Target Company Overview

Uludağ Elektrik Dağıtım A.Ş. and Limak Uludağ Perakende Elektrik Satış A.Ş., collectively referred to as 'Uludağ Elektrik Companies,' are engaged in electricity distribution and retail operations in the Uludağ region, encompassing the provinces of Bursa, Balıkesir, Çanakkale, and Yalova. Both companies are wholly owned by Uluğ Enerji Dağıtım ve Perakende Satış Hizmetleri A.Ş. The recent transaction involves the complete transfer of Uluğ's shares.

Industry Overview in Turkey

The Turkish electricity market has been undergoing significant reforms aimed at liberalizing and enhancing competition. The sector is characterized by a growing demand for electricity, spurred by industrialization and urbanization. Over the past decade, Turkey's electricity generation capacity has expanded rapidly, with an increasing share coming from renewable sources, reflecting the country’s commitment to a sustainable energy future.

Despite experiencing rapid growth, the Turkish electricity distribution sector faces challenges, such as the need for modernization of infrastructure and the integration of smart grid technologies. The regulatory framework has also evolved, with the Energy Regulatory Authority emphasizing the importance of private investment in the sector to meet both energy demand and sustainability goals.

Foreign investment in Turkey's energy sector has gained momentum, especially from institutions focused on sustainable infrastructure. The entrance of international players, such as Actis, signifies strong interest in Turkey's existing potential as a safe investment hub and the anticipated development in the infrastructure landscape.

Rationale Behind the Deal

This transaction reflects an increasing trend of foreign investment in Turkey’s energy sector, highlighting confidence in the country's infrastructure potential. Limak Yatırım's Chairman, Ebru Özdemir, emphasized that this agreement serves as an indication of foreign investors' interest in Turkey, positioning the nation as a secure investment destination in energy.

The proceeds from this sale are expected to be reinvested into Limak Group's ongoing projects within the country, which further underscores the commitment to advancing local infrastructure and enhancing energy services amidst a backdrop of strong market demand.

Investor Background

Actis is a leading sustainable infrastructure investment fund with a presence in 18 countries globally. Since its establishment, the firm has raised $24 billion from investors to support its initiatives, impacting more than 40 million people through its extensive portfolio. With over 24 GW of installed capacity in the energy sector, Actis has established itself as a significant player in the global energy market.

The firm is recognized for its strategic investments that align with sustainable development, focusing on creating long-term value while contributing to the transition to low-carbon economies. Its entry into the Turkish market demonstrates its commitment to expanding its footprint in emerging markets.

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This transaction represents a potential strategic win for both Actis and Limak Yatırım. By capitalizing on the growing demand for energy in Turkey, Actis can leverage its expertise in sustainable infrastructure investments to drive operational efficiencies and enhance service delivery in the electricity sector.

From an investment perspective, this deal signals a positive outlook, as it reflects a broader trend of increasing foreign investments in Turkey. Moreover, the growing emphasis on sustainable energy solutions aligns well with Actis' portfolio, potentially enhancing its competitive advantage in a rapidly evolving market.

Furthermore, the commitment from Limak to reinvest the proceeds into local projects demonstrates a dedication to long-term growth and stability within the Turkish energy landscape. This strategic move is likely to attract further investments and foster an environment conducive to innovation and infrastructure development.

In conclusion, this deal not only marks a significant milestone for both parties involved but also reinforces the viability of Turkey as an attractive destination for international investors looking to make impactful contributions to the energy sector.

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