From: rritterhoff@woridbank, Sho

Sent: Thursday, February 15, 1:19:24 AM

To: Steven. wradelet@do. reas.gi go 1 '

Ce: Luyen, ng {reas.gov, aroha Mule Gaco trons. gov. jaureen.Grewe@do.treas.gov;
Gene. jo.treas gov; Eliz: Gio tress

Subject: Turkey-- notes from 1/29 conf call wi Jim Parks

Importance: High

{((b)(5)}

00500000001830


((b)(5)]

00500000001553


Clapp, Gene 7

From: rritterhof@worldbank.or
Sent: qusnd March £5, 2001 6:55 PM
0: rs! reas,gov; Gene.Clapp@do.treas.gov
2 oirent SU TNE Ges eas gov; Maureen Grewetuo.1re35.90v;
Luyen. reas.gov
Subject: RE: turkey

[(0)(5)]

Marshall .Mills@do.treas.gov on 03/06/2001 06:29:46 PM

To: RritterhoffeWorldbank .Org
cc: Nilmini.Gunaratne@Do.Treas.Gov, Maureen.Grewe@Do. Treas .Gov,
Marshall -Mills@Do.Treas.Gov

Subject: RE: turkey disbursements

Robin,

{(b)(5)]

Any interesting buzz around the Bank?

00500000001933


Tnrleery Coe Bere */2+fes

[y(5)}

00500000001672


{(b)(5)]

I wanted to make sure you had this information, without pre-judg:

ing
any decision on responding to the action request. I will phonelater today
to follow up.

vvvvY

00500000001514


—— Oe ical evel

Pational or local evel Bijocen” says Me UR0ER.
Ta rurkey, responsibilty TE Scestitutioesl amend:

Boulton

Years after embarking om & yocunm has until now been rights in favour of

Bill fraught path to privat: Tinea by a complex web of agaet sales. It bas also trade excess electricity
Satiom, Turkey is omly just government ‘pureaucracy cogreed with the World Bank, produce at prices datersnitid
to grips with the task ‘and the judiciary. as part of # structural by the market, with the state
ey of regulating markets an Until the landmark leptsi®: teform package, to eschew 15 guaranteeing 10 bay Just 6

30 involves Nowhere is the time 1se artitration was passed if contracts agreed in the past erating capacity.

and adminis:

choice, Greatjon of market reguls- frutive court, had tee final Competitive market model. independent body. This

) banks.

osans ‘But regulation 1s also over Hon of services to the public. Yiberaliged electricity mar,
that ohstecte for

and in companies have sino® tg06 lacks a coherent system the
mprehensive operated wyear GSM securing either a fair deal party oF another.” refiner. Separately, Boras.
licences. The partial geivati for ‘consumers or a level Mr Yigitauden says Tur the state-owned pipeline
yn Investors. sation of Turk ‘Telekom, the playing eld for market par key wil “full compe to bose

nance! . phases. The
hal wen atone ed. thi, sume, thet DTD BF © ‘ereeptian factaed aver the docvestic
o keep growing: will ve sccompauned bY the that ‘market.

i regu
ak latory board. The fivemerm- and

ber body,

and running by Sune ‘za, will whether 8 dea

police both fixed fine and Yurdakul
sect eREY

.
Save tumer fetched at this month's auc operated by the

tion.
“oaneame-uarinel / TAT But it could take up to t¥o tng to

” years
nis Terney regulatory framework for new legal

00500000001735


| The stage is ‘ly being set
for Turkey to realise its
potential as the fourth larg
est market in the world in
terms of forecast energy
‘nvestment, following China,
India and Brazil

Various changes which
have beer set 1p motion will
| make it easier for developers
to secure financing and
shorten the time in which
they do #0.

Turkey's three-year eco-
omic reform programme,
supported by an Interna
tional Monetary Fund (IMF)
stand-by agreement, bas
carned a widespread positive
reaction, although tinted
with 2 wait-and-see element.

The Turkish government
expects that some time dur
ing the second balf of the
year the Wall Street reting
agencies will upgrade the
country's sovereign rating
‘Turkish debt has been suty
investment grade since 1954.
‘This will make borrowing
easter, cheaper and ampler,

Sovereign borrowing has
received & warm welcome,
| which augurs well for pro}
| ect fimancing, Almost half of
the $6tm of the Treasury's
year 2000 borrowing require-
Rent was raised in the first
six wooks of the year.

A mechanism for resorting
to international arbitration
im cases of disputes involv
ing the state has been intro-
duced. This has eliminated a
big concern of financiers.

‘Turkey has reached a com:
prebensive agreemert with
the World Bank which will
reinforce the legal frame-
work, establish an energy
regulstory body, and put a
halt to costly “take or pay"
Geals, The agreement is
expected to be approved by
the World Bank's board of
directors on April 11, leading
to the release of a $750m
loan to underpin economic
reform.

“The most important
aspect of this agreement is
| that Turkey has agreed to
| move much more aggres:
| sively towards real market
energy models,” says Ajay
Chhibber, the bank's coun-
try manager for Turkey. The
transition will be completed

is that mo existing contracts

o 888888

ve 198

Saree CTD

regurding take or pay guar.
antees should be reneged
om,” be says “There are 15
signed “bulkd operate and
transfer’ (BOT) and ‘build
and operate’ projects. They
provide enough capacity f
XG.

“Beyond that, a market
madel will come into opera-
» und the Treasury will
not issue buy-back guaran:
tees, which have saddled
Turkey with expensive
° i"

Mr Chihibber says that am
important change has also
occurred on the distribution
side. In 1997 the government
put to tender electricity dis
tribution rights in key
regions and $24ba in bids
were received. However, the
final transfer of operating
rights has not occurred and
some companies are not
even in the market for
foanee,

Concerning this “the pov
ernment would like to pro
vide time up to the end of
the year to being to financial
closure the distribution
transfer rights,” be says“!
they are not fnanceable
then the gavernment may
exercise its option move
towards new contracts
which will Involve selling
assets outright.”

John McCarthy, general
manager of ING Barings in
Turkey, believes that the
developments kicked aff by
the IMF agreement have cre
ated a positive atmosphere
for project financing, He
says financing will be “muh
tisourced", including bank
Joans and long term flaanc-
ing peowided by export guar
fntee ageacies.

will be

There
Increased trend towards prt
vate insurers for political
risk cowerage for the purvly
Turkish portions.” says Mr

McCarthy. "A trend wil
develop towards the use of
project bonds, which has
never been dome in Turkey
before, There ts a need for
this because utilities require
seven to 20 year finencing
which commercial banks
cannot finance.”

Pension funds, lured by
generons spreads difficult to
find clsewhere, have already
started stuffing around. Mr
McCarthy predicts that
spreads will come down
“There is a S per cent differ
ent: petween) US bonds
(and Turkish T bills), ‘This
will come Gown, 2 per cent
can be squeezed out.”

According to Ali Alpacar
vice-president of the Chase
Manhattan Bank in Istanbul,
in project financing “we
have moved to a new area.”
Closure periods will come
down to one to two years,
from as many as 10.

There ts a large, hidden
spread in the financing of
projects guaranteed by the
treasury, which makes tt
attractive to financiers.

“The treasury indicates
the interest rate which it
finds acceptable," says Zafer
Kurtul, deputy general man
ager for project financing at
Akbank. “This was LIBOR
plus 225 and 1.50 per cent
arrangement fee. But our
agreement with the contrac
tors was for LIBOR plus 12
per cent. The contractors
paid us the difference, The
Treasury recently
announced that ft will acnegt

Energetic reforms likely
‘to boost investment

As it becomes easier and quicker for developers to secure financing, Turkey is set to
move much more aggressively towards real market energy models

ho more than LIBOR plus
1.75 per cent. Now we change
contractors LIBOR plus 6 per
cent because interest rates
have generally moved
down.”

“{For fmancing] the mar-
ket will decide an the viabtl-
ity of the consortium,” says
Mr McCarthy. “You seed
sophisticated operators.
‘Without that, no backing,
Companies bike Enron will
got access first, No one will
finance those without a
respectable partner.”

Mr Alpacar at Chase
believes that all BOT pro-
jects will secure financing
but the guing may not be as
smooth for the transfer of
operation rights involving
energy distribution. “These
are more problematic,” he
says.” “Although thare ss no
construction risk involved
{as in BOTs), there are ques
tions about how the systems
will work, We have ne prece-
dents. What will the (elec
tricity) tariffs be? What will
the cash flow be like? Per
haps financing will be made
available not to the distritu-
tion company but to the par
ent cumpany Which won the
leence.”

Mr Alpacar believes that

on ienprovement in Turkey's
credit rating could become &
watershed. “When this hap-
pens the cumulative country
limits of banks will increase.
The weight of European
banks, particularly the Ger-
mans, will increase. The
interest of the Gulf banks
will also increase, both
Decause, in general, they
know shout energy, and, in
particular, because their oll
revenues are on the rise.
In future, Turkish banks will
be more invotved in project
financing and they are also
tikely ip future to risk finan
cing projects without # trea
sury guarantee,

“Project financing will
become 15 per cent of our
loan portfolio rather than 10
per cent,” says Mr Kurtul at
Akbank.

“Up to now we choge risk
-free projects by working
exelustvely with the trea-
sury. Por the first time we
are aasesning energy projects
togetber with banks like
Deutsche Bank, Bank of
America. ING, and WestlB.”

00500000001730



{(b)(5)]

Stephen Newhouse

Office af Development Finance
U.S. rtment of State
(202) 647-8968

00500000001483


Stewart, Elizabeth K.

From: Brukoff, Patricia [PBRUKOFF @imf org]
Sent: Monday, January 29, 2001 12:27 PM
To: Pacem K Seen. treas.gov’,, Gene. Clapp@do.treas.gov’; ‘rritterhoff@worldbank.org’,
Ce: Brukof, Patricia; ‘Marsh Miso res gov: mauroan Grewe@do treas.gov’;
“Louelien, Stedman @do.treas.gov'; 'tcrawford@worldban!
Subje RE: FW: Turkish Energy Secior Meeting
{(b)(5))
seer Original Message----~-

Prom: Elizabeth.K.Stewart@do.treas.gov
(mailto:Blizabeth.K.Stewartédo.treas.gov)

Sent: Friday, January 26, 2001 2:23 PM

To: Gene.Clapp@do.treas.gov; rritterhoff@worldbank.org;
Luyen, Tran@do.treas.gov

Ce: PBRUKOPF@imf.org; Marshall .Mills@do.treas.gov;
Maureen.Grewe@do.treas.gov; Louellen.Stedmanedo.treas.gov;
tcrawforde®worldbank.org

Subject: RE: FW: Turkish Energy Sector Meeting

((b)(5)]

----- Original Message~---~-

From: Clapp, Gene

Sent: Friday, January 26, 2001 10:36 AM

To: ‘rritterhofféworldbank.org'; Tran, Luyen

Cc: Clapp, Gene; PBRUKOFF@imf.org; Mills, Marahall; Grewe, Maureen;
Stedman, Louellen; tcrawford@worldbank.org; Stewart, Elizabeth K.
Subject: RE: FW: Turkish Energy Sector Meeting

{(b)(5)}

sceesl Original Message-----

From: rritterhoffeworldbank.org (mailto:rritterhoff@worldbank.org)
Sent: Friday, January 26, 2001 10:20 AM

To: Luyen. Tranéde.treas.gov

Cc: Gene.cl ,treas.gov; PBRUKOFFaimf.org;
Marshall.Mills@de.treas.gov; Maureen.Grewe@do.treas.gov;
Louellen.Stedmanédo.treas.gov; tcrawfordéworldbank.org

Subject: Re: FW: Turkish Bnergy Sector Meeting

Luyen-- As I told Gene, I would be happy to join Bill's 3PM internal meeting

to

00500000001652


this political climate which is quite likely I would fear for
Turkey's future,” wrote Gunduz Aktan in the English-language
Turkish Daily News.

Economist Faruk Selcuk said Dervis must first tackle the
problems of Turkey's frail and overcrowded banking system.
Allegations of corruption in the banking sector prompted investors
to flee the Turkish market in November. Twelve of Turkey's 80 banks
have failed in the past two years.

The government has raised the prices of electricity, gasoline,
natural gas and sugar by 10 percent following the crisis.

Ecevit has said he hopes Turkey can secure $25 billion in aid,
and newspapers have reported the IMF is waiting for Turkey to
assess the damage of the latest crisis before proposing a new loan,

(Copyright 2001 by The Associated Press. All Rights Reserved.)
APTV 03-02-01 1600EST

Copyright (c) 2001 The Associated Press
Received by NewsEDGE/LAN: 3/2/2001 3:55 PM

1
00500000001562


Clapp, Gene

1 2:36 PM

Morcha iilioeae gov; PBRUKOFF @inf org: G Gene ne. Clapp@do tress. gov
Maureen, Grewe@do.treas. gov; Luyen. Tran@o,treas.

Draft Turkey letter - pls clear by tomorrow noon

Turkey Evergy Letter
o12809.00.. Attached is the draft responding to the American-Turkish Council's letter
{already faxed to Marshall & Patty, now faxing to Gene). Please comment/clear
by noon tomorrow.

{See attached file: Turkey Energy Letter 012501.doc)

00500000001908


PRIVATISATION by Leyla | Boult ‘on

WATER by Leyla Boulton

Foreigners watch Private
from the sidelines

Legal disputes have given sal-offs a poor reput
argues that this Jegistation |

Privatisation enjoys a poor
smage in Turkey. It & n0w
trying to fix the picture,
starting with renewed sell
off in Gelds ranging from
telecommunications te trans
port. Held up legal disputes,
privatisation bas not been
allowed to demonstrate its
benefits to the public. Ané
xovernment corruption bas
bean such that many Turks
do not trast promises of
“clear and transparent” pri
vatisation

Potential foreign investors
meanwhile have stood soep-
tically on the sidelines. The
government led by Bdlent
Beewit, the prime minéster
who has a reputation for per
sonal honesty, bas a better
chaace of laying these
doubts to rect than any of its
predecessors.

Accused by trade unbons
of betraying his forseer lant
wing ideuls, Mr Ecevit Bas
bean a late canvert to priver
tisation, He sympathizes
with workers who fear it will
spall job cuts at blonted
stateowned enterprises, But
he supports it 1 eerentisl bo
his government's ambitlous
prowramine to cary Turkay’s
chronically high Inflation
with the support af the Entor
natiogal Monetary Fund.

With its ability to insist om
reforms in return for the dis
bursement of its s4be
standby Joan, the IMF has
been instrumental in pust
ing for timely petwatisation.

A sall-off timetable
Gesiggned to raise §7.5be this
year alone got off to 2 prom
ising start an March 3 when
the government appeared
successfully to auction 2 51
per cent stake in Petrol

chain of petrol statives.. The
stake was sold to a consor.
tium including Isbank, the
country’s biggest banking
and industrial conglomerate.
which, ip association with
different partners, was
awarded an earlier botched
sale af the company in 2988.

‘A public offering of 15 to
2 per cent Im Tupeas, the
state-owned oll refiner, is
taking place this week, the
second big item on the gov
rment’s sell-off agenda
Monday sae tbe Izanck of
sale of two new GSM
licenoes weiet: will generate
about $14bm in new reve
nees for the government
while providing fresh compe

hopes to launch the sale to a
strategic investor of = 20 per
cent of Turk Twhkom, the
fixed-line monopoly reelt
goad to be worth more than
$ifhe, Later in the yoar it
propases to sell a minority
stake im Turkish Airtines,
the national carrier. Over
the next decade, railways
may also beoome ripe for pet
vatisatien
By the end of this year,
Ankara expects to ave fina-
lised deals to transfer the
operating rights fer state
owned power plants and
electricity distribution net-
warks to private operators
Although they are a half:
way house to privatisution,
the government has prom:
ised In future to opt for out
right asset sales. In the
meantime, Gokhan Yardim,
the chairman of Botag, the
ne opera

ating rights {9 operators who
will rehabilitate networks
4oé ran them more effi
cleetly will help cut waste,
whieh loses about 30 per
cent of electricity generated.
Companies must obtain
approval for the revision al
comtracts to incorporate the
new legislation allowing
international arbitration in
pobiie sector contracts.

Added legal difficulties
have bogped down contracts
won by consortia, including
medi groups, such a Dogan
Holding. After the govern
ment awarded electricity dis-
tribution rights for the istan-
bul sea to a consartiam
inchading Dogan, the Danis
tay, the country's highest
adzalmistrative court, last
month relterated is oppast
tion, stating that Dogan was
sneligibte because of a lew
prohibiting companies which
controt more than 10 per
cent of the broadcasting
market from entering into
“any kind of contracting
with the government”
Dogan angoes that its stake
is boss thaw 10 par cent.

Yurdakul Yigitguden,
undersecretary at the minis
try fer energy and natural
resources, says the govern:
ment will axtomatically sup-
port an appeal by Dogan,
since it awarded the contract
in the first place.

Ugur Bayar, the chairman
of the government's privati

ion

in oo way threatans the sale
of Putrol Ofisi evan though
Isbank’s partner Is Dogan.
‘Ome lawyer suggested that 5

would te difficult to argue
that privatisation qualified
as “contracting with the gor-
ernment” if Ankara moved
quickly to sell its remain

shares in Petrol Offs

Tt is wndurstood the gov
ernment intends t0 set] cet
shares still owned by the
sate In two or three
trasches, once a petvate see
tor operutor has restructured
the company and made its
stares more valuable

Bes evn if Ankara soets
out remaining legal obsta-
cine to privatisation, two fur
ther quosticns rumain. The
first has to do with the pov
ernment's preparedness to
relinquish control of state:
awned enterprises after
ceding minority stakes in
them.

Only Petret Ofsi will soe
the transfer of a cootralling
stale to new owners, with
ane official explaining that
the company would other
wise prove unsellable. It ts
hard to avoid tive iimpeeasion
that the gorurnment mes
privatisation primarily as a
revenue-raising exerctse,
since mone of the peocouds
will be ploughed back
the companies.

‘The government bas also
done little to explain either
to the greeral public or to
the workers of the compe:
nine exarmrianel for sabe watt
is int ft fot them,

The ether question com.
cerns the extent to which
Turkey will encourage for
eign investors to acquire
assets as they are privatised.
Ir set a 42 per cent restric
thee on foreign ownership of
the GSM liveness, and all
consortia bedding for the
Iheanees combine foreign
telecom operntors with pow:
trful domestic conglomer
ates that have no expertise
In. teleoommuanicatons.

Fatih Yurdal, the outgoing

meral manager of Turk
Telekom, says there will be
no such restriction on con-
sorta biking for the 2) per
cant strategic stake of hia
company. But
that the povernmtent has not

toto

he concedes |

With the removal of some at

A iByear contract won by
Thames Water, the UK util
ity, to supply water for the
industrial town of iemit
could wt & trend for a pet
vetelyren water and sewer
age industry in Turkey. But,
im spite of being heartened
by the new law allowing
international arbitration im
disputes, Thames for one
dows ot expect & boeansa of
ew contracts, at least in the
short Fur
Thames, together with
Turkish and Japamese part
ners, completed the
deal to Dulld the biggest pep
vately.tinanced water plant
im Turkey in 1948 It had
secured a special exemption
from Impalation which at the
time gave Turkey's highest
administrative court, the
Ninal say to disper
But now that the main
legal obstacle to foreign
investment has been
removed, it is up to Tarkish
municipalities to seek pri
vate operstors to ran Ubeir
water and sewerage The
Turkish state must also
remove bureaucratic oteta.
les whick still hinder fman-
cing and dealmaking, whebe
financiers must become con-
vinond that prujects can pen-
crete sufficient and relintde
rerunves (0 recoup invest
mepts. Public infrastructure
@eals have traditionally bean
secured by Turkish treasury
guarantees, but there is a
Umit to the rumber of guar.
antees Turkey cam afford to
issue
onetheless, examples
wurkiwide show Uhat private
water operators = ied by
French amd British compa.
niles which have the longest
experience of running pri
vate sector water and sewer:
age services at home - can
eohance stenificantly the
quality and cat the costs of
Infrastructure traditionally
operated by the state. Par
companies such a5 Thar,
which face saturated and
increasingiy regulated mar.
kets ut home, expanding
abroad is am important
apportanity to generate
growth for shareholders.
Bet the undoubted
improvements brought to
customers by private sector
operators have usually been
accompanied by 4m increase
in charges, which cam pro
litically unpopular. The
| Very notion that handing
ower public services
vate operators can
consumers will also need
some careful selling before

00500000001733

in the
into a}
tracts,
Yure
under-se
try for
respurt
“cost p
mane



Subject; Re: Turkey issues (Document link: Robin Ruth Ritterhoff)
Robin,
many thanks.

[(0)(5)]

ajay

Robin Ruth Ritterhoff
02/15/2001 01:36 AM
Extn: 98049 EDSO1

To Ajay Chhibber

cc: Kathleen B. Mccollom, Sally M. Zeijlon, Ayse Ronay

Subject: Turkey issues

Ajay-- for some mysterious son, the first time I sent the message below,

Lotus Notes decided not to send it to you, despite my having addressed it to
you. Here it ie again.

Regards,

Robin

seeeeern ~~ seceenncsccs Forwarded by Robin Ruth Ritterhoff/Person/World Bank on
02/14/2001 06:34 PM --<<<<<9-----<sseeeerrnnnn

Robin Ruth Ritterhoff

02/14/2001 06:34 PM

Extn: 88049 EDSO1

To:
cc: Kathleen B. Mccollom, Sally M. Zeijlon, Ayse Ronay

Subject: Turkey issues
Ajay--

{(6)(5)]

00500000001577


BACKGROUND ON BOT POWER PROJECTS IN TURKEY

{(o)(5)]

00500000001952


{(b)(5)]

For further information please refer to :
Adrian Rouse, Senior

+80 212 252 2000 - 232
a@rouse@bendersecurities.com

.» from Bender Info-Cannon
Pl pen by Bender B.1.T. Team

00500000001504


Tran, Luyen _

From: Mills, Marshall

Sent: Th , February 15, 2001 11:32 AM

To: ‘rritterhoff@worldbank.org’; Grewe, Maureen; Mils, Marshall; Stewart, Elizabeth K.
Ce: Tran, Luyen; Clapp, Gene; Patti Brukoff (E-mail)

Subject: RE: Turkey issues and Bank

Thanks very much for pursuing this, Robin.

{(b)(5)]

Marshall

-----Original Message-----
From: rritterhoff@worldbank.org [mailto:rritterhoff@worldbank.org]

Sent: Thursday, February 15, 2001 8:36 AM

To: Maureen.Grewe@do.treas.gov; Marshall.Mills@do.treas.gov;
Elizabeth.K.Stewart@do.treas.gov

Cc: Luyen.Tran@do.treas.gov; Gene.Clapp@do.treas.gov
Subject: Re: Turkey issues

Importance: High

{(b)(5))

eae ----- Forwarded by Robin Ruth Ritterhoff/Person/World Bank on
02/15/2001 08:34 AM

Robin Ruth Ritterhoff
02/15/2001 08:34 AM
Extn: 88049 EDSO1

To: Ajay Chhibber
cc: Kathleen B. Mccollom, Sally M. Zeijlon, Ayse Ronay
Subject: Re: Turkey issues (Document link: Robin Ruth Ritterhoff)

]
00500000001831


Turkey = [(b)(5)]
Question: [(b)(5)]

Answer: [(b)(5)]

Drafted by Marshall Mills, OASLA/ISM, 622-9398, May 3, 2001

00500000002351


ee Coop. cata WUE Antara Fear om Trrben "
R-ptroboth, Steward, Clopp » Thm

{(b)(5)}

00500000001793


a

~

ENERGY by David Tonge

one step back

‘A new national policy is part of a Jong-planned effort to ensure
that new generating capacity matches actual energy needs

Just when new investors in
Turkey's

right to international arbé-
tration for thelr contracts,

He
Pd
Riclk
gree
eebfel
i

48bn kWh, indicating the
further tender of an addi-

Developers who have not signed

incorporation of these princi
ples in agreements

reached. Most developers
asked for their contracts to

be changed to private law
contracts or, if this is

concession contracts may find that

|

i
28

HTT

i
3
i

i
EF

:

sLFEF
tt
He
ate

|

:
|

=
=
3B
=
g
5
3
6

ty

|

g
i
z
$

ee
I
&
&

|

BOT energy model,
Turkish Constitutional

Rgqqee
at
ii

HB
|
i

©8F EEE
He
Bee
Le

i
i

I
k
i

sions

the Danigtay. When it
became clear that the lack of
arbitration clauses in BOT
projects was unacceptable to
international financiers, the

tion followed in December
and January.
David Tonge is managing

anbul
whic
jams,
under
® pak
capitt

i

ish

Tecen
ties’
contr

00500000001687


JAN-25-2081 16319 US TREAS INTL AFFAIRS 222 622 2336 P.eS

« Because power plants typically require a minimum twenty-four month
construction period, imposition of a 2002 deadline will, in effect, terminate these

projects on the day the law is passed.

* Export credit agencies, including US Ex-im, and commercial lenders have
indicated that they will not provide financing to projects that do not have Treasury
guarantees or in the event the Treasury guarantee is contingent upon meeting a
2002 commercial operation deadline.

«The Ministry of Energy and Natural Resources and the State Planning
Organization of Turkey are increasingly concemed that the continuing delays in
energy projects will result in extending the energy shortage inte 2003.

