business requirements - 10: Meets business requirements)
Turkey	7.94*
UK	7.84
Greece	7.19
Bulgaria	6.93
Poland	6.68
Ukraine	6.29
Ireland	5.63
Source: IMD World Competitiveness Yearbook 2010

* Communications technology (voice and data) meets business requirements.

The telecommunications sector in Turkey has evolved considerably in recent years, starting with the privatization of 55 percent of Turk Telekom stocks. The diversification of services within the telecommunications sector via mobile phones and the Internet has created new economies that form attractive areas for further investments.

3. Transportation Infrastructure

Transportation Infrastructure	2009
Air Passengers	85.5 million
Airports	45 (13 international)
Highway	64,319 km
Railway	10,984 km
Seaport Handling Capacity	309.4 million tons/year
Air Cargo Capacity	1.7 million tons/year
Source: Ministry of Transport and Communication

Airports in Turkey

Turkey's advantages include its logistics industry, which has developed significantly since its entry into the EU Customs Union. Its geographic, physical and corporate infrastructure is one of the key attractions for potential investors, as seen below:

The length of divided multi-lane highways surpassed 31,000 km by the end of 2009.
In order to develop a more efficient railway transport infrastructure, the five-year plan, covering the period 2007-2013, aims to renew 1,000 km and construct 938 km of railroad.
In 2009, international flight passenger traffic reached 44.3 million. Domestic flight passenger traffic exceeded 41 million, with an annual average increase of 7.6 percent in the last year.
Turkey's proximity to major markets such as the CIS, the Middle East and North Africa means that approx. 1.5 billion consumers can be easily reached.
Important reductions in airline costs and price levels were made possible by rescinding a Special Consumption Tax on aircraft fuel. Accordingly, six firms have started domestic operations in the last few years to meet the increasing demand for air travel.
Turkey has a pivotal role in connecting Pan-European transport corridors to Central Asia. Additionally, the Mediterranean basin, to which Turkey is a natural conduit, has gained greater prominence in both East-West and North-South connections.
The national road and railroad networks are completely integrated into the Eurasian infrastructure. The Silk Road Railway project will ensure a uniform rail route between Europe, the Middle East, the Turkic republics, and the Far East through Turkey. Regular truck transportation and Ro-Ro ferry routes are continuing to increase logistic services capacity.
Two important natural gas transport projects to Europe have been initiated. The first one is the "Interconnector", developed by Turkey, Greece and Italy; the Turkey-Greece section is already complete and transporting natural gas to Greece, while the Greece-Italy section is under construction. The second one is the "Nabucco" project, which will deliver natural gas across Turkey to the European markets by connecting the Caspian region and the Middle East, via Turkey, Bulgaria, Romania and Hungary, with Austria, and further on, with the Central and Western European gas markets.

Turkey meets the requirements for the efficient and cost-effective shipment of goods with its high performance infrastructure, reliable transportation services and strategic location in the region.

Efficiency in the Distribution Infrastructure of Goods and Services (0: Inefficient – 10: Efficient)
Turkey	6.83
Poland	6.65
Croatia	5.65
Romania	5.62
Italy	5.40
Bulgaria	5.33
Ukraine	4.40
Russian Federation	4.37
Source: IMD World Competitiveness Yearbook 2010

FAQ

What is the investment policy regarding Turkey's infrastructure of the future? What major infrastructural facilities have been privatized until now? What about the pipeline network and pipeline operations in Turkey?

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