PALGAZ

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Palgaz Dogal Gaz Dagitim Sanayi ve Ticaret Anonim Sirketi (Palgaz) was an incorporated joint stock company that was created on December 10, 2003 to develop, construct and operate a natural gas distribution system in the city of Gebze, located outside of Istanbul, Turkey. The tender was called by the Turkish Energy Market Regulatory Authority (EPDK). Palgaz won the tender by bidding the lowest price of US$0.052 (0.046 euro) for the distribution of one kWh of natural gas. The project was to involve the construction of medium and low pressure gas distribution pipelines throughout the city and connecting 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. Palgaz was 89% owned by Palmet and an aggregate of 10% by the municipalities of Gebze, Tavsancil, Darica, Sekerpinar, Dilovasi and Caryirova, and 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$21.2 million. In May of 2005, IFC committed investment of a US$5.0 million A loan for IFC’s own account. A stand-by loan of US$5.0 million to Palmet was also awarded for future gas distribution licenses. Closed in '05 None