PALEN

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Istanbul-based Palen Enerji Dogal Gaz Dagitim Endustri ve Ticaret Anonim Sirketi (Palen) was an incorporated joint stock company that was created on October 22, 2003 to develop, construct and operate a natural gas distribution system in the city of Erzurum, located in eastern Turkey. The tender was called by the Turkish Energy Market Regulatory Authority (EPDK). The project was to involve the construction of medium and low pressure gas distribution pipelines throughout the city and the connection of residential, commercial and industrial consumers in the license areas, primarily in the first three years of the 30-year license. BOTAS, the state-owned oil and gas company, was to supply natural gas to the project. Palen was 89% owned by Palmet and an aggregate of 10% by the Erzurum (9.5%) and Ilica (0.5%) municipalities, with the balance owned by three Palmet employees. Palmet, in turn, was a privately owned project management and construction/contracting company founded in 1984, with approximately 84% of its shares owned by its founder, main shareholder and general manager, Mr. Doganay Samuary. The total project cost was estimated at US$13.6 million. In May of 2005, the IFC committed investment consisting of a US$2.0 million A loan for IFC’s own account. A stand-by loan of US$5.0 million to Palmet was also granted for future gas distribution licenses. The project was completed in late 2004. Closed in '05. None