+ The imposition of a deadline for these approved BOT projects will be an
imprudent action during a period of transition in the energy sector that will erode
confidence among potential foreign investors in Turkey. According to the UN,
Turkey already ranks a lowly 54th in the world in attracting foreign direct
investment, Turkey was able to attract only §785M of investment capital in 1999.
trailing, among others, Malta, the Dominican Republic, Egypt and Vietnam. The
proposed provision of the new energy law that will, in effect, terminate these BOT
projects that are under contract, will be detrimental to attracting increased foreign
investment in Turkey during a period of expected siow-down in the world
economy.

A strong Turkish economy is vital to a stronger Turkey. And a stronger Turkey, a critical
ally, is in the best interest of the US, Since time is of the essence, we will appreciate
your urgent actions to persuade the World Bank and the {MF to support the deletion of
an arbitrary deadline in the proposed energy law. If the Government of Turkey in fact
has no intention of building these 29 projects, we suggest that the partias rely insiead
on the termination provisions of the individual commercial contracts.

Members of the ATC Energy Committee respectfully request a meeting with your office

in order to discuss this matter in more detail, | will contact your office to arrange a
convenient time to meet.

Sincerely,
bara
Thomas C. Briggs

Chairman
American Turkish Council Energy Committee

we THT SORE OT ww
TOTAL. P.8S

00500000001693


Clapp, Gene

From: Mills, Marshall
Sent: Wieenesdey. ebruary 14, 2001 5:26 PM
To: Mills, ll; Grewe. Maureen; Clapp, Gene; Stewart, Elizabeth K.; Tran, Luyen; McDonald,
Lanny, Robin Fenierholl (E-maly; R Steve; Stedman, Louellen
Ce: "Patti Brukoff Fcnaiky
Subject: FYI: IMF conditionality and Embassy action request on Turkey Electricity Law
Importance: High
{(6)(5)]
Marshall
——-Original Message=--
From: Mills, Marshall
Sent: Wednesday, February 14, 2001 2:48 PM
To: ‘Grewe, Maureen; Capp, Gene; Stewart, Blizabeth K.; Tran, Luyan; McDonald, Larry; Robin Ritterhoff (E-mail)
Ca Patti Brukeff (E-mal)
Subject: FYI; Embassy action request on Turkey Electricty Law and IFI conditionality
Importance: High
{(b)(5))

00500000001926


From: Malachy Nugent

To: Dom13.D0P08(BEASLEYM, CLAPPG, EPSTEINR, GREWEM, HE...
Date: 512100 5:1fpm

‘Subject: Turkey ERL — responses to USDOC questions -Reply

‘Thanks, Robin. I'f pass this along to Commerce and see if that addresses their concems,

Malachy.
>>> ex, mail. “rrittarhoffi@workibank.org* 05/02/00 04:57pm >>>

((b)(5)]

Margaret, where do we go from here?

ene — Forwarded by Robin Ruth RitterhofiPerson World Bank on
06/02/2000 02:39 PIM ————--————a-nnmnn

James Parks
06/02/2000 01:14 PM
Phone: 579+250 ECSPE

To: Robin Ruth Ritterhoff
cc: Ajay Chhibber, Sally M. Zaijion, James Sayle Moose, Kathieen B. Mccollom
Subject: Turkey ERL :

Robin,

[(b)(5)]

00500000001779


{(b)(5)]

Malachy. Nugent@do treas.gov on 05/03/2000 10:14:17 AM

To: Mary.Geasley@Oo.Treas,Gov, Gene.Clapp@Do. Treas.Gov,
.Treas.Gov, Maureen.Grewe@Do. Treas.Gov,

Sheila. Heming@Do.Treas.Gov, Margaret. Kuhiow@Do, Treas.Gov,
Meg.Lundsager@Do. Treas. Gov, Elizabeth.K Stewart@Do.Treas.Gov,

Gene.Clapp@Do, Treas.Gov, Malachy.Nugent@Do. Treas.Gov,
Margaret. Kuhtow@Do. Treas.Gov, Robin Ruth Ritterhotf

cc: Elizabeth.K.Stewart@)Do. Treas Gov, Janice L. Mazur Eds,
Mary.Beasiey@0o. Treas.Gov, Maureen.GrewegpDo.Treas.Gov,
Meg.Lundsager@Do. Treas.Gov, Robin.EpsteingDo. Treas. Gov,
Sheila Hering@Do.Treas.Gov

Subject’ Turkey ERL — responses to USDOC questions -Reply

Date; 05/03/2000 10:09 arm (Wednesday)

From: Malachy Nugent

To: Dom13.DOPO8(BEASLEYM, CLAPPG, EPSTEINR, GREWEM,
HERRLINGS,

|. Herring”),
Subject: Turkey ue = responses to USDOC questions -Reply

{(b)(5)]

Thanks. Malachy.
Malachy,

{()(5)]

00500000001768


Stewart, Elizabeth K. _
grow: Thursday, Neprasry rg 8:36 AM

To: Maureen.Grewe@do.treas.gov, Marshall. Mills@do.treas. gov;
Ce: Luyen ath K Ste po ee do tre “

4 . jo. 5 ° .treas.gov
Subject: Re: Turkey issues gon 9
Importance: High

my answer to Ajay's clarification. [(b)(5)]

aad pan ta Porwarded by Robin Ruth Ritterhoff/Person/World Bank on
02/15/2001 08:34 AM --------------------------=

Robin Ruth Ritterhoff

02/15/2001 08:34 AM

Extn: 88049 BDSO1

To: Ajay Chhibber
ce: Kathleen B, Mccollom, Sally M. Zeijlon, Ayse Ronay

Subject: Re: Turkey issues (Document link: Robin Ruth Ritterhoff£)

Ajay, thanks very much for the clarification-- very heloful. [(b)(5)]

Regards,
Robin

Ajay Chhibber
02/15/2001 04:39 AM
Extn: 84219 ECcCcO6

To: Robin Ruth Ritterhoft
ee: Kathleen B. Mccollom, Sally M. Zeijlon, Ayse Ronay

Subject: Re: Turkey issues (Document link: Robin Ruth Ritterhoff)
Robin,
many thanks.

{(b)(5)]

ajay

Robin Ruth Ritterhoff
02/15/2001 02:36 AM
Extn: 98049 EDSO1

00500000001572


{(b)(5))

For further information please refer to :

Adrian Rouse, Senior Analyst
+90 212 252 2000 - 232
arouse@bendersecurities.com

... from Bender Info-Cannon
pM by Bender B.1.T. Team

00500000001930


Stewart, Elizabeth K.

From: McDonald, Larry
Sent: Friday, F 09, 2001 10:32 AM
To: Mills, Marshall, |. Lovellen; Clapp, Gene; Stewart, Elizabeth K.
Ce: Grewe, Maureen
Subject: RE: URGENT: Dialin Instructions for Conference Call on Turkey Energy Issues and (Fle at
{(b)(5)]

-——-Original Message-——-

From: Mills, Marshat

Sent: Friday, February 09, 2001 10:26 AM

To: Stedman, Lousilen; Clapp, Gene; Stewart, Elizabeth K.

ca 4

Grewe, Maureen; McDonald, Larry
Subject: RE: URGENT: Diat-in Instructions far Conference Call on Turkey Energy Issues and IFis at 10:30

At least Steve, maybe Bill.

{(b)(5)}
Marshall

——Original Message——

From: Stedman, Louellen

Sent: — Friday, February 09, 2001 10:24 AM

To: Mis, Marshall; Capp, Gene; Stewart, Ellzabeth K.

Cer Grewe, Maureen; McDonald, Larry

‘Subject: RE: URGENT: Dialin Instructions for Conference Calf on Turkey Energy Issues and IFls at 10:30
High

Importance:
{(b)(5)]
——~Original Message——--
From: Mids, Marshal
Sent: Friday, February 09, 2003 10:20 AM
To: Stedman, Louellen; Capp, Gene; Stewart, Bizabeth K.
Ce: Grewe, Maureen; McDonald, Larry
‘Subject: URGENT: Dial4n Instructions for Conference Call on Turkey Energy Issues and IFis at 10:30
Importance: High

Call 647-0817, code 7890.

((b)(5)]

The conference call is at the staff level, prior to a DAS level meeting this afternoon at 2 pm. | am covering for

ISM.
Marshall
Original Message—
‘Stedman, Louelien
Sent: Friday, February 09, 2001 10:11 AM
Tor Mills, Marshall; Clapp, Gene; Stewart, Elizabeth K.
Ce: Grewe, Maureen;

00500000001522


Robin

00500000001825


Turkey Energy Law Response
Dear Mr. Briggs:

{(b)(5)}

Sincerely,

Todd Crawford

00500000001604


Call 647-0817, code 7890.

[(b)(5)}

The conference call is at the staff level, prior to a DAS level meeting this aftemoon at 2 pm. lam
covering for ISM.

Marshall
Original Message——
From: ‘Stedman, Lovetien
Sent: Friday, February 05, 2001 10:11 AM
To: Mills, Marshall; Capp, Gene; Stewart, Elizabeth K.
Ca Grewe, Maureen; McDonald, Larry
Subject: RE: URGENT: Conference Cat on Turkey Energy Issues and IFIs at 10:15-10:30
Importance: High:

((b)(5)]

Who is taking the call? Steve? Mark? The Secretary?

Original Message—

From: Mills, Marshall

Sent: Friday, February 09, 2001 9:57 AM

To: Stedman, Louelien; Capp, Gene; Stewert, Bizabeth K.

Ce Grewe, Maureen

Subject: RE: URGENT: Conference Call on Turkey Energy Issues and IFis at 10:15-10:30

Sorry to throw you in the middle of this ... [(b)(6)]

[(b)(5)]

Original Message—-—
From: ‘Stedman, Loudien
Sent: Friday, February 09, 2001 9:44 AM
To: Mills, Marshall; Clapp, Gene; Stewart, Eltzabeth K.
ca Grewe, Maureen
Subject: RE: URGENT: Conference Call on Turkey Energy Issues and IFis at 10:15-10:30
Who is the conference call with???
—Onginal Message—~
From: Mills, Marshait
Sent: Friday, February 09, 2001 9:42 AM
To: Clapp, Gene; Stewart, Elizabeth K.
Ca Grewe, Maureen; Stedman, Louelen
Subject: URGENT: Conference Call on Turkey Energy Issues and IFis at 10:15-10:30

Importance: High

Details to follow.
Should anyone from GC and/or the IMF office participate?

00500000001529


Clapp, Gene

From: rritterhoffi@worldbank.o1

Sent: Wednesday, February 2, 2001 3:21 PM

To: Marshall’ \do.treas.gov

Ce: Luyen. Trai treas.gov; Maureen.G treas.gov; Gene. Cla jo.veas,
Efizabeth.K Ste .treas.gov; Larry.M .treas.gov;
PBRUKOFF| Lorg

Subject: RE: FYt: Emi ‘action request on Turkey Electricity Law and IFI conditionality

{(©)(5)]

Marshall.Millsedo.treas.gov on 02/14/2001 03:07:58 PM

To: Luyen. Tran@Do.Treas.Gov, Maureen,.Grewe@Do.Treas.Gov,
Gene.Clapp#Do.Treas.Gov, Elizabeth.K.Stewart@®Do,Treas.Gov,
Larry. Mcdonald@Do.Treas.Gov, RritterhoffeWorldbank.Org

ce: Phrukoffelm£.org

Subject: RE: FYI: Embassy action request on Turkey Electricity Law and IFPI

conditionality
{(0)(5)]
2 otter Original Message----~-
> From Tran, Luyen
> Sent: Wednesday, February 14, 2001 2:51 PM
> To: Mills, Marshall; Grewe, Maureen; Clapp, Gene; Stewart, Elizabeth K.;
> McDonald, Larry; ‘Robin Ritterhoff (E-mail)*
> Ce: ‘Patti Brukoff (E-mail)*
> Subject: RE: FYI: Embassy action request on Turkey Electricity Law
> and IFI conditionality
>
{(b)(5))
>
> ween Original Message-----
> From: Mills, Marshall
> Sent: Wednesday, Pebruary 14, 2001 2:48 PM
> To: Grewe, Maureen; Clapp, Gene; Stewart, Elizabeth K.; Tran,
> Luyen; McDonald, Larry; Robin Ritterhoff (E-mail)
> Cc: Patti Brukoff (E-mail)
> Subject: FYI: Embassy action request on Turkey Electricity
> Law and IFI conditionality
> Importance: High
>
>
{(b)(5)]

00500000001924


((b)(5)]

> saeee Original Message-----

> From: ils, Marshall

> Sent: Monday, February 12, 2001 8:13 PM

> To; Kifayat, Adnan; Baker, Jeffrey; Berger, Gregory; Cook, Lis:

> Dulaney, Tim; Gelpern, Anna; Grewe, Maureen; Gunaratne, Nilmini; Kuhlow,
> Margaret; Martin, Willia; Murden, Bill; Radelet, Steve; Romey, Mike;

> Setser, Brad; Sobel, Mark; Stedman, Louellen; Tran, Luyen; Salladin, Anne;
> Sharer, James; Cetina, Jill; Corfield, Anna; Abdelrazek, Rawan; Engelhard,
» Joe; Nelson, Heidi; Adams, Tim; Dam, Ken; Rao, Geetha

> Ce: Roubini, Nouriel; Mills, Marshall

> Subject: Turkey: Summary Market Report, Monday, February 12

>

>

> Summary Market Report, Monday, February 12

> (A full report on last week's developments will come out tomorrow.)

>

((b)(5)]

00500000001920


((b)(5)]

Forwarded by Robin Ruth Ritterhoff/Person/Word
Bank on
(0502/2000 02:38 PM ===
James Parks

05/02/2000 01:14 PM
Phone: 579+250 ECSPE

To: Robin Ruth Ritterhoft

cc: Ajay Chhibber, Sally M. Zeijlon, James Sayle Moose, Kathleen B.
Mecollom

Subject: Turkey ERL

Robin,
{(6)(5)]

00500000001746


Stewart, Elizabeth K.

From: , Gene

Sent: Friday, January 26, 2001 11:09 AM

To: Mills, Marshall: 'rritte lbank.org’

Ce: Tran, Luyen; 'PBRU! Lorg’; Grewe, Maureen; Stedman, Louellen;
ridbank.org’, Stewart, Elizabeth K.

Subject: RE: FW; Turkish Energy Meeting

I have a call in to BB at State. i will let you know if I hear anything.

etal Original Message---~-~

From: Mills, Marshall

Sent: Priday, Ji 26, 2002 11:03 AM

To: ‘rritterhoff@worldbank.org'; Clapp, Gene

Cc: Tran, Luyen; Clapp, Gene; PBRUKOFP@imf.org; Mills, Marshall; Grewe,
Maureen; Stedman, Louellen; tcrawford@worldbank.org; Stewart, Blizabeth
K

Subject: RE: FW: Turkish Energy Sector Meeting

I just talked to US Embassy Ankara.

[(b)(5)} I have a lot of information to share -- I think it would be
most efficient to wait until 3 pm.

Marshall

o---4 Original Message-----

From: rritterhoff@worldbank.org [mailto:rritterhoff@worldbank.org)
Sent: Friday, January 26, 2001 10:55 AM

To: Gene.Clappédo.treas.gov

Ce: rritterhoff@worldbank.org; Luyen.Tranédo.treas.gov;
Gene.Clapp@do,treas.gov; PBRUKOPF@imf.org; Marshall.Millsédo.treas.gov;
Maureen.Greweedo,treas.gov; Louellen.Stedman@do.treas.gov;
terawford@worldbank.org; Elizabeth.K.Stewarte@do.treas.gov

Subject: RE: FW: Turkish Energy Sector Meeting

{(©)(5)]

Gene .Clapp@do,treas.gov on 01/26/2001 10:37:44 AM

To: Rritterhoff@Worldbank.Org, Luyen.Tran@Do.Treas,Gov

ce: Gene.Clapp#Do.Treas.Gov, Pbrukoff@Imf.Org, Marshall.Mills@Do.Treas.Gov,
Maureen. Grewe@Do.Treas.Gov, Louellen,.StedmangDo.Treas.Gov,
TorawfordeWorldbank.Org, Blizabeth.K.Stewart@Do.Treas.Gov

Subject: RE: FW: Turkish Energy Sector Meeting

{(b)(5)]

00500000001558


From: Mills, Marshall

Sent: Sunday, July 01, 2001 4:59 PM

To: Salladin, Anne; Clapp, Gene; Stewart, Elizabeth I.; Robin Ritterhoff (E-mail)
Ce: Grewe, Maureen; Munk, Russell

‘Subject: Response Letter to GE and AES on Turkey Energy Projects

Please find attached for your review a draft joint response letter and cover memo to go from
Steve Radelet to John Taylor for signature, | can provide copies of the incoming by fax,

{(b)(5)]
We hope to get this to Steve by OOB Tuesday [(b)(6)]

Thank you,
Marshall

00500000001950


>
[()(5)]

>

> Marshall -- did you get a fax from Phyllis?

>

> -----Original Message----~

> From: Tran, Luyen

> Sent: Friday, January 26, 2001 8:28 AM

>To: Stedman, Louellen; Grewe, Maureen; Mills, Marshall
> Subject: FW: Turkish Energy Sector Meeting

>

{(b)(5))

>

> maureen & marshall -- probably would make sense to have one of you there.

> please call gene to see what has transpired on this. thanks.
>

> -----Original Message---—-

> From: Coffman, Phyllis

> Sent: Thursday, January 25, 2001 6:09 PM

>To: Clapp, Gene; Stewart, Elizabeth K.; Tran, Luyen

> Subject: Turkish Energy Sector Meeting

>

> Friday, January 26 at 3:00 pm in Bill's office.

00500000001804


= to maintain stability at @ sensitive time for the economy. Projects have lachided tstanbul's naw airport and more work on the Seuth-eestem Aealola project Reuters, Panos

; key to economic gain

\MF-backed reforms and privatisation, says Leyla Boulton

“We cannot say that Tar
key has been very successful
in attracting foreign direct
investment,” concedes Mr
Demiralp. “The problem is
high inflation, and political
and economic instability in
Without lasting
governments in the 1890x, we
were not able to have eco
namie stability either.”

‘The lack of investment ts
particularly visible in
Gecrepit state-owned infra
structure - whether it daily
power cuts or miserable pub-
lic transport and traffic jams
im Istanbul, the country's
biggest city with a popula-
ton of Om.

‘The energy sector is par
‘ticularly hungry for cash, ht
has scraped by on around
Sibm investment a year even
though Turkish energy plan
ners reckon that Turkey,
Europe's fastest growing
energy market, needs to
invest around $.5bn a year
for the next decade just to
keep up with demand. Per
capita consumption is just a
quarter that of Germany.

Many of the obstacles to
the development of infra
structure in particular and

economic development in
general are being tackled by
the IMF-backed reforms. The
programme combines fiscal
discipline with «weeping
structural reform,
privatisation o
state-owned enterprises.

The sell-offs have just
begue with the suctioning of
Si per cent of Petrol Ofssi,
the country’s biggest petro-
lew retailer, and the public
offering af 15 to 20 per cent
of Tapras, the quasi-monopo-
listic oil refiner, The show-
piece of privatisation witl be
the sale scheduled for this
summer of @ 20 per cent
stake of Turk Telekom, the
national telecoemunications
giant. It is to be followed
later this year by the partial
privatisation of Turkish Air
Lines, the national carrier.

While inflation so far has
remained stubbornly high.
positive expectations of
reform have fuelled a sharp
drop in interest rates. The
fnanei infrastructure
projects may also be facili
tated by an improvement,
which the government bopes
to see m the second half of
this year, in Turkey's sub-in-

westment grade credit rating.

The reform programme's
ultimate goal is to cut infix
than, now at 64 per cent, to 5
or 7 per cent by tbe end of
2002. But its inimediate alm
1s to restart economic
growth after a recession trig-
gered by the emerging mar-
ket crisis of 1968 was pro:
longed by a devastating
earthquake last August. This
makes the removal of
remaining obstacks to for:
eign investment — seen a8 an
essential engine of growth ~
all the more important.

The government has used
its big parliamentary major-
ity to pass more than 160
new laws ranging from the
approval of telecoms privaty-
sation to better regulation of
banking and capital mar.
kets. The most inportant
change for the sake af infra-
structure has been a consti
tutional amendment allow-
tng international arbttraticn
in disputes aver contracts
tevolving the state. It was
abolished as one af the con-
ditions set by the IMF for
approving a $4bn standby
loan at the end of last year.

Previous legislation gave

the Danigtay, the country's
highest administrative court,
the final say in s0<alled con-
ceasion agreements. Inspéred
by Turks’ fear of foreign eco-
nomic domination which
came to engulf the Ottoman
wmpire, the legislation was
the biggest legal ¢ Q
financing energy and ©
infrastructure projects.
Although the law has been
changed. the public sector in
‘Turkey is still saddled with
complex bureaucratic proce:
dures and perceptions of cor-
ruption which make deals
difficult to finalise. But it
remains leas problematic
than the system prevailing
in Russia, which, until the
August 1956 devaluation of
the rowble, attracted both
more foreign investment and
a better credit rating than
‘Turkey.
Assuming the government
vives, the big question is
how quickly Turkey can
move towards a more trans
parent and efficient systewo
of government, public ten:
dering and market regula:
on, The establishment of a
proper regulatory body for
energy was among the condi

er

tors attached by the World

Bank to « $780e loan to sup
port economic reform, as
was a commitment to

embrace a more efficient
electricity mar
Bank's board is
expected to approve the loan
next week.

Where change is not
required by the IMF or the
orld Bank, it is likely to be
part of the acquis comme
noutaire which Turkey must
embrace in order to became
@ full member of the £U. The
status of candidate <
described by a senior 7
ish official Last month as
“the consecration of a long
struggle for westernisation
in this country” ~ serves as
@ powerful additional incen:
tive for progress. “We shall
push ourselves to a higher
level,” says President Demi.
rel. “It is owr dream to
become more rich, mare con
temporary."

Others add that the stran
gest guarantee of succes? is
the high cost of abandon:
reforms in midstream. 4
Gazi Brel, the central bank
governor, puts it succinctly:
“There is no plan B.”

00500000001729


[()(5)]

Please call me if you have further questions.

— ee
Stedman, Louelien
Sonne Friday, February 09, 2001 10:24 AM
te: Mills, Marshall; Clapp, Gene; Stewart, Elzabeth K.

Grewe, Maureen; McDonald, Larry

Subject: RE: URGENT: Dial-in Instructions for Conference Calf on Turkey Energy Issues and [FIs at 10:30
Importance: High
Who is going to the DAS level meeting? [(b)(5)]

——Oniginal Message———

From: Mits, Marshal

Sent: Friday, February 09, 2001 10:20 AM

To: Sacra, Lover: spp, Gane; Star, rab K

Grewe, Maureen; McDonald, Larry
Subject: URGENT: Diat-in Instructions for Conference Call on Turkey Energy Issues and IFIs st 10:30
Importance: High

Call 647-0817, code 7890.

{(b)(5)]

00500000001525


Turkey, 3rd Ld-Writethru, a0551,0561

ISTANBUL, Turkey (AP) The government on Friday put a senior
World Bank official in charge of healing Turkey's crisis-plagued
economy and restoring international confidence after its currency
plunged against the dollar.

Prime Minister Bulent Ecevit appointed World Bank Vice President
Kemal Dervis to a Cabinet post in charge of the treasury, with
responsibilities for overseeing the Central Bank, state banks and
the banking regulatory board.

Dervis, 52, is one of 26 vice presidents at the World Bank.
Economists say the government hopes he can use his close ties with
international lenders to get desperately needed loans for Turkey.

President Ahmet Necdet Sezer signed the decree appointing
Dervis, private television NTV reported.

The government also appointed Sureyya Serdengecti as Central
Bank governor, Ecevit said. Serdengecti was deputy governor under
Gazi Ercel, who took early retirement along with Treasury Secretary
Selcuk Demiralp following the crisis.

Ecevit is under intense pressure from the business sector and
public to revamp his economic team after a political and financial
crisis saw the lira lose a quarter of its value against the dollar
since last week.

The crisis emerged after a public fight between Ecevit and Sezer
led to fears of a major political crisis and caused foreign
investors to pull out of Turkey's markets,

**We have a lot of work to be done," Dervis told reporters
after Ecevit's announcement.

‘If we are going to be successful, the whole of Turkey must
really come together,” Dervis told the Anatolia news agency,
listing bureaucrats, businessmen and trade unions.

Dervis’s first task will be to revise Turkey's stabilization
program, which is backed by $11 billion in loans from the
International Monetary Fund, following its decision to abandon its
currency exchange control during the two-week financial crisis.

Turks have pegged much hope on Dervis and business reacted
positively to his appointment.

"This development is a blessing and a comfort for the (Turkish)
people,” said Husamettin Kavi, chairman of the Istanbul Industrial
Board.

Aziz Karadeniz, general director of Alfa Security Exchange, said
Dervis' appointment would encourage forcign investors to return.

But some expressed doubts that even Dervis would succeed in
overcoming the current crisis.

“If Kemal Dervis, who seems to be our last chance, too fails in

1
00500000001561


{(b)(5))

Thanks again for your interest in Turkey's energy reform program. Please let us
iknow if you have further questions.

