· Domestic market: ZOREN has ~4% share in the Turkish market. Electricity demand
growth is expected to be 2pps higher over GDP growth, therefore, 7-8% growth is
expected in the coming period. However, CFO states that private sector is
not willing to invest in the sector due to weak pricing environment. Delays in
the liberalization process is worrisome since government continues to be price
setter and is willing to bear losses in the market instead of increasing
electricity prices due to political reasons. Currently, spot (DUY) market is
hardly covering NGPP costs. ZOREN sells electricity mainly via trading in the
domestic market. The company keeps the maturity of its bilateral contracts as
short as three months to maintain its flexibility to switch to the spot market
anytime.