Turkey Faces Ticking Bomb With Energy Loans of $51 Billion

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Confronted with a plunging lira, Turkey’s central bank last month urged the general public to borrow in the currency in which they are paid. That warning came too late for the country’s energy companies, Bloomberg News reported. Turkish power producers are emerging as one of the biggest risks to the nation’s banks after they plowed billions of dollars into new power generation, distribution projects and deals over the past 15 years. Now, with the lira depreciating faster than they can raise electricity prices, some utilities earn less per year than what they have to repay in foreign-currency loans, according to the Ankara-based Electricity Producers’ Association. Their predicament highlights the far-reaching impact of the lira’s 69 percent slump against the dollar since the beginning of 2010 as President Recep Tayyip Erdogan moves his country toward authoritarianism. Read more.