Regards, Jim Parks

{(b)(5)]

—-——--—__——- Forwarded by Sally M. Zeijion/Person/World Bank on
03:29 AM ———$——$————

Robin Ruth Ritterhoff
04/28/2000 06:01 PM
Extn: 88048 EDSso1

To: Sally M. Zeijlon
cc; Kathleen 8, Mccollom, James Parks

Subject: Turkey ERL
Sally ~

{(b)(5)]

00500000001780


JAN-25-2001 18:19 US TREAS INTL AFFAIRS 282 622 2536 P.es
a

* Because power plants typically require a minimum twenty-four month
construction period, imposition of a 2002 deadline will, in effect, terminate these

projects on the day the law is passed.

* Export credit agencies, including US Ex-Im, and commercial lenders have
indicated that they will not provide financing to projects that do not have Treasury
guarantees or in the event the Treasury guarantee is contingent upon meeting a
2002 commercial operation deadline.

«The Ministry of Energy and Natural Resources and the State Planning
Organization of Turkey are increasingly concemed that the continuing delays in
energy projects will result in extending the energy shortage into 2003.

+ The imposition of a deadline for these approved BOT projects will ba an
imprudent action during a period of transition in the energy sector that will erode
confidence among potential foreign invastors in Turkey. According to the UN,
Turkey already ranks a lowly 54th in the world in attracting foreign direct
investment, Turkey was able to attract only $785M of investment capital in 1999,
trailing, among others, Malta, the Dominican Republic, Egypt and Vietnam. The
proposed provision of the new energy law that will, in effect, terminate these BOT
projects that are under contract, will bo detrimental to attracting increased foreign
invastment in Turkey during a period of expected siow-down in the world

economy.

A strong Turkish economy is vital to a stronger Turkey. And a stronger Turkey, a critical
ally, is in the best interest of the US. Since time is of the essence, we will appreciate
your urgent actions to persuade the World Bank and the IMF to support the deletion of
an arbitrary deadiine in the proposed energy law. If tho Government of Turkey in fact
has no intention of building these 29 projects, we suggest that the parties rely instead
on the termination provisions of the individual commercial contracts.

Members of the ATC Energy Committee respectfully request a meeting with your office
in order to discuss this matter in more detail. | will contact your office to arrange a
convenient time to meet.

Sincerely,

Woama—C

Thomas C. Briggs
Chairman
American Turkish Council Energy Committee

we TOTS! BORE OT wy
TOTAL P.23

00500000001792


pt eet

a=

FEB-@1-2001 17:15 icon EeET_—_ SO

Department of the Treasury

Departmental Offices
Middle East and South Asian Nations
Office . Office Phone Number
202-622-0037

Fax Phone Number

| FAX TRANSMITTAL SHEET i

Date: Time:

- To:_fob's RittroFF 477-2967

- Fax Number

Gere Clap Dp BB
__“Elteabots Stemmet 2ZSE3S :
From: __Mowslell: 21318
; Phone Number

Number of Pages: Z

(including this page)
Comments: Mediate Fron toreten!'s Teuleg Fossey, MB.

X

Tnmabindis nnmee sedsh cite ace woe ’ os : Ano

00500000001611


ex.mail( Malachy Nugent”,"Mary Beasley”,"Gene.Clap.,.

00500000001749


me eee ne we eer are ane eee wee eS tue

* Because power plants typically require a minimum twenty-four month
construction period, imposition of a 2002 deacline will, in effect, terminate these

projects on the day the law is passed.

« Export credit agencies, including US Ex-Im, and commercial lenders have
indicated that they will not pravide financing to projects that do not have Treasury
guarantees or in the event the Treasury guarantee is contingent upon maeting a
2002 commercial operation deadline.

«The Ministry of Energy and Natural Resources and the State Planning
Organization of Turkey are increasingly concemed that the continuing delays in
energy projects will result in extending the energy shortage into 2003.

+ The imposition of a deadline for these approved BOT projects will ba an
imprudent action during a period of transition in the energy sector that will erode
confidence among potential foreign investors in Turkey, According to the UN,
Turkey already ranks a lowly 54th in the world in attracting foreign direct
investment, Turkey was able to attract only $785M of investment capital in 1999,
trailing, among others, Malta, the Dominican Republic, Egypt and Vietnam. The
proposed provision of the new energy law that will, in effect, terminate these BOT
projects that are under contract, will be detrimenta! to attracting increased foreign
investment in Turkey during a period of expected slow-down in the world
economy.

A strong Turkish economy is vital to a stronger Turkey. And a stronger Turkey, a critical
ally, is in the best intarest of the US. Since time is of the essence, we will appreciate
your urgent actions to persuade the World Bank and the IMF to support the deletion of
an arbitrary deadiine in the proposed energy law. If the Government of Turkey in fact
has no intention of building these 29 projects, we Suggest that the parties rely instead
on the termination provisions of the individual commercial contracts.

Members of the ATC Energy Committee respectfully request a meeting with your office
in order to discuss this matter in more detail, | will contact your office to arrange a
convenient time to meet,

Sincerely,
Morar Boucgygn
‘Thomas C. Briggs

Chairman
American Turkish Council Energy Committee

aon TOTPL PAGE.23 wa
TOTAL P.BS

00500000001685


{(b)(5)]

00500000001925


From: Tran, Luyen
Sent: Friday, January 26, 2001 2:24 PM
To: Stewart, Elizabeth K.
Subject: FW: Draft Turkey letter - pls clear by tomorrow noon
Tuthey Evergy Letter
912807.do—

---~-Original Message--~---~

From: rritterhoff@worldbank.org [mailto:rritterhoff@worldbank.org)
Sent: Thursday, January 25, 2001 2:36 PM

To: Marshall.Millsedo.treas.gov; PBRUKOFF@imf.org;

Gene. Clappa@do.treas.gov

Ce: Maureen.Grewe@do.treas.gov; Luyen.Tranédo.treas.gov

Subject: Draft Turkey letter - ple clear by tomorrow noon

Attached is the draft responding to the American-Turkish Council's letter
(already faxed to Marshall & Patty, now faxing to Gene). Please comment/clear
by noon tomorrow.

(See attached file: Turkey Energy Letter 012501.doc)

00500000001535


00500000001585


Page 2 of 2

> With this Act, a regulatory body has been established to carry out the electrical energy
market activities in order. This body needs to work in a flexible manner to follow the
rapid change and developments in the sector and market, to interfere in time, to put the
market in order, and to encourage entrance, entrepreneurship and investments into the
market. In this regard, it is important that representatives of private enterprises from
the energy sector are included in the regulatory body.

> One of the important benefits that this electrical sector liberalization act will provide is
that it will stimulate foreign capital investments and help increase employment in the
energy sector.

The next step is to ensure that the supplementary arrangements foreseen by the Act are carried
out and that the Act is enforced in an effective manner.”
Hatt
For more information and full English text of the new law please send e-mail to usoffice@tusiad-us.org

TUSIAD-U.S.: 1250 24" Street, N.W., Suite 300 - Washington, D.C, 20037, USA Tel: (202) 776-7770 Fax: (202) 776-71
TUSIAD; Me natiyet Caddesi 74, Tepeba —-stanbul 80050, TURKEY Tel: %) (212) 251-5313 Pax: 90(212) 249-0913
TUSIAD-EU; 13, Averwe des Galois 1000 - Buses, BELGIUM Tel: 32 (2) 736-4047 Fax: 32 (2) 736-3993
www.tusiad.org

01/17/2002
00500000001497


Stewart, Elizabeth K.
From: Mills, Marshall

Sent: Veederdey an. 2001 5:51 PM

To: Radelet, . Grewe, Maureen; Clapp, Gene; Stewart, Elizabeth K.; Lemay, Joanne
Ceo: Tran, Luyen; Robin Ritterhoff (E-mail)

Subject: Meeting with Bank Staff on Turkey Energy Projects, 5/29, 9 am

Robin has arranged this meeting, which will include on the Bank side the no. 2 guy for the region (Shigeo Katsui?) and Jim
Moos (energy guy).

Janice Bay and 3-4 others from State are expected to go.
Steve, can you / do you want to attend?
Marshall

00500000001486


* FEB@1-2001 17:13 1c ea OER It tee

Pet ae

aa

Department of the Treasury

Departmental Offices
Middle East and South Asian Nations
Office - Office Phone Number
202-622-0037
Fax Phone Number .
| FAX TRANSMITTAL SHEET [
Date: Time:
- To:_fob'n Riterloff 477-297 ,
-FeX Number ‘
. > — -
Elabote Stout 225635
From:___Mawslell
Phone Number
Number of Pages: GZ
, Modpuelr fon te

Comments: Fron trelan 's TE Mh

Teme

a ser . “- - ead

00500000001948


SOUTH-EASTERN ANATOLIA PROJECT by Quentin Pee!

Communication gaps

The development project, which will hamess the waters of the Tigris and the

Euphrates, is a

Everything about Turkey's
South<astern Anatotia Pro}
ect, known by its acrony
GAP, is writ large, including
the controversies. I is by far
the most ambitious devetap-
mett project tn the country.
intended to harness the
wators of both the great
Daphrates and Tigris rivers,
and bring new econamte
development to nine prov.
inens

Tt covers a region af more
than 75,060 square kilo
metres, neurly 10 por cant of

Turkey, and
some 20 per

containing
nt of the land
identified as potentially
irrigahle. plans, cote
ccived back in 1977, envisage
@ network of 22 dams and 18
hydroelectric power plants
to irrigate Lim hectares of
tand, and provide energy to
8 power-hungry country, at a
cost af some $tba.

Yet, im spite of the fact
that it {8 supposed to bring
sorely-needed prosperity to
one of the poarest regions of
Turkey, creating 34m new
jobe, and tripling per capita
fmocrnes, it remains highly
controversial, especially cut.
side the country.

It is unclear how much the

Il that were not enowgh, it
also boasts priceless archar
ological remains from the
Fich history of Mesopotamia,
some of which will eventu-
ally disappear beneath the
waters of the dams under
construction.

The latest controversy

focal population supports

That is perhaps hai
surprising, considericg that
the dams are being tuilt in a
region torn by years af civil
war, and berdering both
Syrix and Irag, two of Tur
key's most sensitive anc
troublesome

dl

neighbours,

concerns the ptanned $2zbn
isa dam and hydro-electric
Project on tho Tigris river,
chose to the Syrian border,
intended to provide power
supplies of same 1200MW.
‘The plans have triggered a
passionate political debate,
trot least in Brital

big project in terms of its scale and the controversies which surround it

the government is being

asked to provide export
credit guarantees of some
$220m to the chief

tion contracte
Beatty
Objectors

the
scheme will forve the reset

claim

tlement of at least 15,000
mainly Kurdish people, flood
the historic town of Hasate
keyt, as well 08 scores of
smailer villages, ane cause
Water shortages and possible
pollution downstream in
Syria and traq

[ts defenders maintain
that it will being prosperity
and economic development
to the region, where Kurdish
militants belonging to the
Kurdistan Workers’ Party

4
it
Soe
Pro
5
S
=

00500000001731


Stewart, Elizabeth K.

From: Brukoff, Patricia TrBRUKOFEGint cra)

Sent: Monday, January 29, 2001 12:27 PM

To: Eheabeth.K Stewart@do.ye3s gov ‘Gene.Clapp@do.treas. gov’, ‘rritterhoff@worldbank.org’;
‘Luyen. trees,

Ce: Brukoff, range “Marshall. Mills@udo.treas.gov’, "Maureen.Grewe@do.treas.gov’;
“Louelien.Stedman@do.treas.gov’, ‘tcrawlord@workdbank org’

Subject: RE: FW: Turkish Energy Sector Meeting

{(b)(5)]

seeeel Original Message-----

Prom: Blizabeth.K.Stewartedo.treas.gov
(mailto:Blizabeth.K.Stewart@do.treas.gov)

Sent: Friday, January 26, 2001 2:23 PM

To: Gene.Clappado.treas.gov; rritterhoff@worldbank.org;
Luyen. Tranedo,.treas.gov

Cc: PBRUKOFFeimf.org; Marshall .Millsagdo.treas.gov:
Maureen .Grewe@do.treas.gov; Louellen.Stedmangdo. treas.gov;
terawford@worldbank.org

Subject: RE: FW: Turkish Energy Sector Meeting

{(b)(5)]

From: Clapp, Gene

Sent: Friday, January 26, 2001 10:38 AM

To: ‘rritterhoffe@worldbank.org'; Tran, Luyen

Cc: Clapp, Gene; PBRUKOFF@imf.org; Mills, Marshall; Grewe, Maureen;
Stedman, Louellen; tcrawford@worldbank.org; Stewart, Elizabeth K.
Subject: RE: FW: Turkish Energy Sector Meeting

{(b)(5)]

Selatan Original Message~----

From: rritterhoff@worldbank.org [mailto:rritterhoffeworldbank.org]
Sent: Friday, January 26, 2001 10:20 AM

To: Luyen.Tranado.treas.gov

Cc: Gene.Clapp@do.treas.gov; PBRUKOFF@imf.org;

Marshall .Mills@do.treas.gov; Maureen.Grewesdo, treas.gov;
Louellen.Stedman@do.treas.gov; tcrawford@worldbank.org

Subject: Re: FW: Turkish Energy Sector Meeting

Luyen-- As I told Gene, I would be happy to join Bill's 37M internal meeting
to

00500000001532


From: ex, mail. “rritterhofi@worldbank.org”

To: Dom13, DOPOB(CLAPPG StewartEK, GREWEM, LUNDSAGERM,NUG...
Date: 5/4/00 2:41pm

Subject: Re: Turkey ERL — responses to USDOC questions -Reply -Reply
((b)(5)]

Malachy Nugentéido treas. gov on 06/03/2000 11:36:55 AM

To: Mary.Beasley@Do.Treas.Gov, Gene-Clapp@Do. Treas. Gov,
Michael. Colby@Oo.Treas.Gov, Robin Epstein@0o. Treas.Gov,
Maureen.Grewe@Do. Treas.Gov, Sheita Herrling@Do.Treas.Gov,
Margaret Kubiow@Do. Treas.Gow, Meg _Lundsagen@Do.Treas.Gov,
Ekzabeth.K Stewart@Do,Treas.Gov, Robin Ruth Ritterhoff,
Sakavemj@State.Gov

cc; Elizabeth.K.Stewart@Do.Treas.Gov, Gene.Clapp@Do. Treas.Gov, Janice L. Mazur
Eds, Malachy.Nugent@Do. Treas.Gov, Margaret.Kuiow@®Do. Treas Gov,
Mary.Beastey@Do. Treas.Gov, Maureen. Grewe@Do. Treas. Gov,
Meg. Lundsager@Do.Treas.Gov, Michael. Colby@Do. Treas.Gov,
Robin.Epstein@Oo.Treas.Gov, Sheila.Herrling@Oo. Treas.Gov

Subject: Re: Turkey ERL -- responses to USDOC questions -Reply -Reply

Date: 05/03/2000 11:32 am (Wednesday)

From: Malachy Nugent

To; Dom13,DOPOB(BEASLEYM, CLAPPG, ColbyM, EPSTEINR, GREWEM,
HERRLINGS, KUHLOWM, LUNDSAGERM, StewanEK),
ex.mail(‘ritterhoti@worldbank.org’, “SakaueMJ@state.gov")

CC: ex.maii{Elizabeth.K Stewart”, “Gene Clapp”,
“Jmazur@worldbank.org®, “Malachy Nugent", "Margaret Kuhlow",
“Mary.Beastey”, "Maureen.Grewe", “Meg.Lundsager’,

Subject Re: Turkey ERL ~ responses to USDOC questions -Reply

“Reply

{(b)(5)]
Thanks. Malachy.

00500000001743


{(b)(5)]

For further information please refer to :

Adrian Rouse, Senior Analyst
+90 212 252 2000 - 232
arouse@bendersecurities.com

-» from Bender Info-Cannon
... powered by Bender B.1.T, Team
#38122

00500000001571


Stewart, Elizabeth K.

Some Fruradly, Fe 15, 2001 11:29 AM
" ui . obrumry , E

To: Stewart, ERzabeth

Subject: RE: Turkey energy - your question

Thanks. This is helpful.

~-—-Original Message-——

From: ‘Stewart, Elizabeth K.

Sent: Thursday, February 15, 2001 11:16 AM
To: Radelet, Seve

Subject: Turkey energy - your question

Steve,
From my notes of the 1-29-01 conference calt with Jim Parks -[(b)(5)]

00500000001580


Stewart, Elizabeth K.

From:

ay May 21, 2001 12:30 PM
To: Ney May 23,200 Elizabeth K.
Subject: Turkey energy See or quettions
Gene, Elizabeth,
Please see State's email below.

After discussing this with Robin, we propose sending the following email back to them. Please let me know if you have
any questions or suggested changes to the questions.

Thanks,
Marshall

~

Suggested email back to State

{(b)(5)]

From: Newhouse, Stephen P [maifto:NewhouseSP @state.gov)
Sent Friday. 18, 2001 12:14 PM

To; ‘marshall, .treas.gov’

Subject: Turkey questions

Marshal:

00500000001482


FEB-Gl-ctel iesid ble OO

His Excellency Bulent Ecevit
June 13, 2000

Page 3

current conditions and the demonopolized market that the architects of Turkey's energy future
foresee.

History is a good teacher, and it is particularly relevant to our point. In virtually every
country in which deregulation of the energy sector has been legislated (including the United
States), it has taken far longer than expected for the process to move beyond the legislative act.
Turkey is not likely to perform differently. A hiatus on privately developed power production,
fuel supply or energy distribution projects until the new regulatory regime is operational would
be fatal for Turkey's economy. And the lack of guarantees would cause such a hiatus because
financing from private institutions would be sparse if not completely unavailable.

For the foregoing reasons, our companies believe that a transition formula for assessing
the availability of Treasury guarantees for projects currently under development best serves
existing realities and future objectives in the Turkish energy sector. It also minimizes the
possibility of a real crisis in power production and delivery if the new regime falters or is delayed
for any reason. The formula proposed below is based on four fundamental factors:

ql) Treasury guarantees should continue to be offered for energy projects but with
: tional qualifications:

(2) financing for privately developed and operated energy projects in Turkey at this
time needs Treasury guarantees;

(3) the nature and extent of the guarantees can be negotiated to meet Turkish Treasury
and commercial lenders’ i ;

(4) Turkey's need for energy and private foreign investment and financing require that
the Turkish Government demonstrates good faith and predictability in the
implementation of its fiscal and privatization policies.

‘The formula that we propose for determining eligibility of a project for a Treasury
guarantee would have Treasury consider the following as indicators of a well-developed and
viable project (subject to whether the project is for power production or local distribution):

A. a signed Implementation Contract or Concession Agreement,

B. an Energy Sales Agreement under negotiation or signed;

c. a Fuel Supply Agreement under negotiation or signed,

D. a completed Environmental Impact Assessment Report,
‘WR 1asae) vi

‘T86I28-001 61/9200)

00500000001615


To: Sally M. Zeijion
cc: Kathleen B. Mccollom, James Parks

Subject: Turkey ERL
Sally —

{(b)(5)]

cc: ‘ex.mail"Mary.Beasiey”,"Gene.Clapp","Michael. Colby...

00500000001772


Turkey Energy Law Response
Dear Mr. Briggs:

{(b)(5)}

Sincerely,

00500000001690


Tenders), The sender is the lanest in a string of

sane sell-clfs which officials say could net up

{© $9,000 million-10,000 million this year,
Iscemir is the country’s second gest

integrated steel plant, with capacty of

2.2 milion wanes 2 year (vy). The company

posted loses of TL 42.6 mullion million

($70.4 milion) for the firs 10 months af 1999 on.

sales of TL 119 meillion million ($199 mallion).

costs, Bamings have also come under pressure
A Eres pace for eg meat
produce, industry analyses

according 0 the inns of te tender, the
winner will be required to transform Isdemir
into a Bat sel producer within five years a an
estimated cost of $600 million-700 milion. The

years to expand Isdemir's capacity if t wins the
tender. He adds that the transaction would be
financed internally given Exdemir's song
balance sheet.

‘Privatisation is a key element of the

mid-Februzzy for the operatian and
maintenance (O&M) of water supply and
sewerage systems (MEED 14:1:00, Tenders).

Central bank plans new lira
Conmal Bank of Turkey governce Gazi Ercel on
25 April announced plans tp knock six zeros
from lira banknotes at the beginning of 2001 as
part of the disinflasion programenc.

(Excel said Introduction of the new currency
must take effect on the firs day of a new year.
“It there is a delay in technical preparations, #
a be delayed wo the beginning of 2002,” be

Excel said introduction of the new lira, which
would be equal to about $2, would be made

possible by a sharp fall in inflation over the
coming mechs. Under the three-year, IME-

target of 20 per cent. The rate is cumentty
qunning at about 65 per cent

Analysts say the move is consistent with
disinfistion, although some add that & may be
more prudent to wait until the rate of price
increases Gills w single Gigts before
ineroducing the new currency. Tangess call for a
eduction of inflation to 12 per cent by 2002
and to 7 per cent by 2008.

> US creck ratings agency Standard & Poor's
(SAP) cn 25 Apeil upgraded Turkey's long

‘The agency also raised its hong and shoe-term
foreign Currency ratings of Ziraat Bankesd

(Agricultural Bank) to B+ and B respectively
from B- and C. The outlook on the five nitings

remains positive,

(94,452 million) for the first three months of
2000. This is almost double the target of
‘TL 1,371 milion million ($2,286 million) for the
quamter and compares with 2 deficit of
‘TL 109 milion million ($182 million) recorded
in the fiest cee months of 1999. The
tumaround refiected 2 $1 per cent dollartesm
increase in tax revenues and a 15 per cent rise
ins non-tax revenues. say the
goverment ts likely to meet the Ascal tangets
disinflation

defick of 2.7 per cont last year (MEED 14:1:00),
2 The government has postponed the award
of the tender to build the Aldcuyu nuclear
power plies for a further theee months, The
winner was due to be announced on 22 Apeil.
‘The dhree groups bidding to build the

$2,500 million-4,000 million plant have been
asked by the state-owned Turkish Electricity
Generation & Transmission

(TEAS) to extend the validity of their bids uneil
24 July. Officials say the treasury’s refuzal to
guarantee the financing of the plant uncl 2005

be doubled in size ar a funare date. Shurwedar

16 May. The election, by the 550 MPs, sated
00 27 April. The consensus follows fears that

programe.
peices at the istanbul Stock Exchange rose $ per

and Tokyo Electric Power

Developers will bid for the work on the
bests of making a minoeity ineres in a new

‘on a buiid-own-cpesie (BOO) basis. The
plant is expected to have capacity of 1,500 MW
and 100 milion gallons a day. The extensive

00500000001740

————$$_——$


[(b)(5)]

From Newhouse cam P [mailto:NewhouseSP@state.gov]

Sent: Friday, 18, zor! gov PM
To: 'marshall.mil nilegeso.
Subject: Turkey mOinsees

Marshall:
this has taken so long, several people still have not gotten back to

me, but this is basically what we were thinking of asking the Turkey team to
talk to us about. tit ree know what at you think:

((b)(5)]

Newhouse
omen Develo t Finance
Us. Department o State
(202) 647-8988

00500000001485


((b)(5)]

Regards, Robin

ce: ex.mail(*Eizabeth K Stewart", "Jmazur@worldbank.o...

00500000001781


—~Onignal Message——~
From: Mis, Marshall

‘Sent Friday, February 09, 2001 9:42 AM

Tor Capp, Gene; Stewart, Ekzabeth K.

Ce: Grewe, Maureen; Stedman, Lousiien

Subject: URGENT: Conference Call on Turkey Energy Issues and IFIs at 10:15-10:30

Importance: High

Details to follow.
Should anyone from GC and/or the IMF office participate?

00500000001812


- -FEB-@1-2081 17:14 Sd oo

His Excellency Bulent Ecevit
June 13, 2000

Page 4

E. a Public Benefit Interest Resolution from the Ministry of
Energy and Natural Resources;
F, a posted and current performance bond;
G. a formal letter of interest from an internationally recognized financial institution.

Ifa project can substantially fulfill these criteria, we believe it is in the best position to
help Turkey bridge the energy gap between today’s problems and the promise of a new, market-
oriented system for the future. The private sector is doing its best, and has devoted substantial
resources, to participate in the privatization of the energy sector in Turkey. It is not only fair, but
good policy for the Turkish Government to continue support of that transition if it hopes to avoid
major energy shortages,

‘We have submitted the observations and proposals contained in this letter because our
companies are friends of Turkey. When a bilateral issue arises in Washington, we are among the
first to commit resources that will resolve the issue in a manner that promotes our bilateral
relationship. We are also investors in energy sectors around the world. We hope that you and
your government may find our experience and point of view useful as you finalize and implement
the transition to a deregulated energy market.

We would welcome the opportunity to meet with you in person to discuss this matter
more fully. Ifyou or any official from your government would like to discuss the content of this
letter with a representative of any of our companies, please advise our Ambassador, Mark Parris,
and we will respond in a timely and forthright manner.

Respectfully submitted,

‘

Charles R. Johnston,. Jr. On behalf of

Forester Wheeler Corp.
GE Power Systems
Howard Energy Company
North American Coal Company
PSEG Global Inc.
cc: The Honorable Mark Parris
Ambassador
U.S. Embassy-Ankara
Won IpxMivi

‘TNES8-001 O1BHRIOL

00500000001616


Turkey Energy Law Response
Dear Mr. Briggs:

{(b)(5)]

I hope that you will find this information helpful.

