Information on the Target

InfraMed holds a 25% stake in Hamitabat, a cutting-edge combined-cycle natural gas turbine power plant located in Lüleburgaz, Kırklareli, approximately 180 kilometers northwest of Istanbul. Hamitabat was originally established in 1985 as Turkey's first natural gas power plant and has since undergone significant upgrades to enhance its operational capacity and efficiency. The majority ownership of 75% is held by InfraMed's partner, Limak Yatirim, which acquired the plant in 2013.

Following its acquisition, Limak Yatirim executed a comprehensive modernization project, culminating in the plant's reopening in 2017. The modernization introduced two Siemens H-class turbines, resulting in a substantial capacity increase to 1,220 megawatts (MW) and an impressive operational efficiency of 60%. This advancement positions Hamitabat as the most efficient gas-fired power producer in Turkey.

Industry Overview in Turkey

The natural gas sector in Turkey has experienced notable growth over the past few decades, driven by an increasing demand for cleaner energy sources and the government's efforts to reduce its reliance on coal and other fossil fuels. The Turkish government has implemented various policies to attract investments in power generation, particularly in the renewable and natural gas sectors. This shift not only facilitates energy diversification but also aims to enhance energy security for the country.

Nevertheless, the sector has its challenges, including fluctuations in global gas prices and geopolitical factors that can impact supply chain stability. Additionally, competition among domestic and international players is growing, which necessitates continued innovation and investment in advanced technologies to maintain competitive advantages.

One of the significant developments in the Turkish energy landscape is the increased efficiency of natural gas power plants. As part of this transition, the country has gradually been adopting more sophisticated technologies that enable higher thermal efficiencies and reduced emissions. The rising demand for electricity, particularly from industrial and residential sectors, has further reinforced the need for reliable and efficient power sources.

The Rationale Behind the Deal

InfraMed's decision to sell its stake in Hamitabat in 2023 can be attributed to various strategic considerations. The modernization and subsequent increase in efficiency and capacity of the plant have significantly enhanced its market valuation, presenting an attractive opportunity for divestment. The growing demand for efficient power solutions in Turkey also presented a favorable market environment for the sale.

Furthermore, the deal aligns with InfraMed's broader investment strategy to focus on assets with high growth potential and favorable returns. By divesting from Hamitabat, InfraMed may allocate resources to new opportunities that promise greater long-term growth prospects.

Information About the Investor

InfraMed is a private equity firm specializing in infrastructure investments across the Middle East and North Africa, with a particular emphasis on energy, transportation, and telecommunications sectors. The firm is known for its commitment to promoting sustainable development through investments that align with environmental standards and social governance.

With a track record of successful investments, InfraMed collaborates with key partners, such as Limak Yatirim, to harness local expertise and enhance operational efficiencies within the assets they manage. The firm's investment approach is characterized by thorough due diligence and a strategic alignment with market trends to drive value creation.

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The sale of Hamitabat by InfraMed represents a strategically astute financial decision, capitalizing on the asset's increased valuation following significant modernization. From an investment perspective, the exit appears favorable, given the robust demand for energy in Turkey and the government's continued support for natural gas transitions.

However, potential investors should consider the inherent risks associated with the Turkish energy market, including volatility in fuel prices and regulatory changes that could impact profitability. While the asset's current efficiency and capacity position it well within the market, these external factors could influence future operational stability.

Moreover, this deal reflects a trend in the energy sector where firms are increasingly valuing efficiency and sustainable practices. This shift could prompt future investments in similar high-efficiency assets, offering a more secure footing in evolving energy markets.

Overall, InfraMed's divestment from Hamitabat can be viewed as a strategic maneuver to optimize its portfolio while continuing to focus on high-growth opportunities, illustrating a thoughtful approach in navigating the complexities of the energy landscape.

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