TURKEY-U.S. ENERGY DIALOGUE POTENTIAL NEXT STEP

UNCLAS ANKARA 001039

SIPDIS

USDOE FOR CHUCK WASHINGTON AND ROBERT DIXON
USDOC FOR 4212/ITA/MAC/OEURA/CPD/DDEFALCO

E.O. 12958: N/A
TAGS: ENRG EPET TU
SUBJECT: TURKEY-U.S. ENERGY DIALOGUE POTENTIAL NEXT STEP

REF: ANKARA 886


1. SUMMARY: Turkey Energy Deputy Under Secretary Selahattin
Cimen looks to DOE for an invitation and potential dates to
send a Turkish team of officials and experts to the U.S. He
said Turkey was interested in joining the Hydrogen
partnership (IPHE). End Summary.

Proposal to Send a Turkish Team to the U.S.
--------------


2. In a February 23 meeting with Energy Officer, Energy
Deputy Under Secretary Selahattin Cimen expressed interest in
organizing a team of 5-6 Turkish officials and experts to
travel to the U.S. He said that with the new Secretary of
Energy in place he was eager to move forward with the idea,
hoping to receive an official invitation and proposal of
dates from DOE. Cimen envisioned himself leading the team,
consisting of experts and high level officials, with the aim
of exchanging knowledge and experience. The team would also
be empowered to reach concrete agreements with American
counterparts. He said he had spoken with a number if
potential participants:

-Director General of the Electric Power Resources Survey and
Development Administration (EIEI) - (for energy efficiency
issues).
-Director of the new Boron Research Institute (Note: Turkey
holds 64 % of the world's reserves of boron, which has
applications in energy storage and fuel batteries and
potential applications in the hydrogen economy. End note.)
-Expert from Turkey Science and Research Center (TUBITAK).
-a few other experts, including potentially one mining expert.

Interested in Hydrogen Partnership
--------------


3. Cimen said that Turkey was interested in pursuing
membership in the International Partnership for the Hydrogen
Economy (IPHE). He was interested in more information on
joining and membership process, road map, and expectations.

Progress on Liberalization in Spite of Delays
--------------


4. Cimen outlined what he described as Turkey's steady
progress on energy sector liberalization. While noting some
inevitable delays, he underlined the importance of concrete
steps taken and the private sector's continuing interest.
For example, he expected that electricity distribution
privatization tenders would be delayed by a few months to
June or July to give the GOT time to finalize decisions and
underlying legislation on privatization methodology. He said
the World Bank had offered a useful compromise between pure
asset sale (supported by the Energy Ministry) and modified
Transfer of Operating Rights (supported by the Privatization
Authority),taking into account potential investor views.
Cimen said that privatization of electricity generation
capacity would follow a parallel process to provide for new
investment needed to bring on new capacity in 2009-2010.
Cimen emphasized that the GOT would take into account both
new private investment needs while working with existing
investors benefiting from government guaranteed returns (see
Reftel for update of BOT issue). He also noted that the
Energy regulatory body (EMRA) was spearheading privatization
of natural gas distribution. Cimen stated that the tender
for transfer of BOTAS gas import contracts had been delayed,
but there was significant interest.
EDELMAN