Sincerely,
Todd Crawford

00500000001520


{(b)(5)]

We toft further discussion of proposed actions for the 2 pm meeting between Steve Radelet and Janice Bay of

Piease call me if you have further questions.

—-~Original Messagen---

From: Stedman, Louelien

Sent: Friday, February 05, 2001 10:24 AM

To: Mills, Marshall; Capp, Gene; Stewart, Elizabeth K.

ca Grewe, Maureen; McDonald, Larry

‘Subject: RE: URGENT: Dial-in Instructions for Conference Call on Turkey Energy Issues and IFis at 10:30
Importance: High

((b)(5)}
~—--Oniginal Message=---
From: Mills, Marshal
Sent: Friday, February 09, 2001 10:20 AM

To: Stedman, Loustien; Capp, Gene; Stewart, Elizabeth K,

(Ce: Grewe, Maureen; McDonalc, Larry

Subject: (URGENT: Dial-in Instructions for Conference Call on Turkey Energy Issues and IFIs at 10:30
Tmportance: High

Call 647-0817, code 7890.

oo

{(0)(5)]

The conference call is at the staff level, prior to 2 DAS jevel meeting this afternoon at 2 pm. | am covering for

ISM.
Marshal
--—-Driginal Message=--~
From:
‘Sent: Friday, Pebrusry 02, 2001 10:11 AM
To: Mills, Marshall; Clagp, Gene; Stewart, Elizabeth K.
cc; Grewe, Maureen;

; MeDonald, Larry
Subject: RE: URGENT: Conference Call on Turkey Energy Issues and IFls at 10:18-10:30
Importance: High

{(b)(5)]

Who is taking the call? Steve? Mark? The Secretary?

---Original Message-—--
From: Mills, Marshall
‘Sent: Friday, February 09, 2001 9:57 AM

2

00500000001814


Turkey Energy Law Response — Suggested edits from ISM
Dear Mr. Briggs:

{(b)(5)}

Sincerely,
Todd Crawford

00500000001589


From: Clapp, Gene
Tor ‘aeticaguuchckant org. ter Layen
‘0:
Ce: Clapp, Gene; PERUKOFF Qi imf.org; Mills, Marshal; Grewe, Maureen; Stedman, Louellen;
tcrawford@world! smergy Rector Meeting Elizabeth K.
Subject: RE: FW: ‘pean energy
{(b)(5)]
—— Original Message----

From: rritterhoff@worldbank.org [mailto:rritterhoff@worldbank.org])
Sent: Friday, January 26, 2001 10:20 AM

To: Luyen.Tran@do.treas.gov

Cc: Gene.Clapp@do.treas.gov; PBRUKOFF@imf.org;
Marshall.Mills@do.treas.gov; Maureen.Grewe@do.treas.gov;
Louellen.Stedman@do.treas.gov; tcrawford@worldbank.org
Subject: Re: FW: Turkish Energy Sector Meeting

{(b)(5)]

Luyen.Tran@do.treas.gov on 01/26/2001 08:43:23 AM
1

00500000001800


Stewart, Elizabeth K.

Fi {raserhohiwordbenk
Sent: Wednesd: sean 8 2 2001 3:21 PM
& Laven. te ar cor Maureen. Grewe!
2 n.
BEROKOEF an! ors Le Ree eae toss now weapon eworeben k.org;
Subject: RE: FY: pai all action request on Turkey Electricity Law and IFI conditionallity
{(b(5))

Marshall .Millsado.treas.gov on 02/14/2001 03:07:58 PM

To: Luyen.TransDo.Treas.Gov, Maureen.GrewesDo.Treas.Gov,
gene. Clapp@Do.Treas.Gov, Blizabeth.K.Stewart@Do.Treas Gov,
‘ry .McdonaldaDe.Treas.Gov, RritterhoffeWorldbank.Org
ee: Porukot teint. Org

Subject: RE: FYI; Embassy action request on Turkey Electricity Law and IF

conditionality
{(b)(5)]
> -Original Message-----
> Tran, Luyen
> Wednesday, Pebruary 14, 2002 2:51 PM
> To: Mills, Marshall; Grewe, Maureen; Clapp, Gene; Stewart, Elizabeth K.;
> McDonald, Larry; ‘Robin Ritterhoff (B-mail)'
> Cer *Patti Brukoff (E-mail)*
> Subject: RE: FYI: Bmbassy action request on Turkey Electricity Law
> and IFI conditionality
{(b)(5)]
>
> ween Original Message~~----
> From Mills, Marshall
> Sent: Wednesday, February 14, 2001 2:48 PM
> To: Grewe, Maureen; Clapp, Gene; Stewart, Elizabeth K.; Tran,
> Luyen; McDonald, Larry; Robin Ritterhoff (&-mail)
> Cc: Patti Brukoff (E-mail)
> Subject: FYI: Embassy action request on Turkey Electricity
> Law and IPI conditionality
> Importance: High
>
{(b)(5)]

00500000001582


Stewart, Elizabeth K.

— $$$ $$ ————_—__—_—
From: imiterhofi@wordbank.

Sent: ‘Thursday, ‘ebruary 15, 2001 8:36 AM

To: Maureen. Crewe Qo, treas.gov; Marshall. Mills@do.treas.gov;,

Ce: Liver Trango vee. W: Gene Clapp@do.treas.gov

Subject: Re: Turkey issu 9m

Importance: High

my answer to Ajay's clarification, {()(5))

ae eee ewe e en se eres nrst- Forwarded by Robin Ruth Ritterhoff/Person/World Bank on

Robin Ruth Ritterhoff
02/15/2001 08:34 AM
Bxtn: 88049 EDso1

To: Ajay Chhibber

cc: Kathleen B. Mccollom, Sally M. Zeijlon, Ayse Ronay

Subject: Re: Turkey issues {Document link: Robin Ruth Ritterhoff)
Ajay, thanks very much for the clarification-- very helpful. [(b)(5)]

Regards,
Robin

Ajay Chhibber
02/15/2001 04:39 AM
Extn: 84219 EBCCO6

To: Robin Ruth Ritterhoff
eer Kathleen B. Mccollom, Sally M. Zeijlon, Ayse Ronay

Subject: Re: Turkey issues (Document link: Robin Ruth Ritterhof£)
Robin,
many thanks.

{(b)(5)]

ajay

Robin Ruth Ritterhoff
02/15/2001 01:36 AM
Extn: 86049 EDSs02

00500000001501


((b)(5)]

Luyen. Tran@do.treas.gov on 01/26/2001 08:43:23 AM

To: Rritterhoff@Worldbank.Org
ce:

Subject: FW: Turkish Energy Sector Meeting

fyi.

> -——-Original Message-----

> From: Grewe, Maureen

> Sent: Friday, January 26, 2001 8:41 AM

>To: Tran, Luyen; Stedman, Louellen; Mills, Marshall
>Cc: Clapp, Gene; Radelet, Steve

> Subject: RE: Turkish Energy Sector Meeting

>

{(b)(5))

>

> Marshall -- did you get a fax from Phyllis?

>

> ---—-Original Message-—---

>From: Tran, Luyen

> Sent: Friday, January 26, 2001 8:28 AM

>To: Stedman, Louellen; Grewe, Maureen; Mills, Marshall
> Subject: FW: Turkish Energy Sector Meeting

>

{()(5)]

00500000001806


Stewart, Elizabeth K.

_—_—_——$—_$

Sent Mi May 21, 2001 3:41 PM
To: Milo, Marsha ‘ ,
Ce: Stewart, Elizabeth K
Subject: RE: Turkey energy sector questions
| think this is fine. [(b)(5)]

~-—-Original Message—-

From: Mills, Marshal

Sent: Monday, May 21, 2001 12:30 PM

Te: Clapp, Gene; Stewart, Etzabeth K.

‘Subject: FW: Turkey energy sector questions

Gene, Elizabeth,

Please see State's email below.

After discussing this with Robin, we propose sending the following email back to them. Please let me know if you have
any questions or suggested changes to the questions.

Thanks,
Marshall

tee

{(b)(5)]

1
00500000001546


MAY-24-2082 17:84 ICM

subject Turkey ERL- wesponsen ol USDOC questions -Reply
[(o)(5)]

Thanks. Malachy.
Malachy,

((b)(5)]

We continue to hope for US Treasury assistance in arranging a meeting

{o discuss some of these issues in more detail.

Thanks,
Michael B.

222 622 G837 P.a4

COMA

Gee? como

{(b)(5)]

00500000001756


Stewart, Elizabeth K. _ =

From: Mills,
Sent: Friday, 09, 2001 1:05 PM
To: Stedman. ; Clapp, Gene; Stewart, Elizabeth K_; Ti
Grewe, Maureen; McDonald, Larry; ‘Robin Ritterhoff (Email) ‘Patti Brukoff (E-mail)'

Subject: RE: Readout of Today's Staff Level Conference Call on Turkey Energy Issues and IFis
{(b)(5))

——Original Message—-—

From: Stedman, Loueilen

Sent: Friday, February 09, 2002 1:00 PM

To: Mis, Marshall; Capp, Gene; Stewart, Bizabeth K.; Tran, Luyen

ca Grewe, Maureen; McDonald, Larry; 'Rabin Ritterholl (E-mail)"; ‘Pats Brukott (E-maily

Subject: RE: Readout of Today's Staff Level Conference Cail an Turkey Energy Issues and IFIs

[(b)(5))

Thanks.

--—-Criginal Message—-

From: Mis, Marshall
Sent: Friday, February 09, 2001 12:44 PM
To: pewing hanover trad ‘Stewart, Bizabeth Kj Tran, Luyen

cc Maureen; McDonald, Larry; Robin Ritterhort (E-mail); Patt Brukoff (E-mail); Mis, Marshal
Subject: Rondoce of Todor’s Sa” Level Crterence Call on Turkey Energy Issues ano IFIs

Importance: High

{(b)(5)]

00500000001597


[(6)(5)]

Margaret, where do we go from here?

Forwarded by Robin Ruth Ritterhofl/Person/World
Bank on
05/02/2000 02:39 PM

James Parks
06/02/2000 01:14 PM
Phone: 579+250  ECSPE

To; Robin Ruth Ritterhott

cc: Ajay Chhibber, Sally M. Zeijlon, James Sayle Moose, Kathleen B.
Mccollom

Subject’ Turkey ERL
Robin,

{(b)(5)]

00500000001775


From: Mills, Marshall
Sent: Thursday, February 15, 2001 9:29 AM.
To: Radelet, Steve; Grewe, Maureen; C! Gene; Stewart, Elizabeth K.
Ce: Patti Brukoff (E-mail); Robin Ritterh mail)
Subject: FW: Turkey: TOORS: deadline extended to June 30, Feb 15, 2001
importance: High

bier tnt

From: Bender Securities [mailto:BenderSecurities @BenderSecurities.com]
Sent: Thursday, February 15, 2001 4:51 AM

To: ‘marshall mill: .treas.gov"
Subject: Turkey: : deadline extended to June 30, Feb 15, 2001
importance: High

[(o)(5)]

00500000001929


——Ori inal Mess
From: imailto:NewhouseSP@state.gov]

Sent: Fi 18, 2001 i “4PM
To: ' Fay 1,200

Subject Turkey questions

Marshall:

((b)(5)]

00500000001939


MRY-24=2002 17:84 Icm 232 622 8637 P.G
From: Malachy Nugent
To: Dom 13.D0P08(BEASLEYM, CLAPPG, ColbyM, EPSTEINR, GR...
Date: 6/2/00 11:32am
Subject: Re: Turkey ERL -- responses to USDOC questions -Reply -Reply
((b)(5)]
Thanks. Malachy.

>>> ex,mail,"rritterhati@worldbank.org” 05/03/00 11:07am >>>

((b)(5)]

Malachy. Nugent@ddo.treas.gov on 06/03/2000 10:14:17 AM

To: Mary.Beasley@Do, Treas.Gov, Gene. Ciapp@Do.Treas.Gov,
Robin. in@Do. Treas.Gov, Maureen.Grewe@Oo.Treas.Gov,
‘Sheila Herling@0o. Treas.Gov, Matgaret,Kuhlow@Do. Treas,Gov,
Meg. Lundsager@Do. Treas Gov, Elizabeth.K. Stewant@Do.Treas.Gov,
Gene, Clapp@ Do. Treas.Gov, Malachy.Nu: Do. Treas.Gov,
Margaret Kuhiow®@Do, Treas.Gov, Robin Ruth irhott

cc: Ellzabeth.K.StewartDo, Treas.Gov, Janice L. Mazur Eds.

Mary Boasley@Do. Treas.Gov, Maureen.Grewe@Do.Treas.Gov,
Meg.Lundsager@Do. Treas,Gov, Robin. Epstein@00. Treas.Gov,
Sheila Hering@Do.Treas.Gov

Subject: Turkey ERL -- responses to USDOC questions -Reply

Date; 05/03/2000 10:08 am (Wednesday)

From; Malachy Nugent
To: Dom13.DOPO6(BEASLEYM, CLAPPG, EPSTEINR, GREWEM, HERRLINGS,
KUHLOWM, LUNDSAGERM, StewartEX),

00500000001755


To: Mis, Marshall; Capp, Gene; Stewart, Elizabeth K.

Ca Grewe, Maureen; McDonald, Larry

Subject: RE: URGENT: Dtal-in Instructions for Conference Call on Turkey Energy Issues and IFIs at 10:30
Importance: High

{((b)(5)]

—~Onginal Message-—--

From: Mills, Marshal

Sent: Friday, February 09, 2001 10:20 AM

To: Stedman, Lovelien; Clapp, Gene; Stewart, Elzapeth K.

Ce: Grewe, Maureen; McDonald, Larry

Subject: URGENT: Dial-in Instructions for Conference Call on Turkey Energy Issues and IFIs at 10:30
Importance: High

Call 647-0817, code 7890,

{(b)(5)]

The conference call is at the staff level, prior to a DAS level meeting this afternoon at 2 pm. | am covering for ISM.
Marshall

-~~-Orignal Message-—=+

From: Stedman, Louelien

Sent: Friday, February 09, 2001 10:15 AM
To: Mils, Marshall; Clapp, Gene; Stewart, Elizabeth K.
(Ce: Grewe, Maureen; McDonald, Larry

‘Subject: RE: URGENT: Conference Call on Turkey Energy Issues and IFis at 10:15-10:30
Importance: High
{(b)(5)]

Who is taking the call? Steve? Mark? The Secretary?

~-~Original Message-—-

From: Mills, Marshall

Sent: Friday, February 09, 2001 9:57 AM

To: ‘Stedman, Lovelien; Clapp, Gene; Stewart, Elizabeth K.

cc: Grewe, Maureen

‘Subject: RE: URGENT: Conference Call on Turkey Energy Issues and IFIs at 10:15-10:30

Sorry to throw you in the middle of this ... [(b)(6)]

((b)(5)]
Original Message——~
From: ‘Stedman, Louellen
‘Sent: Friday, February 09, 2001 9:44 AM
To: Mills, Marshall; Clapp, Gene; Stewart, Elzabeth K.
Ce: Grewe, Maureen
Subject: RE: URGENT; Conference Cal on Turkey Energy issues and IFIs at 10:15-10:30
Who is the conference call with???

00500000001915


To: Ajay Chhibber
eer Kathleen 8. Mccollom, Sally M. Zeijlon, Ayse Ronay

Subject: Turkey issues

Ajay-- for some mysterious reason, the first time I sent the message below,
Lotus Notes decided not to send it to you, despite my having addressed it to
you. Here it is again.

Regards,

Forwarded by Robin Ruth Ritterhoff/Person/World Bank on

Robin Ruth Ritterhoff
02/14/2001 06:34 PM
Extn; 89049 EDs01

Tor
cc: Kathleen B. Mccollom, Sally M. Zeijlon, Ayse Ronay
Subject: Turkey issues

Ajay--

{(b}(5)]

Regards,
Robin

00500000001573


vv

From: Coffman, Phyllis

Sent: Thursday, January 25, 2001 6:09 PM

To: Clapp, Gene; Stewart, Elizabeth K,; Tran, Luyen
Subject: Turkish Energy Sector Meeting

Priday, January 26 at 3:00 pm in Bill’s office.

00500000001911


Tran,

From: Mills, Marshall

Sent: Friday, February 09, 2001 7:22 PM

To: org’; Milis, Marshall; Stewart, Elizabeth K,; PBRUKOFF @imf.org
Ce: Grewe, Maureen; Tran, Luyen

Subject: RE: Turkey Energy Letter

ISM suggested edits are attached.

[(b)(5)]

Marshall

---—Original Message-----

From: rritterhoff@worldbank.org [mailto:rritterhoff@worldbank.org]
Sent: Thursday, February 08, 2001 5:21 PM

To: Marshall. Mills@do.treas.gov; Elizabeth.K.Stewart@do.treas.gov;
PBRUKOFF@imf.org

Cc: Maureen.Grewe@do.treas.gov; Luyen.Tran@do.treas.gov
Subject: Turkey Energy Letter

((b)(5)]

(See attached file: Turkey Energy Letter 012501 rev.doc)

00500000001819


((b)(5))

The conference call is st the staff level, prior to a DAS level meeting this afternoon at 2 pm. | am
covering for ISM.

Marshall
~—-Criginal Message-—
From: ‘Stedman, Louelen
Sent: Friday, February 09, 2001 10:11 AM
a Mills, Marshall; Capp, Gene; Stewart, Eizabeth K.

Grewe, Maureen; McDonald, Larry
Subject: RE: URGENT: Conference Call on Turkey Energy issues and IFIs at 10:15-10:30
Importance: High

{(b)(5)}

‘Who is taking the call? Steve? Mark? The Secretary?

——Ongnal Message-——-
From: Mills, Marshall
Sent: Friday, February 09, 2001 9:57 AM
a ‘Stedman, Lovelien; Capp, Gene; Stewart, Elizabeth K.
Cc: Grewe, Maureen
‘Subject: RE: URGENT: Corference Cail on Turkey Energy Issues and IFts at 10:15-10:30

Sorry to throw vou in the middle of this ... [(b)(6)]

{(6)(5)]
--—-Original Message
Prom: Stedmen, Lovellen
Sent: Friday, February 09, 2001 9:44 AM
To: Mills, Marshall; Capp, Gene; Stewert, Gizabeth K.
ca Grewe, Maureen:
Subject: RE: URGENT: Conference Ca on Turkey Energy Issues and IFIs at 10:15-10:30
Who is the conference call with???
Original Message——
From: ‘Mills, Marshall
Sent: Friday, February 09, 42 AM
To: Can, cane, Stewart, Eaten
Ce: Sas paren: Stedman, Louellen
‘Subject: URGENT: Conference Call on Turkey Energy Issues and IFls at 10:15-10:30
Importance: High

Details to follow.
Should anyone from GC and/or the IMF office participate?

00500000001526


{(b)(5)]

‘Thanks again for your interest in Turkey's energy reform program.
Please let us
know if you have further questions.

Regards, Jim Parks

{(b)(5)]

———_—-———— Forwarded by Sally M. Zeijlon/Person/World Bank on
DALZBIZOOO 03:29 AM nnn

Robin Ruth Ritterhoft
(04/28/2000 06:01 PM
Ext: 68049 —ps01

00500000001771


Tron, Luyen

From: Mills, Marshall

Sent: Wednesday, February 14, 2001 2:48 PM

To: Grewe, Maureen; Clapp, Gene; Stewart, Elizabeth K.; Tran, Luyen; McDonald, Larry; Robin
Ritterhoft (E-mail)

Ce: Patti Brukoff (E-mail)

Subject: FY: Embassy action request on Turkey Electricity Law and FI conaitionality

Importance: High

{(b)(5)]

00500000001821


{(b)(5)]

maureen & marshall -- probably would make sense to have one of you there.
please call gene to see what has transpired on this. thanks.

vuww

Message
From: Coffman, Phyllis

>
> Sent: ‘Thursday, January 25, 2001 6:09 PM

> To: Clapp, Gene; Stewart, Elizabeth K.; Tran, Luyen
> Subject: Turkish Energy Sector Meeting

>

>

Friday, January 26 at 3:00 pm in Bill's office.

00500000001538


Mills, Marshall

ed EE UETIEaInane

From: » Spimak, Madelyn [SpimakM@state.gov]
Sent: Friday, January 26,2001 10:43 AM

To: Mills, Marshall

Subject: Background on the energy issue
Background:

[(b)(5)]

The classification of this e-mail is: UNCLASSIFIED

00500000001642


challenge to Dabhol and how it is resolved." __

He said cesplie partnerships in sofware ead information technic us
were wal ia because of political pressures ani

state level that had slowed the economic reform .

Susceing the need % swenginer business toe India, Celeste focused on

the Enron project and asked "The Dabhot power pla plant remain a sy! mot of

successful American investment in India and not a symbol of the impediments that

still hinder even greater foreign direct investment.”

Copy! (c) 2001 Dow Jones: an
Resbhied Ly NowsSOGEL AN 23 wii
aeOriginal —
From: Rao, Geetha
‘o: , Maureen;
a ; Clapp, Sens

Subject FW: {ndayDabho! Meeting

cached is background material forthe Enron meeting on Wednesday. Pis. note Mr. John Hardy will aiso be

—-—Original
From, Tom, mrapeerron com mailto:Tom. Sriggs@enron,com])
Sent: Monday, nuary 22, sont tss PI

Subject IndiatSabhot Mesting

Geetha,

apologies for the delay in sending this material. | have lost both
My apologies for the cess sc | ana bi oversbelmed. ”

John Hardy will be attending the meeting tomorrow at 3. ((by(6)]
could remind me

acsres ofthe mating! woud appreciate I managed to lose that as.

John and | have a brief agenda: Paws want to update you on Dabhol and 2)
‘we want to discuss way in which the USG may become involved in

market reform necessal to extract value out of our generating asset
Specifically, we we want to focus on refgorm at the Indian federal level that
will be

necessary to deliver power to customers other than MSEB.
We look forward to meeting you tomorrow,

(See attached file: Dabho! PPA - DC Talking Points.doc) << File: Dabhol PPA - DC Talking Points.doc >>

00500000001545


Tran, Luyen _ =

From: Stewart, Elizabeth K.
Sent: Friday, January 26, 2001 2:23 PM

To: Sepp. Gene; ‘rritte bank.org'; Tran, Luyen

Ce: ‘PBRUKOFF @inf.org’; Mills, Marshall; Grewe, Maureen; Stedman, Louellen;
“tcrawfo! SaDANK.OT

Subject: RE: FW: Turkish Energy Meeting

[(b)(5)]

-----Original Message-----

From: Clapp, Gene

Sent: Friday, January 26, 2001 10:38 AM

To: ‘rritterhoff@woridbank.org’; Tran, Luyen

Cc: Clapp, Gene; PBRUKOFF@imf.org; Mills, Marshall; Grewe, Maureen;
Stedman, Louellen; tcrawford@worldbank.org; Stewart, Elizabeth K.
Subject: RE: FW: Turkish Energy Sector Meeting

((b)(5)]

-----Original Message-----

From: rritterhoff@worldbank.org [mailto:rritterhoff@worldbank.org]
Sent: Friday, January 26, 2001 10:20 AM

To: Luyen.Tran@do.treas.gov

Cc: Gene.Clapp@do.treas.gov; PBRUKOFF@imf.org;

Marshall. Mills@do.treas.gov; Maureen.Grewe@do,treas.gov;
Louellen.Stedman@do.treas.gov; tcrawford@woridbank.org
Subject: Re: FW: Turkish Energy Sector Meeting

{(b)(5)]

00500000001805


{(6)(5))

Robin Ritterhoff

00500000001702


Stewart, Elizabeth KO

From: eepe. Gene

Sent: Friday, January 26, 2001 10:30 AM

To: Coffman, ;, Stewart, Elizabeth K.; Tran, Luyen

Subject: RE: Turkish

This thing [(b)(5)] $0 | have invited more people: Robin Ritterhoff from USED/W8, Patti Brukotf

from USED/IMF, and Marshall Mills, Treasury Desk.

~-n Original Message---~

From: Coffman, Phylits

Sent: ‘Thursday, January 25, 2001 6:09 PM

To: Clapp, Gene; Stewart, Bizabeth Kj Tran, Luyen
‘Subject: ‘Turkish Energy Sector Meeting

Friday, January 28 at 3:00 pm in Bill's office.

00500000001539


Tran, Luyen

From: Stewart, Elizabeth K.

Sent: Friday, Fi 09, 2001 1:05 PM

To: Mills, Marshall; man, Louellen; Clapp, Gene; Tran, Luyen

Ce: grewe, Maureen; McDonald, Larry; ‘Robin Ritterhoff (E-mazl)’; ‘Patti Brukoff (E-mail); Paulson,
are

Subject: RE: Readout of Today's Staff Level Conference Call on Turkey Energy Issues and IFIs

Adding Sara to this e-mail chain.

Maureen/Marshall: Think that Bill Schuerch should be looped into the invitation to the 2pm meeting.

oe Message-----
From: Mills, Marshall
Sent: Friday, February 09, 2001 12:44 PM
To: ‘Stedman, Louellen; Capo, Gene; Stewart, Elizabeth K.; Tran, Luyen
Ce: Grewe, Maureen; McDonald, Larry; Robin Ritterhotf (E-mat); Patti Bruko'f (Email); Mills, Marshall
‘Subject: Readout of Today's Staff Level Conference Cal on Turkey Energy Issues and IFIs
Importance: High

((b)(5)}

00500000001816


Tran, Luyen

From: Mills, Marshall

Sent: Friday, Feb 09, 2001 12:44 PM

To: Stedman, Louellen; Clapp, Gene; Stewart, Elizabeth K; Tran, Luyen

Ce: Grows, Maureen: McDonald, Larry; Robin Ritterhoff (E-mail); Patti Brukoff (E-mail); Mits,
Subject: Readout of Today's Staff Level Conference Call on Turkey Energy Issues and IFis
Importance: High

[(b)(5)]

Please call me if you have further questions,

Original Message---~
From: Stedman, Lavelle
Sent: Fricay, February 09, 2001 10:24 AM

00500000001810


{(b)(5)]

cee discussion of proposed actions for the 2 pm meeting between Steve Radelet and Janice Bay of

Please call me if you have further questions.

--—-Original Message--——

From: Stedman, Louelien

Sent: = Friday, February 09, 2001 10:24 AM

To: Mills, Marshall; Capp, Gene; Stewart, Elizabeth K.

Ce: Grewe, Maureen; McDonald, Larry

Subject: RE; URGENT: Dial-in Instructions for Conference Call on Turkey Energy Issues and IFis at 10:30
Importance: — High

{(b)(5))

-—-—-Original Message-—
From: Mils, Marshall
‘Sent: Friday, February 09, 2001 10:20 AM

To: Stedman, Louellen; Capp, Gene; Stewart, Elizabeth K,

Cc: Grewe, Maureen; McDonald, Larry

Subject: URGENT: Dial-in Instructions for Conference Call on Turkey Energy Issues and IFIs at 10:30
Importance: High

Call 647-0817, code 7890,

-

{(b)(5))

The conference call is al the staff level, prior to a DAS level meeting this afternoon at 2 pm. | am covering for

ISM.
Marshall
——Original Message—--
From: ‘Stedman, Louiien
Sent: Friday, February 09, 2001 10:11 AM
To: Mils, Marshal; Clapp, Gene; Stewart, Eizabeth K.
Cer Grewe, Maureen; McDonald, Lary
‘Subject: RE: URGENT: Conference Call on Turkey Energy Issues and [FIs at 10;15-10:30
Importance: High

{(b)(5))

Who Is taking the call? Steve? Mark? The Secretary?

---Original Message--~-
From: Mills, Marshall
Sent: Friday, February 09, 2001 9:57 AM
To: Stedman, Louelien; Clapp, Gene; Stewart, Elzabeth K.
Cc: ‘Grewe, Maureen
Subject: RE: URGENT: Conference Call on Turkey Energy Issues and IFis at 10:15-10:30

Sorry to throw you in the middle of this ... [(>)(6)]
2

00500000001817


Stewart, Elizabeth K.

—————_—_—_————

From: Mills, Marshall

Sent: Thu , February 15, 2001 11:32 AM

To: ‘Tver skigenad lbank.org'; Grewe, Maureen; Mills, Marshall; Stewart, Elizabeth K.
Ce: Tran, Luyen; Clapp, Gene; Patti Brukoff (E-mail)

Subject: RE: Turkey issues and Bank

Thanks very much for pursuing this, Robin.

{(b)(5)]

Marshall

o----' Original Message----~

From: rritterhoff@worldbank.org [mailto:rritterhoffeworldbank org]
Sent; Thursday, February 15, 2001 6:36 AM

To: Maureen.Greweedo.treas,gov; Marshall .Millsgdo.treas.gov;
Elizabeth.K.Stewartedo.treas.gov

Cc: Luyen.Tran@do.treas.gov; Gene.Clappido.treas.gov

Subject: Re: Turkey issues

Importance: High

my answer to Ajay's clarification. {(b)(5)]

weer r rns ness eetr err n- Forwarded by Robin Ruth Ritterhoff/Person/World Bank on
02/15/2001 08:34 AM -~-~--------s-e08er7------*

Robin Ruth Ritterhoff

02/15/2001 08:34 AM

Extn: 96049 EDSO1L

To: Ajay Chhibber
cc: Kathleen B. Mccollom, Sally M. Zeijlon, Ayse Ronay

Subject: Re: Turkey issues (Document link: Robin Ruth Ritterhoff£)
((b)(5)]

Regards,
Robin

Ajay Chhibber
02/15/2001 04:39 AM
Extn: 64219 ECCOG

To: Robin Ruth Ritterhoff
ec: Kathleen B. Mccollom, Sally M. Zeijion, Ayse Ronay

00500000001576


Stewart, Elizabeth K.

From: Mills, Marshi
Sent: Friday, F 09, 2001 7:22 PM
To: ‘rritternot nk.org’: Mills, Marshall; Stewart, Elizabeth K.; PBRUKOFF @imf.org
Ce: Grewe, Maureen; Tran, Luyen
Subject: RE; Turkey Energy Letter
Tertey Energy Getter
OF2808 re...

ISM suggested edits are attached.

{(b)(5)] I can fax copies of the cable, with our comments, to
anyone who wishes.

Marshall

-----1 Original Message---~-~

From: rritterhoffeworldbank.org (mailto:rritterhoffe@worldbank.org)
Sent: Thureday, February 08, 2001 5:21 PM

fo: Marshall.Mille@do.treas,gov; Elizabeth.K.Stewart@do.treas.gov;
PBRUKOFP@imf .org

Cc: Maureen.Grewesdo,treas.gov; Luyen.Tranédo.treas.gov

Subject: Turkey Energy Letter

{(0)(5)]

(See attached file: Turkey Energy Letter 012801 rev.doc)

00500000001588


ten what I know on the Bank side-- I have talked a lot with Bank staff on
this.

{(b)(5)]

Luyen. Tranado.treas.gov on 01/26/2002 06:43:23 AM

To: Rritterhoff@eWorldbank.Org
cc:

Subject: FW: Turkish Bnergy Sector Meeting

fyi.

> Original Message----~

> Grewe, Maureen

> Sent: Friday, January 26, 2001 8:41 AM

> Tor Tran, Luyen; Stedman, Louellen; Mills, Marshall

> Ce: Clapp, Gene; Radelet, Steve

> Subject: RE: Turkish Energy Sector Meeting

{(b)(5)]

>

> Marshall -- did you get a fax from Phyllis?

>

> se---l Original Message-----

> From: Tran,

> Sent: Friday, January 26, 2001 6:26 AM

> To: Stedman, Louellen; Grewe, Maureen; Milla, Marshall

> Subject: PW: Turkish Energy Sector Meeting

>

> fyi, you should've gotten a fax from phyllis on enron's letter to bill.
> don't know if this meeting was called a little early or not; {(b)(5)]

please call gene to see what has transpired on this. thanks.

-----Original Message-----
From: Coffman, Phyllis
Sent: Thursday, January 25, 2001 6:09 PM
To: Clapp, Gene; Stewart, Elizabeth K.; Tran, Luyen
Subject: Turkish Energy Sector Meeting

vv¥vvV¥¥ VV

Friday, January 26 at 3:00 pm in Bill's office.

maureen & marshall -- probably would make sense to have one of you there.

00500000001533


‘The stage is slowly being set
for Turkey to realise its
potential as the fourth larg
est market in the -
terms of forecast energy
investment, foDowing China,
India and Brazil.

Various changes which
have been set in motion will
make it easter for developers
to secure financing and
shorten the time im which
they do 20.

‘Turkey's three-year e00-
nomic reform programme,
supported by an Interna-
tiqnal Monetary Pund (IMF)
stand-by agreement, bas
earned & Widespread positive
reaction, although tinted
with 2 waitandeee element,
‘The Turkish government
expects that some time dur-
ing the second half of the
year the Wall Street rating
‘agencies will upgrade the
country’s sovereign rating.
Turkish debt has been sub-
investment grade since 164.
‘This will make borrowing
easier, cheaper and ampler.

Sovereign borrowing has
received a warm welcome,
which sugars well for pro}
ect Onancing. Almont half of
the $6tm of the Treasury's
year 2000 borrowing require
ment was raised in the first

‘A mechanism for resorting
to international arbitration
in cases af disprates Lnvolv:
ing the state bas been intro-
duced. This has eliminated =

prebonsive agreement with
the World Bank which will
reinforee the legal frame
work, establish an energy
regulatory body, and put &
hhalt to costly “take or pay”
| deals. The agreement is
expected to be approved by
the World Bank's board of
Girectars on April 13, leading
to the releane of # §720m
Joan to underpin econemic
reform.

“The most important

move moch more ageres:
sively towards real market
energy models,” says Ajay
Chiibber, the bank's cous
try manager for Turkey. The
transition will be completed
by 2005.

“Another important aspect
that no existing contracts

ls

As It becomes easier and q|
move much more aggressively towards real

regarding take or pay guar
antees should be reneged
ot,” he says, “There are 15
signed "build operate and
transfer’ (BOT) and “bute
and operate’ projects. They
provide enough capacity for
a5.

“Beyond that, a market
model will come into opera:
tion and the Treasury will
ot issue buy-back guaran
tees, which have saddled
Turkey with expensive

energy.

Mr Chhibber says that an
important change has also
eccurred on the distribution
side. In 1997 the government
put to tender electricity dis
tribution rights in key
regions and $2.66n in bids
‘were received. However, the
final transfer of operating
rights has not occurred and
some companies are not
even in the market for

finance.

Concerning this “the gov
ernment would like % pro:
vide time up to the end of
the year to bring to financtal
closure the distribution
transfer rights,” he says. “
they are not financeable
then the government may
exercise its option move
towards mew contracts,
which will involve selling
assets outright.”

John MeCartby, genera)
manager of ING Barings in
Turkey, believes that the
developments kicked off by
the IMP agreement have cre-
sted a positive stmosphere
for project financing, He
says financing will be “mul-
ti-sourced", inctuding bank
loans and long term inane
ing provided by export guar:
antes agencits.

market energy models

= <

be

“There
increased trend towards pri-
vate insurers for political
risk coverage for the purely

will an

‘Turkish portions,” says Mr
McCarthy. “A trend will
develop towards the use of
project bonds, which has
newer been Gone in Turkey
before. There is # weed for
this because utilities require
sever. to 20 year financing
which commercial banks
cannot finance”

Pension funds, lured by
generous spreads difficult to
find elsewhere, have already
started smiffing around Mr
McCarthy predicts that
spreads wil] come down
“Thore is a § per cent differ
ential (between) US bonds
(and Turkish T bills). This
‘will come down: 2 per cent
can be squeezed out.”

‘Accarding to Ali Atpacar
vice-president of the Chase
Manhattan Bank in Istanbul,
in project financing “w
have moved to 2 new ares.
Closure perieds will come
down to one to two yuars,”
from 2s many #6 10.

There is a large, bidden
spread in the financing of
projects guaranteed by the
treasury, which makes it
attractive to financiers.

“The treasury indicates
the interest rate whicb it
finds acceptable,” says Zafer
‘Kurtul, deputy general man-
ager for project financing at
Akbank. "This was LIBOR
plus 2.25 and 1.50 per cent
arrangement fee, But our
agreement with the contrac
tors was for LIBOR plus 12
per cent. The contractors
paid us the difference, The
‘Treasury recently
announced that it will accept

Energetic reforms likely
to boost investment

uicker for developers to secure financing, Turkey is set to

no more than LIBOR plus
1.76 per cent. Now we change
contractors LIBOR plus 6 per
cont because interest rales
generally moved
down”

“(For financing) the mar.
eet wilt decide on the viabil
ity of the consortium,” says
Mr McCarthy. “You need
sophisticated operators.
‘Without that, no backing
Companies Tike Enron will
get access fret. No one will
finance those without a
respectable partner.”

Mr Alpacar Chase
Delinves that all BOT pro-
jects wil] secure financing
bat the going may mot be as
amooth for the transfer of
operation rights involving
energy distribution. “These
are more problematic,” he
says.” “Although there is Ro
constraction risk involved
{as in BOTs), there are ques
tions about how the system
‘will work. We have no prece-
ents. What will the (elec-
tricity) tariffs bet What will
the cash flow be tike? Per-
haps financing will be made
‘available net to the distribu-
tion company bat to the par
ent company which wan the
Boence.”

Mr Alpacar believes that
an ieaprovement in Turkey's
credit rating could become #
watershed. “When this hap-
pers the cumulative country
limits of banks will increase.
The weight of European
banks, particularly the Ger
mans,
interest of the Gulf banks
wil) also increase, both
because, in general, they
know about energy, and, tn
particular, because thetr ot
revenues are on the rise.

In future, Turkish banks will
be more involved in project
financing and they are also
Likely tn fiture to resk finan-
cing projects without # tree-

sury paarante,

“Project financing will
‘become 15 per cant of our
loan portfolio rather than 10
per cent,” says Mr Kurtul at
Akbank

“Up to now we chose risk
-free projects by working
oxclusively with the trea
sury, For the first thne we
are assessing energy projects
together with banks like
Deutsche Bank, Bank of
America, ING, and WestLB.”

00500000001688



TeN-23-2081 16:29 icr 282 622 Gos’ P.earee

His Excellency Bulent Ecevit
June 13, 2000
Page 3

current conditions and the demonopolized market that the architects of Turkey's energy future
foresee.

History is a good teacher, and it is particularly relevant to our point. In virtually every
country in which deregulation of the energy sector has been legislated (including the United
States), it has taken far longer than expected for the process to move beyond the legislattve act.
Turkey is not likely to perform differently. A hiatus on privately developed power production,
fuel supply or energy distribution projects until the new regulatory regime is operational would
be fatal for Turkey's economy. And the lack of guarantees would cause such a hiatus because
financing from private institutions would be sparse if not completely unavailable.

For the foregoing reasons, our companies believe that a transition formula for assessing
the availability of Treasury guarantees for projects currently under development best serves
existing realities and ftture objectives in the Turkish energy sector. It also minimizes the
possibility ofa real crisis in power production and delivery ifthe new regime falters or is delayed
for any reason. The formula proposed below is based on four fundamental factors:

(1) Treasury guarantees should continue to be offered for energy projects but with
certain transitional qualifications;

(2) financing for privately developed and operated energy projects in Turkey gt this
time needs Treasury guarantees,

(3) the nature end extent of the guarantees can be negotiated to meet Turkish Treasury
and commercial lenders’ requirements,

(4) Turkey's need for energy and private foreign investment and financing require that
the Turkish Government demonstrates good faith and predictability in the
implementation of its fiscal and privatization policies.

The formula that we propose for determining eligibility of a project for a Treasury
guarantee would have Treasury consider the following as indicators of a well-developed and
viable project (subject to whether the project is for power production or local distribution):

A a signed Implementation Contract or Concession Agreement,

B. an Energy Sales Agreement under negotiation or signed;

Lon a Fuel Supply Agreement under negotiation or signed,

D. _ acompleted Environmental Impact Assessment Report,
wounnay

‘TeRSTENE CADADE

00500000001622


Clapp, Gene

From: Clapp. Gene

Sent: Fr Sy, August 31. 2001 11:09 AM
To: Stewart, beth K.

‘Subject: turkey energy

[(b)(5))

00500000001955


: 1-29-0f
M Beemer = VE

Y 82-3492.

((b)(5)]

00500000001659


To: Mils, Marshall; Capp, Gene; Stewart, Elizabeth K.
Ce: Grewe, Maureen; McDonald, Larry
Subject: RE: URGENT: Dial-in Instructions for Confe = Call on Turkey Energy Issues and IFIs at 10:30

Importance: High
((b)(5)]
Original Message=-=
From: Mil, Marshall
Sent: Friday, February 09, 2001 10:20 AM
To: Stedman, Lovellen; Capp, Gene; Stewart, Elizabeth K.

cc: Grewe, Maureen; McDonald, Larry
‘Subject: URGENT: Dialin Instructions for Conference Call on Turkey Energy Issues anc IFIs at 10:30
Hon

Importance:

Call 647-0817, code 7890,

{(b)(5)]

The conference call is at the staff level, prior to a DAS level meeting this afternoon at 2 pm. | am covering for ISM.
Marshall

----Original Message——-
From: Stedman, Louelien
Sent: Friday, February 09, 2003 10:11 AM

To: Mills, Marshall; Clapp, Gene; Stewart, Bizabeth K.
Cc: Growe, Maureen; McDonsid, Larry
‘Subject: RE: URGENT: Conference Call on Turkey Energy Issues and [Fis at 10;15-10:30

Importance: High
{(6)(5)]

Who is taking the call? Steve? Mark? The Secretary?

~nn Orginal Message--—
From: Mis, Marshall
‘Sent: Friday, February 09, 2001 9:57 AM
To: ‘Stedman, Louellen; Capp, Gene; Stewart, Ezabeth K.
ca Grewe, Maureen
‘Subject: RE: URGENT: Conference Call on Turkey Energy Issues and [Fis at 10:15-10:30

Sorry to throw you in the middle of this ... [(b)(6)]

{(b)(5)}

~-~Onginal Message--—-
From: ‘Stedman, Lovefen
Sent: Friday, February 09, 2001 9:44 AM
To: Mills, Marshall; Clapp, Gene; Stewart, Elizabeth K.
Cc Grewe, Maureen
Subject: RE: URGENT: Conference Call on Turkey Energy Issues and IFIs at 10:15-10:30

Who is the conference call with???

00500000001811


EMERGY by Davia Tonge

Two steps forward,
one step back

‘A new national policy is part of a long-planned effort to ensure
that new generating capacity matches actual energy needs

may Gace further delays.

‘The delays result both
from a new national energy
policy and from the lengthy
procedures required to mod
ify contracts for generation
and distribution projects
which have been negotiated
but not yet financed.

‘The country's new energy
policy involves:

operate-transfer
model, and delaying con
tracts on many of those
which it had previously beer
encouraging. Under the BOT
model, ownership of the
plants is eventually trans
ferred to the Turkish state.
‘The new priorities are the
result of a longplanned
effort to ensure that mew
generating capactty matches
energy needs. The state plan
wing organisation (SPO) has
argued that the country
required less capacty than
the Ministry of Energy and
Natural Resources and

review, according to a minis-
try official, were that the
country needed 5iba kWh of
extra electricity output by
‘UNG = far leas than previ-
ously forecast - and (hat BO
plants should provide up to
48bn kWh of this total.
Already contracted BO
plants account for 39 of the

48bn kWh, indicating the
further tender of am addi-
onal 1,200:1,600 MW of BO

capacity.
The review ts welcome
consortia

Intergen-

Enka, SiemensSteag and
‘Mimag-National
Power. croups are final-
ising their export credit
arrangements und project
documentation. Intergen-
‘Enka is targeting financial
closure in the first half af
this year for two of Its three
natural gas units, account-
ing for 2,000MW of the
S/AGOMW of capacity it plans,
it is also welcome news for
the dozan or so HOT prajects
whose completion the Minis-
try and SPO favour in the

100 less advanced BOT pro-
jects may see minimal
returns in the short term.
Previously, the markets

‘incorporation of these princi-
ples in agreements already
reached. Most developers
asked for their contracts to
be changed to private Inw
contracts or, if this is
refused, to have interna-
tomal arbitration added,
‘Those seeking to take over
existing power plants or
power distribution under

there is no time limit set om
this ~ then the developer
will lave three months (plus
a possible further three:
month extension if the min-
istry approves) in which to
negotiate the arbitration
clause of renegotiate the
concession contact Into a

just as new legislation had
ushered in a financeable
HOT energy model, the
Tea Constitutional

and, if neceasary, revised by
the Danigtay (Council of
State). In practice, this
meant revision
of the terms of contracts
negotiated between develop:

ernment default, bay-out,
and lender step-in or assign:
ment rights, They also
lacked an arbitration clause,

jects, The result war that
developers of new indepen

swamped with BOT projects.
With a clear project sched-
ule, it should be much easier
to raise finance for those
projects whose time has
come, according to the
energy project officer at one
US bank tm Istanbul.

However, even those down
or s0 BOT projects whose
contracts are complete may
have long delays ahead of
them before before they cam
take advantage of new legis-
lation. On January 21, paris:
ment passed Law 4501 which
allows international arbitra:
tion and private commercial
law principles to apply to
concession contracts signed

with the ministry. Devetop-
ers had one month in which

to apply to the ministry for

is ® far cry from what propo-
nents of Turkey's power pro-
gramme had expected.
EBntitling foreign investors
to intermational arbitration
in their contracts with the
‘Turkish authorities seemed
to have removed the last
obstacte blocking Turkey's
BOT programme, which,
since 1964, has seen only
four big projects reach finan-
cial close = the 672MW
hydroelectric project at
Birecti in late 186 two gus
fired projects, each 4TaMW,
on the Marmara in 199% and
the gas-fired 1S0MW Istanbul
Exenyurt project in 1967,
Ironically, in March 1905,

fundamentally revised by
the Danigtay, When it
became clear that the lack af
arbitration clauses in BOT

‘the canstituti

On August 13 the Turkish
Parliament amended the
constitution to allow for
international arbitration in
concession contracts invaly-
Ing the provision of pablic
services. Enabling legisla:
tion followed in December
and January.

civil s
minis
the
Deour
“Tl
mack
Prope
that ©
struc
vitall
ing ©
ment
emit
he
for ic
anbel
whict
jams,
under
& pai
capitt
ited E
tons
wb
years
devel
Ape
such
Olam
chan
receo
tes”
renee,

00500000001686


{(b)(5)]

Regards,
Robin

00500000001834


Tran, Luyen — —

From: {riterhofi@werldbank org

Sent: Wednesday, February 14, 2001 5:34 PM

To: Maureen. do 288. 90v. Marshall, Mills@do.treas.gov
Ce: Luyen.Tran@do.treas.gov; .K Stewart@ido.treas.gov
Subject: draft e-mail

Importance: High

per steve's request, here's a draft- sorry for delay, a little bosnia vote
contretemps intervened.

Ajay--

{(©)(5)]

Regards,
Robin

00500000001823


FINANCIAL TIMES WEDNESDAY APRIL 5 2000

sand the
§ which surround it

be government ts being
sked to provide export
redit guarantees of some
wou to the chief construc:

on contractor, Balfour
eatty.
Qbjectors cluim the

sheme will force the reset-
ement of at least 15,000
winly Kurdish people, flood
ve historic town of Hasan
eyf, as well as scores of
naller villages, and enuse
ater shortages and possible
olluviien downstream in
yra and Iraq.

Its defenders maintain
dat H will being prosperity
ad economic development
y the region, where Kurdish
ilitants belonging to the
urdistan Workers’ Party
"KK) have been fighting the
urkish military 15 vonrs.
hey also insist that what a
cimarily a hydro-electric
cheme will not, by defini

tion, cause any water shart
ers ream

Although ibe [isu project
is entirely hydro-electric, the
associated Clare dam on the
‘Tigris is intended for irriga-
tion as well, for some 120,060
hectares. Indeed, while some
® per cent of the hydro

Panos Piotures

power to be produced by the
whole GAP project from
both rivers is already avail-
able, only 11 per cent of the
irrigation schemes have
been completed. A further 10
per cent is umder construc
fom, according to Dr Olcay
Unver, prasident of the GAP
administration

Use of water from the two
rivers for massive irrigation
schemes is perhaps the most
controversial aspect for
many environmentalists.
Excessive salination, and
Jack of evacuation channels
for water used in surface

Irrigation plans would hit
supplies to Syria and Iraq is
still # moot pains.

A 1987 protocol between
Turkey and Syria guaran-
teed a mintaaum flow of 60>
cumecs (cubic metres per
secant) in the Gupitrates at
border. So far, the Turks
they have more than
their side of the bar
providing an average
of around 700 cumecs. If

flow ever sinks below
600 cumecs in the dry sea
son, amy shortfall is made up
in the following month.

“This region ts cme af the
most watershort regions In
the world.” says Professor
Dogan Altinbilek, director-
general of the Agency for
State Kydraclic Works (DSI).
“You depend on rainfed irri
gation, at the mercy of the

g

i

efimate. But there doesn’t
have to de a water war in
the Middle East. Turkey uses
the least amount of water (of
the riparian states) from the
‘Tigris and Kuphrates.”

He argued that ihe Tigris,
for example, has highly
erratic water Qow, varying
by a factor of up to 40
between dry and wet sea-
sons, Annual water flow in
dry years can be only ane-
fifth of that in years of
beavy rainfall. By building
the Misu dam, the water flow
can be regulated, water
stored during the rainy sea-
gon, and the rah of flooding
decreased, be says.

He admitted, bowever,
that no progrest had been
made towards a collabora-
tion agreement on water
usage between Turkey, Syria
and Iraq. But Turkey
ingisted that it would newer
exploit its position to pros-
aurise its downstream neigh-
bours.

“Turkey bas never used
water a3 4 woapon,” he says.
“When our southers neigh:
bours wore under interna-
tional embargoes, there were
suggestions that we should
embargo water, too, This
will naver be something we
consider. We will never
make water a reason for
war,"

Prof Altinbilek also
insisted that everyone who
loses land to the GAP pro-
jects will be compensated. as

$$ $$

gaps hinder dam project

laid down by the Turkish
constitution. Moreover,
resettlement is voluntary
rather than compulsory, as
in China, he says. Those
affected had a choice af
where they went to, and
were given & howse, a plot
and rehabilitation.

Quite how much the Kurd-
ish population is involved in
genuine conaultation about
the projects is less clear. As
far as the isu dam 2 con
cerned, much of the work on
resettlement alternatives is
yet to be dome, Proper com.
pensation and resettlement
is ome of Get assurances the
British government is seek-
ing from the Turkish govern:
ment.

Indeed, it is unclear how
much the local population
supports the overall GAP

, 28 a source of
future jos, and how muct it
ts resented, as an imposition
from Ankara, and a project
designed to provide electric-
ity supplies for the rest of
the country.

What is clear is that the
Turkish authorities are
determined to press ahead
with their amtuticus plans,
however much environmen-
tal apposition they may
arouse in the outside workd.

“There is enough wuter for
everyone,” says Professor
Iter Turan, of Bilg) univer:
alty in Istanbul “But every
‘one has to treat water con
servation responsibly.”

00500000001732


{ Pipeline diplomacy to
enhance regional power

Turkey's ambitious projects have received ~—
Critical support from the US for geopolitical
reasons

“The closest thing Turkey three governments have
has to & matsonal strategy for come and gone in as many
anything ~ if it can imple yoars

ment it,” is how Ali Koc, — Progress until now has
coordinator for the develop. bee

ment of new businesses at
Kor Holding, describes the ment of the countries that
government's high profile the projects are supposed to
Dipeline politics. If that is $0, benetit, Now, however, Tur.
it bas a ict to do with the key believes that differencus
fact that Turkey is Europe's between Producers, such a3
fastest growing energy mar- Azerbaijan and Turkmen.
‘ket. Annual dewand for nat- istan, as well as Georgia, a
ural gRS alowe is expected at transit country, are resolved
least to quintuple to S0bn or so close ta resolution that line bigger picture

‘Sunger for energy, the devel, can be financed, line monopoly, which wit!
Chment of mew pipelines to After five months of wran- lead the coastraction within

S46 to western markets via gia announced on March #2 ‘Turkish section can be built
its territory would enhance that they bed finally agreed for $i4be or less. “The dif
Turkey's regional power, a compromise om Georgian

it Will not sign

Middle East, as well as the of] companies involved in Mr Vigitwaden at the energy

Hon for sellers of ofl and gas. mercial proposal for finan- Caspian gas pipeline from
The projects have also cial mstitutions to consider. Turkmenistan to Turkey ts
received powerful bucking Among western ofl compa- also “very strategic but must
from the US, Turkey's clos nics, some of which feel they be commercial toa"
est ally, for geo. were brow-beaten with the ‘The project's cay aa
polities] reasons. Washing- belp of US Pressure into sponsors, PSG, a
fon see an ail pipeline from backing Baku-Ceyhan, ture between GE Capital ‘and ian scheme to
the Azeri capital Baku to the doubts still persist, Lowaver, Bechtel of the US, and Shell,

@ Trant-Caspian Gas Pipe- cial viability, US govern- that the money will be found
Tine from Turkmenistan as ment pressure ts aguin likely to build the Project once dif-

Despite having hitherto to finance the Proposed pepe- But here, too, local rival
viewed pipeline palitics also lines. “These projects are an ries have loomed large.
a5 4 tool for isolating tran, extension of US foreign pol- Turkmenistan
the US argued that its recent icy," argues one European year began negotiating a
rapprochement with Tehran banker. “This is why you rival gas sale to Russia in
would mot alter its support will see US banks involved”. what many analysts saw as

pipelzne. tried hart to help make the to share the pepeline, follow.

actually started,
“These are top priority projects attractive to finan- ing Azerbaljan's own disco

Turkey argues

are progressing,” gays Yur- instance to guarantee any —Sileyman Demirel, the
dakul Yigitgudem, the top overruns above its S24bn Turkish president, has
vil servant at the Turkish estimate for the project, Sought to mediate between
energy ministry who has which inctudes $L4tn forthe his Azeri and Turkmen

" of the bene:
cubic metres by 2010. Projects cam move om to the  GOkhan Yardim, the chief fits of an agreement,

Apart from satisting its final test of whether they of Botss, the Turkish pépe- But Ankara has also dis-
creetly waved whatever

sticks It has to secure agree-
transport Caspian ofl and ging, Azerbaijan and Geor. Turkey, is confident that the ment. It has told Aaerbaijan

Agreement to purchase Azeri

be our profit. gas until Baku-Ceyhan
Turkey's geographic location transit fees. This removed ‘The mam [variable] parame- alised. It has also served

between Europe and the the main obstecie preventing ter in cost is steel prices." notice that it would not buy

any Tarkinen gus offered for
Caucasus and Central Asia = developing Azeri cil exports ministry stresses that the sale by Russia if Turkmen.

makes It @ strategic destina- from putting together a com- proposed $2.5bn-$9n ‘Trans istan cere to go ahead with

a far from final accord to sell
S0bn cubic metres a year to
Russia

The proposed ges pipeline
is in direct competition with |
Blue Stream, a Russian-Ital

Russian gas exports to Tur
Turkish port of Ceyhan and about the projects’ commer: all say they are confident key via the Black Sea.
Moscow and Washingto are

scrambling 0 get their pat
boosting the independence of to be brought to bear, this ferences among political dif projects off the ground first

the former Soviet republics. time tm encouraging banks ferences are resolved. for, a8 Rem Vyakhirev, head
ot Garprom, Russia's gas

monopoly, puts it, “in this
lier this race the ome who starts first
will win”, The Garprom-ENI
partnership announced eaz-
Iker this year that construc-

(rine Bakw-Ceyhan olf Meanwhile, Turkey has 4& ploy to resist Azer! efforts tion of Blue Stream ted

brojects for Turkey and both ciers. It has agreed for ery of gas reserves Inst year. ersily absorb gas from both
sources although st makes
no secret of the fact that it
views competition between

projects that may not all
Stoutly promoted beth as Turkish segment of the Pipe counterparts and paint “the succesd as healthy.

® promised

fin-

pipe more

that it can

200, se pATUAP
oud samo OpRAED
amazes ognd & p
Aajatayoaye 70 Bo
PUP UoIss|RPUeT)
x8 ou) HOI] PAP

00500000001736


Stewart, Elizabeth K.

Thanks, we'll keep you posted.

efOngnal Meszage——

From: ‘Capo, Gene

Sent: Monday, May 22, 2001 3:41 PM
To: Mils, Marshal

ce ‘Stewart, Elizabeth K.

‘Subject: RE: Turkey energy sector questions

I think this is fine. [(b)(5)]
Original Message--—
From: Mills, Marshall
Sent: Monday, May 21, 2001 32004
To: Clapp, Gene; Stewart, Elizabeth
‘Subject: FW: Shrtey energy sector questions
Gene, Elizabeth,
Please see State's email below.

After discussing this with Robin, we propose sending the following email back to them. Please let me know if you
have any qui of suggested changes to the questions.

Thanks,
Marshall

”

Suggested email back to State

{(b(5)]

00500000001484


Clapp, Gene

—___ —$<___
From: rritterhofi@worldbank,
Sent: Vipnescey, i February 14 2001 3:15 PM
‘0: en. .treas.gov
Ce: Marshall Mills@do. reas. gov; Maureen, Grewe@do.treas.gov; Gi pei 3
Elzabeth K Stewartpco feas.gov; Larry. MeDenald@do ves. gov. ian .OFg;
Lo
Subject: RE: FY: Embassy Setion request on Turkey Electricity Law and IFI conditionality
{(6)(5)]

Luyen. Tran@do.treas.gov on 02/14/2001 02:51:01 PM

To: Marshall .Mills@Do.Treas.Gov, Maureen.GrewesDo.Treas.Gov,
Gene.Clapp@Do.Treas.Gov, Blizabeth.X.Stewart@Do. Treas, Gov,
Larry .Mcdonaldebo.Treag.Gov, Rritterhoff@Worldbank.Org

co: Pbrukoff@inf .Org

Subject: RE: FYI: Embassy action request on Turkey Electricity Law and IFI
conditionality

{(b)(5))

> _se--- ‘Original Message-----
> Prom: Mills, Marehall
> Sent; Wednesday, February 14, 2001 2:48 PM

> To: Grewe, Maureen; Clapp, Gene; Stewart, Elizabeth K.; Tran, Luyen;
> McDonald, Larry; Robin Ritterhoff (E-mail)

> Cc: Patti Brukoff (B-mail)

> Subject: FYI; Embassy action request on Turkey Blectricity Law and

> IFI conditionality
> Importance: High
>

>

{(0)(5)]

00500000001923


Clapp, Gene__ —

Sent! Thursday bruary an 3, oot 8:36 AM f ‘reas.

ou ran tea! foe oan wees “
Luyen.Tran 5.

Subject: Re Turkey issues eco oy al

Importance: High

{(b)(5)}

Robin Ruth Ritterhoff
02/15/2001 08:34 AM
Extn: 68049 EDSO1

To: Ajay Chhibber
cc: Kathleen B. Mccollom, Sally M. Zeijlon, Ayse Ronay

Subject: Re: Turkey issues (Document link: Robin Ruth Ritterhoff)
{(0)(5))

Regards,
Robin

Ajay Chhibber
02/15/2002 04:39 AM
Extn: 64219 EcCcO6

Tor Robin Ruth Ritterhoff

ce: Kathleen B. Mccollom, Sally M. Zeijlon, Ayse Ronay

Subject: Re: Turkey issues (Document link: Robin Ruth Ritterhoff}
Robin,

many thanks.

{(b)(5)]

ajay

Robin Ruth Ritterhoff
02/15/2001 01:36 AM
Extn; 98049 EDs01

00500000001927


MPR 22 2031 10°15 FR ENRON TO €22803? P.02/64

Thomas C. Briggs
Vice President
Gavernment Affine
WV Enron
Corp.
4% 1775 Eye Street. NW, Suite S00
Washington, DC 20006
202-465-9169
Fire 202.828.3872
TO: Marshall Mills secbngtsrmsn
FROM: Tom Briggs
DATE: 22 March 2001
RE: Late Payments for Enron's Turkish BOT Generating Plant
FAX: 622-0037
Marshall,

Thank you for your time yesterday. Below is a summary of Trakya’s USD/TL exposure as well
as a summary of payments past due. My understanding is that the 4 BOT operators are now
exploring ways to either trigger a sale of the plants back to the Turkish Government or invoke
Turkish Treasury Guarantees. On the bright side, | was informed that BOTAS and the Turkish
Government did a great job to avoid gas curtailments this winter. As you know, custailments
require the plants to switch to expensive foreign- sourced oil and this created the payment

problems last year.

Monthly Cash Flow Split between TL and US $

Based upon 2001 forecast values the approximate monthly values and proportions of our
monthly cash flows are as follows:

uUsD TL USD TL
% % $MM SMM
Equivalent
Revenues
Fixed Capacity Fees 100% Nil 14.3MM Nil
Variable Capacity Fees 80% 20% 2.9MM 0.83MM
Excess Generation Capacity 80% 20% Not Material
Energy Charge Nil 100% Nil 14.5MM.
Associated KDV (VAT) Nil 100% Nil 5S.7MM
Operatii ‘os
Fuel Costs Nil 100% Nil 14.5MM
O&M etc 80% 20% 1.0MM
0.3MM
Associated KDV Nil 100% Nil 1,.2MM

Endless possibilities.TM

00800000000011


From: Emzabeth K. Stewart

To: Dom13.DOPO8{CLAPPG, GREWEM, NUGENTM, REICHL), ex...
Subject: USDOC’s Turkey ERL cable -Reply
Malachy -

{(b)(5)}

>>> ex.mail."rritterhofig@worldbank.org” 05/15/00 06:14pm >>>
(Eric please pass to Helen Recinos & Taylor Ruggles)

Malachy, several comments on USDOC's draft cable.
((b)(5)]

cc: ex.mail(Elizabeth.K. Stewart’, “Jmazur@worldbank.o...

00500000001709


FEB-@1-2001 iftis Sd On

His Excellency Bulent Ecevit
June 13, 2000
Page 1

June 13, 2000

IA COURIER AND FACSIMILE

His Excellency Bulent Ecevit
Prime Mini

The Republic of Turkey
Ankara, Turkey

Dear Prime Minister Ecevit:

This letter is submitted on behalf of the American companies listed below, many of
which have invested millions of dollars in the development of projects essential to meet Turkey's
energy requirements. The purpose of this letter is to request that a reasonable transition be
i by which the Turkish Undersecretariat of the Treasury makes financial guarantees
available for eligible energy-related projects. Recent communications from the Turkish
Government and World Bank indicate that such guarantees now may be withheld even though
several energy projects, after years of preperation and negotiations, are in advanced stages of
development. _

In a March 10, 2000 letter to the World Bank, Minister of State for the Economy, Mr.
Recep Onal, observed that reforms and the consequent introduction of competition in the Turkish
energy sector “takes time and the transition period must be properly managed.” Of course, in any
shift from state controls to market driven policies, transition is an important topic, worthy of
close attention. Unfortunately, it seems that proper management of the transition in the energy
sector may have fallen prey to a formulistic effort by the Bank to eradicate immediately
Treasury's contingent liabilities, The Government appears to have accepted this precipitous
approach, As a result of a Bank-sponsored “Public Expenditure and Institutional Review,”
several reforms are expected to be incorporated in the 2001 Government budget. Minister Onal
reported in his letter thet, among other things, “limits on the issuance of new guarantees” would
be part of the immediate budgetary reform package. After several consultations by
representatives of our companies with officials at Treasury, the Ministry of Energy and Natural
Resources and the Bank, it appears that for energy projects being developed under the Build-
Operate-Transfer (BOT) or Transfer of Operating Rights (TOR) models, the Government may
decide to withhold Treasury guarantees for such projects unless a project-specific agreement is
in place that provides for such guarantee,

WOU ime +1
‘86338-2001 C1aNROet

00500000001613


(()(5)]

vv

vvvvvY

maureen & marshall -- probably would make sense to have one of you there.

please call gene to see what has transpired on this. thanks.

erent Original Message-----

From: Coffman, Phyllis

Sent: Thursday, January 25, 2001 6:09 PM

To: Clapp, Gene; Stewart, Elizabeth K.; Tran, Luyen
Subject: Turkish Energy Sector Meeting

Friday, January 26 at 3:00 pm in Bill's office.

00500000001560


{(b)(5)}

Cable #029799 Dec 08
Cable #032693 Dec 13
Cable #034319 Dec 15
Cable #044561 Jan 09

—-—Onginal Message--—-

From: Grewe, Maureen

‘Sent: ‘Tuesday, January 23, 2001 8:55 AM

To: Rao, Geetha; Mils, Marshall; Sampliner, Gary; Christoputcs, Greg; Capp, Gene
(Cc: Radelet, Steve

Subject: RE: India/Dabho! Meeting

Please note the following article from this morning's press summary:
US Envoy: India's Enron Project Key To Foreign Investment

BOMBAY (AP)--U.S. Ambassador to India Richard Celeste warned Monday that
for investment in India would falter because of political pressures that

Be a a eral the $3 bilion Enron Corp. (ENE) power project.

"it regrettably feeds the concem among American and other foreign investors
that India remains a jess-than-reliable destination for their investment
dollars,” Celeste told an audience of business leaders, politicians and
nongovernment agencies in Bombay, India’s financial hub.

India's largest-ever foreign investment has been in trouble since December
after the government of herashira state, in which Bombay is situated: sald it
‘would revi ‘@ power-purchase agreement with U.S. energy giant Enron Corp.
Maharashtra considers the power rates being charged are exorbitant.

The agreement in 1995 details the rate at which Enron’s Indian
subsidiary, the D: Power Co., will sell electricity to the state.

first of 740 has been
can fecloned wie tho kacond pose of 1444 megawatts s scheduled for
completion by ‘end 2001,

tion ofthe Indian rape tare Enron project to ove grerate
power generated nron project to touch 7 rupees a
INR1. rane |

as aaa he deal ed six
(Sane 375). ° was sign years 29°

Enron has said it saw no current need to renegotiate the tariff and maintained that a transition from naphtha
to liquefied natural gas would reduce the tariff.

Cel sea woul ia sluson hong President Bill Clinton, said he ho}
both sides would find a solution in discussions, but cautioned

“perceptions among American and o! ign investors will be affected by the

2

00500000001544


MAR 22 2031 19:15 FR ENR TO §224837

FAX COVER SHEET

ENRON, WASHINGTON
1775 Eye Street Street, N.W.
Washington, DC 20008
202-828-3360
202-828-3372 (fax)

TO: Marshall Mills
FROM: Tor Briggs

oe
FAX #: ~@2Aa ~°°3>
RE:
DATE: _
Number of pages Including cover sheet: >
Message:

P.OtrO4

00800000000010


MayY-84-2002 17:35 Ten a2 622 2037 P.e6

{(2)(5)]

00500000001758


Stewart, Elizabeth K.

From: mritorhofitaworidbenk
Sent frasseay, pied 08, 2001 5:48 PM
‘0: . Tran@do.treas.gov
Ce: etter weridbank , Marshall. Mill .treas. gov; Elizabeth,K Stewart@do.treas.gov;
PBRUKOFF @imf.org; Maureen.Gi .treas.gov; Luyen. Tran@do.treas |
Subject: RE: Turkey bot . sev
‘Turkey Eeergy Latior

(12501
[(0)(5)]

Luyen.Tran@do.treas.gov on 02/08/2001 05:38:36 PM

To: RritterhoffewWorldbank.Org, Marshall.Mills®Do.Treas.Gov,
Elizabeth.k.Stewart@Do.Treas.Gov, PbrukoffeImf.Org
cc: Maureen.Grewe@Do,.Treas.Gov, Luyen.TranéDo.Treas.Gov

Subject: RE: Turkey Energy Letter

you didn't ask for my opinion, but i'm offering you a few minor changes
(attached) that you are free to take or not take.

oceee Original Message----~

From: rritterhoffe@worldbank.org [mailto:rritterhoff@worldbank.org])
Sent: Thursday, February 08, 2001 5:21 PM

To: Marshall.Mills@do,.treas.gov; Elizabeth.K.Stewart@do.treas.gov;
PBRUKOPPSimf .org

Cc: Maureen.Greweado.treas.gov; Luyen.Tranédo.treas.gov

Subject: Turkey Energy Letter

{(0)(5)]

(See attached file: Turkey Energy Letter 012501 rev.doc)

(See attached file: Turkey Energy Letter 012501 rev.doc)

00500000001602


Thanks,
Marshall

2---- Original Message---~-~

From: rritterhoff@worldbank.org [mailto:rritterheffeworldbank.org)
Sent: Tuesday, February 27, 2001 10:25 AM

To: Maureen.Grewe@do.treas.gov; Marshall .Mille@do.treas.gov
Subject: turkey disbursements

-- Forwarded by Robin Ruth Ritterhoff/Person/World Bank

on
02/27/2001 10:21 AM -

Kathleen B. Mccollom
02/27/2001 10:17 AM
Extn: 81309 ECCA2

To: Robin Ruth Ritterhoff
ce: @ohannes Linn, Shigeo Katsu, Ajay Chhibber, Nick Van Praag
Subject:

Robin:

{(0(5)]

00500000001934


Stewart, Elizabeth K.

From: mitterhoff@worldbank.ot

Sent: Wednesday, February 13, 2001 3:15 PM

To: Hr belch List reas. gov

Ce: treas.gov; Maureen .Grewe@do.treas.gov, Gene. Clap) .treas, gov;
Beabet  Stewartoo, gov; Larry.McDonakd@do. gov: bank org;

Subject: RE: FYI: Embassy acton request on Turkey Electricity Law and IFI conditionality

{(b)(5)]

Luyen.Trangdo.treas.gov on 02/14/2002 02:51:01 PM

To: Marshall.Mills@Do.Treas.Gov, Maureen.Grewe@Do,Treas.Gov,
gene. Clapp@Do.Treas.Gov, Elizabeth.K, Stewart@Do.Treas.Gov,
rry.MedonaldéDo.Treas.Gov, Rritterhoff@Worldbank.Org
eer Porekot terme. Org

Subject: RE: FYI: Embassy action request on Turkey Blectricity Law and IFT
conditionality

{(b)(5)]

IPI conditionality
Importance: High

> <+<=-Original Message- -

> Prom: Mills, Marshall

> Sent: Wednesday, February 14, 2001 2:48 PM

> Tor Grewe, Maureen; Clapp, Gene; Stewart, Elizabeth K.; Tran, Luyen;
> McDonald, Larry; Robin Ritterhoff (E-mail)

> Cc: Patti Brukoff (E-mail)

> Subject: FYI: Embassy action request on Turkey Electricity Law and
>

>

{(b)(5)]

>

> I wanted to make sure you had this information, without pre-judging any
> decision on responding to the action request. I will phonelater today to
> follow up.

00500000001515


— — ——
From: Stewart, Elizabeth K.

Sent: Thursday, February 15, 2001 11:16 AM

To: Radelet, Steve

Ce: Mills, Marshall; Grewe, Maureen; Clapp, Gene; Tran, Luyen

Subject: Turkey energy - your question

Steve,
From my notes of the 1-29-01 conference call with Jim Parks ~ [(b)(5)]

00500000001829


Clapp, Gene

From: rritterhoff@worldbenk.

Sent: Friday, Jani 26, 2009 10:20 AM

To: Luyen. Trani .treas.gov

os Maureen ewe ido Wess gow Lveton Stedman reas gor tawforstworchank
Nh. . ; Louellen .treas.gov; :

Subject: Re: FW: Turkish Energy Sextor Meeting gow °9

Luyen-- As I told Gene, I would be happy ta join Bill's 3PM internal meeting to
tell what I know on the Bank side-- I have talked a lot with Sank staff on this.

{(b)(5)]

Luyen.Tran@do.treas.gov on 01/26/2001 08:43:23 AM
To: Rritterhoff@Worldbank .Org
cc:

Subject: FW: Turkish Energy Sector Meeting

> ---ee Original Message-----
> From; Grewe, Maureen
> Sent: Friday, January 26, 2001 8:41 AM

> To: Tran, Luyen; Stedman, Louellen; Mills, Marshall
> Ce: Clapp, Gene; Radelet, Steve

> Subject: RE: Turkish Energy Sector Meeting

>

{(b)(5)]

v

Marshall -- did you get a fax from Phyllis?

¥

> ‘Original Message-----

> Tran, Luyen

> Priday, January 26, 2002 8:28 AM

> Stedman, Louellen; Grewe, Maureen; Mills, Marshall
> Subject: FW: Turkish Energy Sector Meeting

>

{(b)(5)]

Bote Original Message-----

0500000001910


Stewart, Elizabeth K.

——_____—_——. —_____——

From: Mis, Marshall
Sent: Friday, Fi 16, 2001 10:35 AM
To: Clapp, Gene; Elizabeth K,
Ce: Grewe, Maureen
Subject: FW: Errata: Turkey: TOORS: deadline extended to June 30, Feb 16, 2001
Importance: High
sonaat

Seca aie :BenderSecurities@BenderSecurities.com)

Sent ‘pray, Febru 2001 10:30 AM

To: ‘marshall.mill treas. gov

Subject: Errata: Ti ;, TOORS: deadline extended to June 30, Feb 16, 2001
Importance: High

[)5)]

00500000001511


FEB-Bi-2881 i7iis ie

. g
Fas
Liorenrho now Cotlar 202-254-2268
. Government Afaies tema brig etree 2

Te Gemowel al Counsel.
“foe Amevi con Toleish “Camel

Facsimile (202) 508-3402
‘E-mail: eqabdbs.com
cat Pesca,
may reaper 7on
= we
BEARMAN & CALDWELL oe oo
a compananen

00500000001612


>>> ex. mail. “ritterhofi@worldbank, org” 05/02/00 11:07am >>>

{(b)(5)]

Malachy. Nugent@do.treas.gov on 05/03/2000 10:14:17 AM
To: Mary, BeosieyQ0o0. Treas.Gov, Gene.Clapp@)Do. Treas.Gow,
Robin.Ep: .Treas.| :

Meg-_Lundsager@Do Treas.Gov, Elizabeth.K Stewart@Do. Treas.Gov,
Gene.Clapp@Do. Treas.Gov, Malachy, Nugent@Do, Treas.Gov,
Margaret, Kuhlow@Do.Treas.Gov, Robin Ruth Ritterhoff
ce: Elizabeth.K. Stewart@Oo. Treas. Gov, Janice L. Mazur Eds,
Mary. Beasley@Do. Treas.Gov, Maureen.Grewe@Do.Treas.Gov,
Meg.LundsagergPDo. Treas.Gov, Robin.Epsteing?Oo. Treas.Gov,
Sheila Herrling@Oo. Treas.Gov

Subject: Turkey ERL -- responses to USDOC questions -Reply

Date: 05/09/2000 10:09 am (Wednesday)
From: Malachy Nugent
To: Dom13.DOPO8(BEASLEYM, CLAPPG, EPSTEINR, GREWEM,
HERRLINGS,
KUHLOWM, LUNDSAGERM, StewartEK),
ex.mail(‘ritierhotigworldbank.org", "“Gene.Clapp”,
“Malachy .Nugent”, "Margaret Kuhiow")
CC: ex.mail(*Elizebet.K Stewart", “Jmazurgworldbank.org”,

00500000001744


((b)(5)]

00500000001747


MAY ~B4-2088 17:84 Icm 282 622 @237 P.@2
_ oe BLA LYASE ULE. qznuueuied FI
_—~

INTERNATIONAL BANK FO hoe ex10N AND DEVELOPMENT

R2000-27/2

FROM: Vice President and Secretary April 27. 2000

EXECUTIVE DIRECTORS' MEETING - MAY 18,2000 .
TURKEY - Economie Reform Loan
Scheduling of Item

The President's Report and Recommendation for a proposed Econumic Reform Loan to
the Republic of Turkey (R2000-27 dated March 21, 2000) was distributed for consideration at
the meeting of April 11, 2000 and then postponed to a date to be determined (R2000-27/1 dated
April 6, 2000). The Report is now being scheduled for discussion on Thursday, May 18, 2000.

——————_—
1 a —
Distribution:
Executive Directors and Alternates
President
Bank Group Senior Management .
Vice Presidents, Bank, IFC and MIGA

Directors and Department Ileads, Bank, IPC and MIGA

00500000001754


Stewart, Elizabeth K_ K.

From: Stedman, Lour
Sent: Friday, Fabeosry 0 09, 2001 1:08 PM
To: Mills, Marshall: C Gene, Stewart, Elizabeth Kc Tan, Luyen
Ce: Grewe, Mau Larry; 'Robin me homie (Esai: Patt Brukoft (E-maay"
Subject: RE Readout of Tadsy's staff Level Conference Cal Cail on Turkey Energy Issues and IFis
Larry will await your call, (2-0112)

= Original Message-—-

From: Mills, Marshall

Sent: Friday, February 09, 2001 1:05 PM

Tor Stedman, Lovellen; Capp, Gene; Stewart, Elizabeth K.; Tran, Luyen

Ce: Grewe, Maureen; McDonald, Larry; "Robin Rtterhott (E-mail); ‘Patt) Brukoff (E-rail)’

Subject: RE: Readout of Today's Staff Level Conference Call on Turkey Energy Issues and IFis

((b){5))

Original Message——

From:  Steciman, Loueflen

Sent: Friday, February 09, 2001 1:00 PM

To: Mills, Marshall; Capp, Gene; Stewart, Elzabeth K.; Tran, Luyen

c Grewe, Maureen; McDonald, Larry; ‘Robin Ritterhoff (E-mail; ‘Patt Brukoér (E-mail)
Subject: RE: Readout of Today's Staff Level Conference Call on Turkey Energy Issues and IFIs

{(b)(5)]
Thanks.
——-Original Message=---
From: woe Marshal
‘Sent: Friday, February 09, 2001 12:44 PM

To: Stedman, Louelien; Capp, Gene; Stewart, Bizabeth K.; Tran, Luyen

Cc: Grewe, Maureen; McDonald, Larry; Robin Ritterhoft (E-mail); Patt) Brukoff (E-mail); Mills, Marsha
‘Subject: Readout of Today's Staff Level Conference Call on Turkey Energy Issues and IFis
Importance: = High

I represented Treasury in this discussion of what to do, if anything, on this issue.

{(0)(5)]

00500000001524


MeY-84-2388 17:25 tem 282 622 8237 P.@8

[(b)(5)]

ce; ex.mail( Elizabeth.K. Stewart’, "Gene. Clapp", "maz...

00500000001760


DC 20006
ty, e518
4
Thomas C. Briggs Fax 200-828-3372
Wer Provident Cobbatar 202-256-2268
Government Affairs sow briqysienren cov

Geneva! Counsel

Ameri con Tw faigh Lest af

Facsimile (202) 508-3402
E-mail: cxj@babe.com
(Bick)
Charles RC Johnston, Je.

Attorney at Lene

“ . a Ame, NO
Bearman & CALDWELL ‘Wad regpen. DC, 1000+
APROFUESIONA, CORPORATION (202) 908-3400

00800000000001


{(b)(5)]

Regards,

Robin

Ajay Chhibber
02/15/2001 04:39 AM
Extn: 84219 ECC06

To: Robin Ruth Ritterhoff
cc: Kathleen B. Mccollom, Sally M. Zeijlon, Ayse Ronay

Subject: Re: Turkey issues (Document link: Robin Ruth Ritterhoff)
Robin,

many thanks.

{(b)(5)]

ajay

Robin Ruth Ritterhoff
02/15/2001 01:36 AM
Extn: 88049 EDSO1

To: Ajay Chhibber
cc: Kathleen B. Mccollom, Sally M. Zeijlon, Ayse Ronay
Subject: Turkey issues

Ajay-- for some mysterious reason, the first time I sent the message below,

2

00500000001832


ee LEZ) £6300 FAS CVE NOE ULID EMER VENI OEUN eee

www.ibsresearch.com Page 2 of 2

{(b)(5)]

../news_display.asp?upsale_id=253&archivew&iday=29&imonth=0 | &iyear=2001 §ion=I 1/29/2001
00500000001636


FES-Oi-2eai 1713 Ion

Enron
1735 ye Se, 0, oi 0
. % aaa
'
eancner SEES

Gren owe A Counsel . “
Gee Amevi con Taleish “Council

Facsclla (202) $08.02

00500000001949


Tee Smet 18:13 US TRERS INTL AFFAIRS 282 622 2535 P.a1

Fon oo
Wea COVER SHEET | .:
etre SP adie:

ZAIN DC 20006 copee

of? —_

02.826 3372 (fax) . TMKe oe ie
| a
TO: W: Iam S| were hy Gone Rage

FROM: Tom Beiggs eo

FAX #t: 202- BAB-253¢6_ Sad, aims

Gems nn
RE: _Tarkish Ene: py Sector china T
os ls
DATE: BF Sanuars . é
saan ioe ay
Number of pages including cover sheot: 3 we
Message: acai
eu ‘|a6

oon
eos

00500000001790


From: Millis, Marshall

Sent: Monday, May 21, 2001 12:30 PM
To: Clapp, Gene; Stewart, Elizabeth K.
Subject: FW: Turkey energy sector questions
Gene, Elizabeth,

Please see State's email below.

After discussing this with Robin, we propose sending the following email back to them. Please let
me know if you have any questions or suggested changes to the questions.

Thanks,
Marshall

om

((b)(5)]

00500000001940


Clapp, Gene

From: iemolGworkibenk, "5
Sent: Thursday, ay ebruary 15. 1 11:24 AM
‘0: radelet@do.treas.
Ce: fiver re eas gov, Marshal shal Nals@do treas gov. Maureen. Grewe@do.treas, gov;
Gene. Cla + .treas.gov
Subject: Turkey— notes from 1. Coen at wi ies
Importance: High

Repeating what I told Steve by phone. [(b)(5)]

{(6)(5))

00500000001932


Turkey — [(b)(5)]
Question: [(b)(5)]
Answer: [(b)(5)]

Drafted by Marshall Mills, OASIA/ISM, 622-9398, May 3, 2001

00500000002350


Tran, Luyen

Sent frevvda February oar te Soot 8:36 AM

To: Maureen,.Grewe@oo.treas, gov Mi Marshall. Mits@do.treas.gov,
Ce: Heater nga Wess sev: Ge Gene.Cl @dco.treas.,

Subject: Re: Turkey issues ae aan gov
Importance: High

[(b)(5)]

aseteeennnnnnnnns Forwarded by Robin Ruth Ritterhoff/Person/World Bank on
02/15/2001 08:34 AM --------------

Robin Ruth Ritterhoff
02/15/2001 08:34 AM
Extn: 88049 EDSO1

To: Ajay Chhibber
cc: Kathleen B. Mccollom, Sally M. Zeijlon, Ayse Ronay
Subject: Re: Turkey issues (Document link: Robin Ruth Ritterhoff)

{(b)(5)]

Regards,
Robin

Ajay Chhibber
02/15/2001 04:39 AM
Extn: 84219 ECCO6

To: Robin Ruth Ritterhoff
cc: Kathleen B, Mccollom, Sally M. Zeijlon, Ayse Ronay

Subject: Re: Turkey issues (Document link: Robin Ruth Ritterhoff)

Robin,

00500000001826


May 19, 2000
Turkey Economic Reform Loan
{(b)(5)]

U,S. Statement on the Turkey Economic Reform Loan
{(b)(5)]

00500000001700


From: ex.mail."Malachy.Nugent”

To: ex.mail(Robert. Conley”, "rritterhoM@workdbank.org...
Date: 5/4/00 3:56pm
Subject: Re: Turkey ERL ~ responses to USDOC questions -Reply -Reply -Reply

Date; 05/04/2000 03:52 pm (Thursday)

From Malachy Nugent

To: Dom13.DOPOB(BEASLEYM, CLAPPG, ColbyM, EPSTEINR, GREWEM,
HERRUNGS, KUHLOWM, LUNDSAGERM, StewartEK),
ex mail ‘ritterhof@workdbank.org”, “SakaueMJ@state.gov"),
CONLEYR

CC: ex.mail("Elizabeth.K. Stewart”, "Gene.Ciapp*,
“Jmazur@worldbank.org”, "Malachy.Nugent”, “Margaret. Kuhiow*,
"Mary Beasley’, “Maureen.Grewe", *Meg.Lundsager,
"Michael. Colby", "Robin.Epstein”, “Sheila. Herring”),

Subject Re: Turkey ERL -- responses to USDOC questions -Reply -Reply

“Reply -Reply

{(b)(5)}

Thanks. Malachy.
{(b)(5)]

Elizabeth: do you know what the issue is?
>>> Malachy Nugent 05/03/00 11:32am >>>

{(b)(5)]

Thanks. Malachy.
>>> ex mail."rritterhoffi@workdbank.org* 06/03/00 11:07am >>>

{(b)(5))

00500000001767


Stewart, Elizabeth K.

From: Mills, Marshall

Sent: Monday, April 30, 2001 12:40 PM

= sree Grewe, Maureen; Stewart, Elizabeth K; Tran, Luyen
Subject: RE: Turkey investment issues

{(b)(5)]

Please pass on a copy of the paper (cops, non-paper) when you receive it.

Thanks.
From: Ctristopulos, Greg
‘Sent: Monday, Apeil 30, 2001 8:46 AM
To: Mills, Marshall; Grewe, Maureen; Stewart, Bizabeth K.; Tran, Luyen
Cc: Sampliner, Gary
Subject: RE: Turkey investment issues
{(b)(5)}
~--=-Original Message--—

From: Mills, Marshall

Sent: Friday, Apeil 27, 2001 7:06 PM

To: Christopulos, Greg; Grewe, Maureen; Stewart, Elizabetn K.; Tran, Luyen
Subject: FW: Turkey investment issues

Attached are some more suggested changes to a State paper, that | sent directly to Larson's staff at its request.

[(b)(5)]
Sorry there was not enough time to coordinate these comments (this came to our attention very late in the day).

——Original Message

From:  Mils, Marsha

Sent: Friday, Apr® 27, 2001 6208 PM
To: —_Jenathan Kessier (E-mail)
Subject: Turkey investment

See suggested changes attached.
Tl also fax it over.

<< File: Dervis investment issues21-mm.doc >>

00500000001552


JAN-23-2801 18:28 ten ede Gee bese r.cves

His Excellency Bulent Ecevit
June 13, 2000
Page 2

The ramifications of such a policy, if it becomes effective immediately, would be
disastrous for Turkey. Out of over 20 BOT and TOR energy projects currently under
development, no more than one or two have signed a guarantee agreement. However, the vast
majority of the companies developing these projects, our own included, were led to believe that
the BOT and TOR projects would be eligible for such guarantees. The lack of a guarantee would
require a substantial recalculation of financial models upon which responsible and established
companies rely when determining the financeability and economic viability of a given project, In
the context of BOT and TOR energy projects, which must be financed on the basis of the value
of the project revenue and its assets (*project" financing), the lack of a government guarantee for
‘one or more of the transactions that make up the project will render the project ineligible for
financing from most westem financial sources. This condition is not unique to Turkey. It is a
traditional consideration in the qualification and quantification of risk that all established western
financial institutions assess before agreeing to support a project in an emerging market. Thus, in
the absence of full implementation of energy sector reforms, commercial financing will not be
available without a Treasury guarantee,

The problem created by the proposed restraints on guarantees is the same fundamental
problem we had hoped would be put to rest by the adoption of international arbitration for
concession and privatization contracts in Turkey. There, we worked together to remove legal
impediments to the availability of financing for Turkish energy projects. The irony is that only
after the ink dried on the enactment of the constitutional amendments and Law Number 450] did
this new initiative to withhold Treasury guarantees surface under the mandate of the World Bank
Economic Reform Loan, Now, the restricted guarantee policy, if implemented without a rational
transition process, will make the international arbitration achievement a Pyrthic victory. The
international investors will be forced to withdraw for lack of financing and the critical promotion
of investment and private sector participation in the Turkish energy sector will be stillborn.
Energy shortages will be more than predicted. Millions of dollars of project development costs
will be jeopardized and litigation by companies led to believe that guarantees would be available
could embroil the Government and possibly the Bank in an embarrassing round of confrontations
in the courts.

All of our companies endorse and support Turkish Government efforts to achieve
budgetary reforms. We agree with the need for the Government to stabilize the public debt as a
share of GNP, And our companies agree that guarantees should be phased out once the reform
and demonopolization program for the energy sector is fully implemented. We do take issue,
however, with the lack of a reasonable transition during the reform period. That transition
should take into account the realities of financing the projects that must bridge the gap between

WH a vt
‘MASTA-ONE 01292901

00500000001621


Stewart, Elizabeth K.

Sent: Wedhestay Fi bi 14, 2001 6:13 PM

: , Febru: 5 3

To: ‘ritterhoff@woridbank.org’. Grewe, Maureen; Mis, Marshall
Ce: Tran, Luyen; Stewart, Elizabeth K.

Subject: RE: draft e-mail

My suggestions are indicated below in CAPS.

Language in CAPS and in [ ]) with 7? are just sugegstions of tone.

Ajay--

{(b(5)]

Regards,
Robin

00500000001574


Stewart, Elizabeth K.

—___—— rr
Som Monday Feta i 2001 6:27 PM

To: ” Stewart, Eliz:

Subject: RE: Turkey ese

no attachments.

one Original Message----~-

From: Stewart, Elizabeth K.

Sent: Monday, February 12, 2001 6:09 PM

To: 'eritterhof faworldbank. org'; Stewart, Elizabeth K.; Mills, Marshall
Cc: Tran, Luyen; Coffman, Phyllis

Subject: RE: Turkey Letter

Phyllis - please P print this (and the attachment) for Bill. Please put in a folder for
Bill's reading this evening. Thank you.

cates Original Message---~~

From: rritterhof feworidbank. org (mailto: rritterhoffeworldbank.org]
Sent: Monday, February 12, 2001 3:43 PM

To: Elizabeth.K.Stewartedo.treas.gov; Marshall.Mills@do.treas.gov
Ce: Luyen.Tran@do.treas.gov

Subject: Turkey Letter

The revision including Marshall's changes is attached. Could you run it by Bill
(if there ig time tonight-- otherwise I guess run it by Brian as acting) so Todd
can sign off?

Thanks-- Robin

(See attached file: Turkey Electric Power Law Response.doc)

00500000001517


{(b)(5))

‘We left further discussion of proposed actions for the 2 pm meeting between Steve Radelet and Janice Bay of

Please call me if you have further questions.

-—-Original Message—-
From: ‘Stedman, Louellen
Sent: Friday, February 09, 2001 10:24 AM
To: Mits, Marshal; Capp, Gene; Stewart, Ekzabeth K.
Ce: Grewe, Maureen; McDonald, Larry
Subject: RE; URGENT: Dial-in Instructions for Conference Call on Turkry Energy Issues and IFIs at 10:30
Importance: High
{(b)(5)]
Original Message---
From: Mils, Marshall
Sent: Friday, February 09, 2001 10:20 AM
To: ‘Stedman, Louellen; Capp, Gene; Stewart, Elizabeth K.
cc: Grewe, Maureen; McDonald, Larry

Subject: URGENT: Diahin Instructions for Conference Call on Turkey Energy Issues and IFis at 10:30
Importance: High

Call 647-0817, code 7890,

{(6)(5)]

The conference callis at the staff level, prior to & DAS level meeting his afternoon at 2 pm am covering

Marshall
——Onginal Message-~---
From: ‘Stedman, Loueilen
Sent: Friday, February 09, 2002 10:11 AM
To: Mills, Marshal; Capp, Gene; Stewart, Elizabeth K.
Ce: Grewe, Maureen; McDonald, Larry
Subject: RE: URGENT: Conference Call on Turkey Energy Issues and IFIs at 10:15-10:30
Importance: Hgh
[(b)(5)}

00500000001594


From: Mills, Marshall
Sent: Monday, April 30, 2001 12:40 PM
To: Christopulos, Greg; Grewe, Maureen; Stewart, Elizabeth K.; Tran, Luyen
Ce: Sarpiner, Gary
RE investment issues
{(©)(5)]

Please pass on a copy of the paper (oops, non-paper) when you receive it.

‘Thanks.
~-~-Original Message-——-
From: Christopulos, Greg
Sent: Monday, Apel 30, 2001 8:48 AM
To: Mils, Marshall; Grewe, Maureen; Stewert, Elizabeth K.; Tran, Luyen
cc: ‘Sampliner, Gary
‘Subject: RE: Turkey investment issues
{(o)(5)]
Original Message—~-

From: Mills, Marshal

Sent: Friday, April 27, 2001 7:06 PM

To: Qiristopulos, Greg; Grewe, Maureen; Stewart, Blzabeth K; Tran, Luyen
‘Subject: Fw: Turkey investment saves

Attached are some more suggested changes to a State paper, that | sent directly to Larson's staff at its request.

{(b)(5)]
Sorry there was not enough time to coordinate these comments (this came to our attention very late in the day).

-——Original Message-—--

From: — Mills, Marshall

Sent: — Friday, April 27, 2001 6:08 PM
To: Jonathan Kessier (E-mail)
Subject: Turkey investment

See suggested changes attached.

Ml also fax it over.
<< File: Dervis investment issues21-mm.doc >>

00500000001498


Stewart, Elizabeth K.

From: ritterhofi@worldbank.

Sent: Wednesd: "February 12, 2001 6:34 PM

te Luyen.T Oonhos reas eo jo trees ge
c: uyen, Tran S.gOV; J .treas.gov

Subject: draft e-mail sow 7

Importance: High

per steve's request, here's a draft- sorry for delay, a little bosnia vote
contretemps intervened.

Ajay--

((b)(5)]

Regards,
Robin

00500000001575


Stewart, Elizabeth K.

Sent leinesday, Fabra 14, 2001 3:08 PM

To: Fan. Luyen, Grewe, one, Maureen Ciapp, Gene; Stewart, Elizabeth K.; McDonald, Larry; ‘Robin
(E-mail)

Ce: pal Brukoff (E-maily’

Subject: FYI: Embassy action request on Turkey Electricity Law and IFI conditionality

{(b)(5))

--—Original Message--—-

From: Tran, Luyen

‘Sent: Naren, Nove 14, a

To: Marshat; Grewe, Maureen; Clapp, Gene; Stewart, Elirabeth K.; McDonald, Larry; ‘Robin Ritterhoff (E-maiy'
cca "Patti Beukot? (E-mail

‘Subject: RE: FYI: Embassy ection request on Turkey Electricty Law and IFI conditionality

3H

[(b)(5)]

-—~-Original Message--—--

From: Mills, Marshal

Sent: Wednesday, February 14, 2001 2:48 PM

To: Grewe, Maureen; Capo, Gene; Stewart, Elizabeth K.; Tran, Luyen; McDonald, Lary; Robin Ritterhoff (E-mail)
Ce: Patti Brukoff (E-mail)

‘Subject: FYI; Embassy action request on Turkey Bectridty Law and IFI condtionalty

Importance: High

{(b)(5)]

00500000001581


((b)(5)]

Regards,
Robin

00500000001828


{(b)(5)]

Luyen.Tran@do.treas.gov on 01/26/2001 08:43:23 AM

To: RritterhoffeWorldbank.Org
cc:

Subject: FW: Turkish Energy Sector Meeting

worn ‘Original Message~----

From: Grewe, Maureen

Sent: Friday, January 26, 2001 $:41 AM

To: Tran, Luyen; Stedman, Louellen; Mills, Marshall
Ce: Clapp, Gene; Radelet, Steve

Subject: RE: Turkish Energy Sector Meeting

FYI, there is also a letter from the American-Turkish Council to Todd
Crawford at the World Bank, and I'm pretty sure they've been in touch with
the ED's office at the Fund as well.

Robin Ritterhoff is drafting a response from Todd. We should be sure to
be consistent.

Marshall -- did you get a fax from Phyllis?

VVVV VV VV Ve

From: Tran, Luyen

Sent: Friday, January 26, 2001 8:28 AM

To: Stedman, Louellen; Grewe, Maureen; Mills, Marshall
Subject: FW: Turkish Energy Sector Meeting

vv

fyi, you should've gotten a fax from phyllis on enron's letter to bill.
{(b)(5)]
>

> maureen & marshall -- probably would make sense to have one of you there.
please call gene to see what has transpired on this, thanks.

asses Original Message-----

Prom: Coffman, Phyllis

Sent: Thursday, January 25, 2001 6:09 PM

To: Clapp, Gene; Stewart, Elizabeth K.; Tran, Luyen
Subject: Turkish Energy Sector Meeting

2

vvvvwv

00500000001494


JAN-29-2001 16:29 1cm 202 622 e257 P.22786

His Excellency Bulent Ecevit
June 13, 2000

Page |

June 13, 2000

VIA COURIER AND FACSIMILE

His Excellency Bulent Ecevit
Prime Minister

The Republic of Turkey
Ankara, Turkey

Dear Prime Minister Ecevit:

This letter is submitted on behalf of the American companies listed below, many of
which have invested millions of dollars in the development of projects essential to meet Turkey's
energy requirements. The purpose of this letter is to request that a reasonable transition be
implemented by which the Turkish Undersecretanat of the Treasury makes financial guarantees
available for eligible energy-related projects. Recent communications from the Turkish
Government and World Bank indicate that such guarantees now may be withheld even though
several energy projects, after years of preparation and negotiations, are in advanced stages of
development.

Ina March 10, 2000 letter to the World Bank, Minister of State for the Economy, Mr.
Recep Onal, observed that reforms and the consequent introduction of competition in the Turkish
energy sector “takes time and the transition period must be properly managed.” Of course, in any
shift from state controls to market driven policies, transition is an important topic, worthy of
close attention. Unfortunately, it seems that proper management of the transition in the energy
sector may have fallen prey to a formulistic effort by the Bank to eradicate immediately
Treasury's contingent liabilities. The Government appears to have accepted this precipitous
approach, As a result of a Bank-sponsored “Public Expenditure and Institutional Review,”
several reforms are expected to be incorporated in the 2001 Government budget. Minister Onal
reported in his letter that, among other things, “Jimits on the issuance of new guarantees” would
be part of the immediate budgetary reform package. After several consultations by
representatives of our companies with officials at Treasury, the Ministry of Energy and Natural
Resources and the Bank, it appears that for energy projects being developed under the Build-
Operate-Transfer (BOT) or Transfer of Operating Rights (TOR) models, the Government may
decide to withhold Treasury guarantees for such projects unless @ project-specific agreement is
in place that provides for such guarantee.

w ek laasabel
76538-967 CLDSDONE

00500000001620


Stewart, Elizabeth K.

LT

Sent: Thursday, Pebru 15, 2001 11:53 AM
7 ul , , E
To: Stewa' elizabeth K.
‘Subject: RE: aurkey energy - your question
thanks!

-——-Onigina! Message———-

From: ‘Stewart, Blzabeth K

Sent: ‘Thursday, February 15, 2001 11:46 AM

Tor Mills, Marshall

Subject: RE: Turkey energy - your question
{(b)(5)]

-——Original Message-—-

From: Mills, Marsha

Sent: Thursday, February 15, 2002 11:34 AM
To: ‘Stewart, Elizabeth K.

‘Subject: RE: Turkey energy - your question

{(b)(5)]

— Message---
From: Stewert, Bizabeth K.

‘Sent: ‘Thursday, February 15, 2001 11:16 AM
To: Radelet, Steve

(Ce: Mils, Marshall; Grewe, Maureen; Capp, Gene; Tran, Luyen
Subject: Turkey energy ~ your question

Steve,
From my notes of the 1-29-01 conference call with Jim Parks — [(b)(5)]

00500000001579


Regards, Robin

ce: ex.maii( Elizabeth, K, Stewart”, “Gene_Clapp*, “Jaz...

00500000001778


FEB-O1-2201 17314 a ae

His Excellency Bulent Ecevit
June 13, 2000
Page 2

The ramifications of such a policy, if it becomes effective iramediately, would be
disastrous for Turkey. Out of over 20 BOT and TOR energy projects currently under
development, no more than one or two have signed e guarantee agreement. However, the vast
majority of the companies developing these projects, our own inchded, were led to believe that
the BOT and TOR projects would be eligible for such guarantees. The lack of a guarantee would
require a substantial recalculation of financial models upon which responsible and established
companies rely when determining the financeability and economic viability of « given project. In
the context of BOT and TOR energy projects, which must be financed on the basis of the value
of the project revenue and its assets (“project” financing), the lack of a government guarantee for
one or more of the transactions that make up the project will render the project ineligible for
financing from most western financial sources. This condition is not unique to Turkey. It is a
traditional consideration in the qualification and quantification of risk that all established western
financial institutions assess before agreeing to support a project in an emerging market. Thus, in
the absence of full implementation of energy sector reforms, commercial financing will not be
available without a Treasury guarantee.

The problem created by the proposed restraints on guarantees is the same fundamental
problem we had hoped would be put to rest by the adoption of international arbitration for
concession and privatization contracts in Turkey. There, we worked together to remove legal
impediments to the availability of financing for Turkish energy projects. The irony is that only
after the ink dried on the enactment of the constitutional amendments and Law Number 4501 did
this new initiative to withhold Treasury guarantees surface under the mandate of the World Bank
Economic Reform Loan. Now, the restricted guarantee policy, if implemented without a rational
transition process, will make the international arbitration achievement a Pyrrhic victory. The
international investors will be forced to withdraw for lack of financing and the critical promotion
of investment and private sector participation in the Turkish energy sector will be stillborn.
Energy shortages will be more than predicted. Millions of dollars of project development costs
will be jeopardized and litigation by companies led to believe that guarantees would be available
could embroil the Government and possibly the Bank in an embarrassing round of confrontations
in the courts.

All of our companies endorse and support Turkish Government efforts to achieve
reforms. We agree with the need for the Government to stabilize the public debt as a
share of GNP. ‘And our companies agree that guarantees should be phased out once the reform
and demonopolization program for the energy sector is fully implemented. ‘We do take issue,
however, with the lack of a reasonable transition during the reform period, That transition
should take into account the realities of financing the projects that must bridge the gep between

WR) 133241 +1
‘MES3E-401 91/29°2001

00500000001614


Turkey Electric Power Law Response

Dear Mr. Briggs:

{(b)(5)}

Sincerely,

Todd Crawford

00500000001592


To: Robin Ruth Ritterhotf

ce: Ajay Chhibber, Sally M. Zeijlon, James Sayle Moose, Kathleen B.
Mocoiliomn

Subject: Turkey ERL

Robin,

((b)(5)]

00500000001770


From: Malachy Nugent

To: Dom13.00P08(BEASLEYM, CLAPPG, ColbyM, EPSTEINR, GR...
Date: 5/300 11:32am

Subject: Re: Turkey ERL — responses to USDOC questions -Reply -Reply
{(b)(5)]

Thanks. Malachy.

>>> ex.mail,"rritterhofi@wordbank.org” 08103100 11:07am >>>

{(b)(5)]

Malachy Nugent@pdo.treas gow on 05/02/2000 10:14:17 AM

Robin.Epstein@Do.Treas.Gov, Maureen.Grewe@Do, Treas.Gov,
Sheila. Herting@0o.Treas.Gov, Margaret, Kuhlow@)00. Treas. Gov,
Mog.Lundsagen@@Do. Treas.Gov, Elizabeth. K.Stewart(@Do.Treas.Gov,
Gene.Clapp@Do. Treas.Gov, Malachy. Nugent@Do,Treas.Gov,
Margaret Kuhlow@Do. Treas.Gov, Robin Ruth Ritternoff

ce: Elizabeth. Stewart@Do.Treas.Gov, Janice |. Mazur Eds,
Mary.Beasley@Do.Treas.Gov, Maureen.Grewe@Do, Treas. Gov,
Meg.Lundsager@Do. Treas.Gov, Robin.Epstein@Do. Treas.Gov,

‘Sheila.Herling@Do,Treas.Gov

‘Subject: Turkey ERL -- responses to USDOC questions -Reply

Date: 06/03/2000 10:09 am (Wednesday)
From: Malachy Nugent

To: Domt3.D0POR({BEASLEYM, CLAPPG, EPSTEINR, GREWEM, HERRLINGS,

KUHLOWM, LUNDSAGERM, StewartEK),
ox,mail('rritlerhoff@worldbank.org", "Gene.Clapp”,
“Malachy, Nugent’, "Margaret. Kuhlow”)

CC: ex.mail(Elizabeth.K. Stewart”, "Jmazur@workdbank.org”,

00500000001773


{(b)(5)]

N/R

00500000001554


Sent: Monday, Pri 2001 4:35 PM
To: Clapp,Gene :

Ce: Stewart, Elizabeth K.

Subject: RE: Turkey energy sector questions

Thanks, we'll keep you posted.

Original Message---—
From: Clapp, Gene
Sent: Monday, May 21, 2001 3:41 PM
To: ‘Mills, Marshall
cc: ‘Stewart, Bizabeth K.
Subject: RE: Turkey energy sector questions
I think this is fine. [(b)(5)]
—Original Message~~~
From: Mills, Marshall
Sent: Monday, May 21, 2001 12:30 PM
To: Gapp, Gene; Stewart, Elizabeth K.
Subject: iv: Turkey energy sector questions
Gene, Elizabeth,
Please see State's email below.

After ing this with Robin, we propose sending the following email back to them. Please let me know It you
have any q $ or suggested changes to the questions.

Thanks,
Marshall

-~

{()(5)]

00500000001548


Stewart, Elizabeth K.

From: Marshall

Sent: Thu , February 15, 2001 11:32 AM

oe: Tran Luyen; Clapp, Gand: boat rut (ear) nak ne «
Subject: RE: Turkey issues and Bank

Thanks very mich for pursuing this, Robin.

{(b)(5)]

Marshall

seer Original Message-----

From: rritterhoffeworldbank.org [mailto:rritterhoff@worldbank. org]
Sent: Thursday, February 15, 2001 8:36 AM

To: Maureen.Greweado.treas.gov; Marshall .Mills@do.treas.gov;
Blizabeth.K.Stewartedo.t: «gov

Cc: Luyen.Tran@do.treas.gov; Gene.Clappédo.treas.gov

Subject: Re: Turkey issues

Importance: High

my answer to Ajay's clarification. [(b)(5)]

Forwarded Robin Ruth Ritterhoff/Person/Werld Bank on

02/15/2001 06:34 AM

Robin Ruth Ritterhoff
02/15/2001 08:34 AM
Extn: 688049 EDSso1

To: Ajay Chhibber

co: Kathleen B. Mccollom, Sally M. Zeijlon, Ayse Ronay

Subject: Re: Turkey issues (Document link: Robin Ruth Ritterhoff)
Ajay, thanks very much for the clarification-- very helpful. [(b)(5)]

Regards,
Robin

Ajay Chhibber
02/15/2001 04:39 AM
Extn: 64219 Eccos

To: Robin Ruth Ritterhoff
cc: Kathleen B. Mccollom, Sally M. Zeijlon, Ayse Ronay

00500000001507


Turkey Energy Law Response

Dear Mr. Briggs:

{(b)(5)]

Sincerely,

00500000001909


{()(5)]

age

Prom: rritterhoff@worldbank.org [mailto:rritterhoffeworldbank.org])
Sent: Friday, January 26, 2001 10:20 AM

To: Luyen.Trangdo.treas.gov

Ce: Gene.Clappado.treas.gov; PBRUKOFFeimf.org;
Marshall.Mills@do.treas.gov; Maureen.Grewe@do,treas.gov;
Louellen,Stedmangdo.treas.gov; tcrawfordgworldbank.org

Subject: Re: FW: Turkish Energy Sector Meeting

Luyen-- As I told Gene, I would be happy to join Bill's 3PM internal meeting

to
tell what I know on the Bank side-- I have talked a lot with Bank staff on
this.

{(b)(5)]

Luyen. Tran@do.treas.gov om 01/26/2001 08:43:23 AM

To: RritterhoffeWorldbank.org
cc:

Subject: FW: Turkish Energy Sector Meeting

fyi.

> Original Message----~

> Grewe, Maureen

> Priday, January 26, 2001 8:41 AM

> Tran, Luyen; Stedman, Louellen; Mills, Marshall
> 2 Clapp, Gene; Radelet, Steve

> Subject: RE: Turkish Energy Sector Meeting

>

{((b)(5)]

Marshall -- did you get a fax from Phyllis?

etait ‘Original Message-----

From: Tran, Luyen

Sent: Friday, January 26, 2001 9:28 AM

To: Stedman, Louellen; Grewe, Maureen; Mills, Marshall
Subject: FW: Turkish Energy Sector Meeting

vuvvv¥VY

2

00500000001537


Mr. Ali Iz
GE Power Systems

Mr. Ghazanfer Khan
The AES Corporation
Dear Sirs:

Thank you for your letter dated June 11, 2001 regarding
U.S. power projects in Turkey.

{()(5)]

00500000001953


beth K_ — —

Stewart, Eliza

From:
Sent:
To:

Ce:
Subject:

{(b)(5)]

{(b)(5)]

Rao, Geet!

ha
Tuesday, January 23, 2001 1:24 PM
reen; Mills, Marshall; Christopulos, Greg; Clapp, Gene; Stewart,

Sampliner, Gary; Grewe, Mau
Elizal K.

Radelet, Steve
RE: India/Dabhol Meeting

00500000001543


From: Gene
Gent: c , May 21, 2001 3:41 PM
0:
Ce: Stewart, Elizabeth K.
Subject: RE: Turkey energy sector questions
{(©)(5)]
non Mesmage--~
Mills, Marshalt
Sent Monday, May 21, 2001 12-30 PM
Tor Clapp, Gene; Stewart, Elzabeth K.
‘Subject: FW: Turkey energy sector questions
Gene, Elizabeth,
Please see State's email below.
After discussing this with Robin, we propose sending the following email back to them, Please let me know if you have

‘any questions or suggested chenges to the questions.
Thanks,
Marshall

wee

Suggested email beck to State

((b)(5)}

00500000001938


{(0)(5)]

Regards,
Robin

00500000001578


From: Sheila Herring

To: stewartek, clappg
Date: 511700 2:12pm
Subject: Turkey ERL ~ $759 million

{(b)(5)]

00500000001706


set of social and public sector reforms, they said.

N/R

{(b)(5)]

00500000001699


To: Ajay Chhibber
co: Kathleen B. Mccollom, Sally M. Zeijlon, Ayse Ronay

Subject: Turkey issucs

Ajay-- for some mysterious reason, the first time I sent the message below,
Lotus Notes decided not to send it to you, despite my having addressed it to
you. Here it is again.

Regards,
Robin

- Far Forwarded by Robin Ruth Ritterhoff/Person/World Bank on
0.

Robin Ruth Ritterhoft
02/14/2001 06:34 PM
Extn: 88049 EDso1

Tor

cc: Kathleen B. Mccollom, Sally M, Zeijlon, Ayse Ronay

Subject: Turkey issues

Ajay--

Thanks very much for your recent e-mail indicating that you would be willing to
meet with Treas! Deputy Assistant Secretary Steve Radelet and Maureen Grewe,
Director of the Middle East and South Asia Office. I wanted to let you know
that their trip to Ankara, originally scheduled for this week, has been

postponed (probably until the last week of February); when it is rescheduled the
U.S. Embassy will be in touch with you to set up a time.

{(b)(5)]

Regards,
Robin

00500000001502


MER 22 209i 10:15 FR ENRON TO 6220037 P.GarOd

ED IND Receivables

Unpaid $3 0.4MM

Delay Interest $2.2MM
Total $2.6MM

Our understanding from the General Manager is that TEAS will try to pay the remainder of
the November payable either today or Friday the 23. However, the manager qualified that
commitment by stating “if they (TEAS) are able to purchase US dollars..". I would not
like to place too much reliance on their statement of intent, Especially as the FX exposure is
now huge.

Thope that you find this information useful. If you have any questions, please contact me.

fo tft

+e TOTAL PAGE.G4 we
00800000000013


[()(5)]

00500000001701


Fron anah bce Stephen P [maito: NewhouseSP@state-gov]
Sent: Friday, May 18,2001 oy aa Pa

Subject. Turkey questions 7

((b)(5)]

Oe ct Deveiopmest Finance

(258) art

00500000001547


Stewart, Elizabeth K.

Sent: Fndey, Segust 31 2001 11:09 AM
7 , August 31, 4

To: Stewart, Ehzabeth K

Subject: turkey energy

((b)(5)]

00500000001487


MAY-@4-2082 27:85 1 282 622 Ba37 P.e?

{(b)(5)]

 aorreeeseemenens Forwarded Mw. nPerson/World Bank
caara000 0328 An “" “

Robin Ruth Ritterhoff
04/28/2000 08:01 PM
Ext: 58049 E0S01

To: Sally M. Zeijion

cc: Kathleen B. Mccallom, Jarnes Parks
Subject: Turkey ERL

Sally --

{(b)(5)]

00500000001759


— — ————__—_——
From: Grewe, Maureen

Sent: Friday, January 26, 2001 8:41 AM

To: Tran, Luyen; man, Louellen; Mills, Marshall

Ce: Clapp, Gene; Radelet, Steve

Subject: RE: Turkish Energy Sector Meeting

FYI, there is also a letter from the American-Turkish Council to Tadd Crawford at the World Bank, and [(b)(5)]

Robin Ritterhoff is drafting a response from Todd. [(b)(5)]
Marshall -- did you get a fax from Phyllis?

~-~-Original Message-—
From: Tran, Luyen
‘Sent: Friday, January 26, 2001 8:28 AM
To: ‘Stedman, Loueilen; Grewe, Maureen; Mills, Marshall

Subject: FW: Turkish Enargy Sector Meeting
fyi, you should've gotten a fax from phyllis on enron’s letter to bill. don’t know if this meeting was
called a little early or not; check with gene clapp to see what our response will be.

maureen & marshall -- probably would make sense to have one of you there. please call gene to
see what has transpired on this. thanks,

Original Message--——
From: Coffman, Prryilis
Sent: Thursday, January 25, 2001 6:09 PM
To: Clapp, Gene; Stewart, Elizabeth K.; Tran, Luyen

Subject: Turks Energy Sector Meeting
Friday, January 26 at 3:00 pm in Bill's office.

00500000001797


Tran, Luyen

From: Mills, Marshall
Sent: Weds , February 14, 2001 5:26 PM
To: Mills, Marshall; Grewe, Maureen; Clapp, Gene; Stewart, Elizabeth K.; Tran, Luyen; McDonald,
Larry; Robin Ritterhoff (E-mail)', Radelet, Steve; Stedrnan, Louellen
Ce: “Patt Brukoff (E-mail)
Subject: FYb IMF conditionality and Embassy action request on Turkey Electricity Law
importance: High
{(b)(5))
Marshall
-——-Original Message-=--
From: Mills, Marshall
Sent: Wednesday, February 14, 2001 2:48 PM
To: Grewe, Maureen; Capp, Gene; Stewart, Elizabeth K.; Tran, Luyen; McDonald, Larry; Robin Ritterhoft (E-mail)
Ce Path Brukot? (E-mail)
Subject: FYT: Emiassy action request on Turkey Blectricty Law and [FI canditionality
Importance: High
{(0)(5)]

00500000001822


"Mary. Beasley’, "Maureen. Grewe", "Meg Lundsager’,

"Robin Epstein”, "Shella. Herrling’).
Subject: Turkey ERL ~ responses to USDOC questions -Reply
{(b)(5))]

Thanks. Malachy.
Malachy,

((b)(5)]

We continue to nope for US Treasury assistance in arranging a meeting
to discuss some of these issues in more detail,

Thanks,
Michael 8.
>>> ex.mail. “rritterhotf@workdbank.org” 05/02/00 04:57pm >>>

{(b)(5)}

00500000001745


Stewart, Elizabeth K.

Sone Mnurstey, February 16, pont 9:28 9:29 AM
- Thur
To: Radelet, Steve: Grewe, Maureen Gene; Stewart, Elizabeth K.
Ce: Patti Brukoff (E-mail Robin Faiterhoft E-mail il)
Subject: FW: Turkey: TOOR: Floadline extorded to June 30, Feb 15, 2001
Importance: High
bere tet
from: Fram Bander Se Secures [mailt: mailto: BenderSecurities@BenderSecunitties.com]

rey Kemruane 15, 2001 4:51 AM
fort Tnarehell .treas.gov'
Subject: Turkey: TOORS: deadline extended to June 30, Feb 15, 2001
Importance: High

{(b)(5)]

00500000001570


Stewart, Elizabeth K.

Sent: T ee 13, S01 12:07 PM

To: gov
Cc: Elizabeth. reas, gov; Sara _paulson@do.treas.gov
Subject: Turkey letter [(b)(5)

Phyllis--

1. Did you get a chance per Elizabeth's e-mail to put that draft letter in
front of Bill last night? Any reaction from him?

[(bX5)]

00500000001516


Ecevit said he has secured President Ahmet Necdet Sezer's verbal consent to
; through a phone call and said a cabinet decree on Dervis’
tment will be sent to the president when the necessary signatures are

-By Selim Atalay, Dow Jones Newswires; 490212 2313355,
selim. (@dowjones.com

(END) Dow Jones Newswires 02-03-01

1624GMT

(AP-DJ-03-02-01 1624GMT)
“SUBJECT: Di7 DIS DI1 DI6 Di4 DI2 IMF IBRD TURK POL ASIA EURO HOT

Co c) 2001 Dow Jones and Cor , Inc.
Roebnad ( NewsEOGEILAN: B20" 11 AM

00500000001564


G22 GOs7 P.01
MAY-16-2808 10:38 cm ane

US Department of the Treasury

Office of Middle East and South Asian Nations
phone (202) 622-2140, fax (202) 622-0037

: Ld. FAX
in Ri off From Malachy Nugent
250Ss~ Date 05/15/00
Page | of 13

Robin -- Attached is a draft cable from Commerce reporting on the mecting with Bank staff on
Thursday, Let me know if you have any problems with it.

Thanks. Malachy.

00500000001710


Stewart, Elizabeth K.

From: Clapp, Gene
Sent: Friday, January 26, 2001 4:51 PM
To: Stewart, Elizabeth K.; Mills, Marshatt ‘rritterhoff@worldbank.org"
Cc: Grewe, Maureen; Walsh, Helen; Tran, Luyen; Coffman, Phyllis
Subject: FW: Meeting with Bill
FT: “Aner the Turkey meeting, | spoke with Gil about tiendence Ot ie Ean menace tt . he agreed that we
should keep the number of attendees down, | suggested Elizabeth, Marshall or Maureen, and in. he said that
$0u! ine.
Original Message--~-~
From: Coffman, Phylis
Sent: Tuesday, January 23, 2001 6:22 PM
To: ‘Clapp, Gene
Subject: Mesting with Bat
Re Enron Turkish Energy Sector

Will you be ready to meet with Bill on Friday, 1/26 to discuss the memo that was faxed to you this afternoon by Yvonne. If
not please call her.

How about Friday at 3:00 pm in Bill's office.
Also | have tentatively scheduled a meeting with Bill and Tom Briggs on same topic for Monday 1/29 at 4:00 pm in Bill's

00500000001557


{(b)(5)]

Regards,
Robin

00500000001509


Stewart, Elizabeth K.

From: McDonald, Larry
Sent: Friday, igh 2001 ge PM
To: Marshall; Clapp, Gene: eng: Stewart, Elzabeth K; Tran, Luyen
Ce: eon eet tocar "Rovin Rito ‘(E-mail)’; "Path Brukoff (E-mail)'
Subject: Level Conference Call on Turkey Energy Issues and IFis
It's 2:05. | presume the conference call did nat occur.
——Original Message-——-
From: ‘Stednan, Lovellen
Sent: Friday, February 09, 2001 1:08 PM
To: Mills, Marshall; Capp, Gene; Stewart, Bizabeth K.; Tran, Luyen
Cc: Grewe, Maureen; McDonald, Larry; ‘Robin Ritterholf (E-mail); ‘Patt) Bruleoft nol (Emat

‘Subject: RE: Readout of Today's Staff Level Conference Call on Turkey Energy Issues
Larry will await your call. (2-0112)

Original Message———

[(6)(5)]

Original Message-~--

From: ‘Stedman, Lovellen

Sent: Friday, February 09, 2001 1:00 PM

Te: Mills, Marshall; Clapp, Gene; Stewart, Elizabeth K.; Tran, Luyen

Cc: Grewe, Maureen; McDonald, Larry; ‘Robin Ritterhoff (E-mail; ‘Patti Brukoff (E-mail)’

Subject: RE: Readout of Today's Staff Level Conference Call on Turkey Energy Issues ard IFEs
[(b)(5)}
Thanks.
-we-Oniginal Message——
From: Mis, Marshall
‘Sent: Friday, February 09, 2001 12:44 PM
To: Stedman, Louelien; Gapp, Gene; Stewart, Elizabeth K.; Tran, Luyen
ca Grewe, Maureen; McDonald, Lary, Robin Riteshoff (E-mail); Pats Brukof (E-me): Mills, Marshall
Subject: seis of Todk/s Stat Level Coerence Cal on Turkey Energy Ives and IFis

Importance: High

I represented Treasury in this discussion of what to do, if anything, on this issue.

{(b)(5)}

00500000001527


FINANCIAL TIMES WEDNESDAY APRIL § 2000

1 gaps hin

jris and the

sies which surround it
the government is being
asked to provide export

credit guarantees of some
$220 to the chief canstrac

thom contractor, Balfour
Beatty
Objectors claim the

scheme will farce the reset-
tlement of at beast 15,000
mainly Kurdish people, Dood
the historic town of Hasan
kceyf, as well a8 scores of
emailer villages, and cause
water shortages and possible
pollution downstream in
Syria and traq.

Its defenders maintain
that it will bring prosperity
and economic development
to the region, where Kurdish
militants belonging to the
Kurdistan Workers’ Party
(PKK) bave been fighting the
Turkish military 15 years.
‘They also insist thet what is
primarily # bydro-electric
scheme will not, by defini

thon, cause any water short
ages downstream.

Although the Tisu project
is entirety hydro-electric, the
assoctated Clare dam on the
Tigris is intended for irriga-
tion as well, for some 120,000
hectares. Indeed, while some
© per cent of the hydro-

power to be produced by the
whole GAP project from
both rivers is already avail-
able, only Li per cent of the
irrigation schemes have
been completed. A further 19
per cent is under constrac-
tion, according to Dr Olcay
Unver, president of the GAP
adminkstration.

Use of water from the two
rivers for massive irrigation
schemes is perbaps the most
controversial aspect for
many environmentalists.
Excessive salination, and
eck of evacuation channels
for water used in surface
irrigation, are two looming
problems. But whether the
irrigation plans would hit
supplies to Syria and Iraq is
sul 4 moot point.

A 1967 protocol between
Turkey and Syria guaran-
teed a minimam flow of 900
cumecs (cubic metres per
second) in the Buphrates at
the border. So far, the Turks
imsist they have more than
kept their side of the bar-
fain, providing an average
of around TM cumecs. If
water Clow ever sinks below
$00 cumecs in the dry soa
son, any shortfall is made up
in the following month.

“This reyion is one of the
Most watersbort regians in
the world,” says Professor
Dogan Altinbile&, director.
general of the Ageney for
‘State Hydraulic Works (DSD.
“You depend on rain-fed irri-
gation, at the mercy of the

climate, But there doesn't
Rave to be a water war in
the Middle East. Turkey uses
the least amount of water (af
the riparian states) from the
Tigris and Euphrates. ~

He argued that the Tygris,
for example, has highly
erratic water flow, varying
by a factor of up to 40
between dry and wet sea-
sons. Antal water flow in
dry years can be anty one.
fifth of that in years of
heavy rainfall. By building
the Misu dam, the water Now
can be regulated, water
stored during the rainy aea-
son, and the risk of fooding
decreased, he says.

He admitted, however,
that no progress had been
made towards a collabera
tion agreement on water
usage between Turkey, Syria
and frag. But Turkey
insisted that it would never
exploit tts position to pree-
surise its downstream neigh.
bours.

“Turkey has never used
‘water as 3 weapon,” he says.
“When our southern neigh-
dours were under interna.
thonal embargoes, there warn
suggestions that we should
embargo water, too. This
will never be something we
consider, We will pever
make water a reason for
war.”

Prof Altinbilek also
insisted that everyone who
loses land to the GAP pro-
Jects will be compensated, a6

laid down by the Turkish
constitution. Moreover,
resettlement is voluntary
rather tham compulsory, as
in China, he says, These
affected had a choice of
where they went to, and
were given @ house, a plot
and rehabibtation.

Quite bow mech the Kurd.
ish population is invotwed In
genuine consultation about
tbe projects is less clear, As
far as the Tisu dam is com
cerned, much of the work on
resettlement alternatives is
yet to be done. Proper com-
pensation and resettlement
is ane of the assurances the
British government ts souk
ing fron the Turkish govern:
ment,

Indeed, it is unclear how
much the local population
supports the overall GAP
programme, as 4 source of
future jobs, and how much tt
is resented, as an impesiticn
from Ankara, and a project
designed to provide electric
ity supplies for the rest of
the country.

What is clear is that the
Turkish authorities are
determined to press ahead
with thetr ambitions plats,
however much environmen-
ta) opposition they may
arouse in the outside world.

“There is enough water for
everyone,” says Professor
Mter Turan, of Bilgi univer-
sity in Istanbul. “But every-
‘one bas to treat water con-
servation rexponethly,"

00500000001738


{(b)(5))

00500000001918


{(b)(5)]

{(b(5)]

of Finance
O'S Dopo Sine
(202) 647-8988

00500000001549


From: Mills, Marshal

Sent: Friday, February 09, 2001 9:42 AM

To: Clapp, Gene; Stewart, Bizsveth K.

ca Grewe, Maureen; Stedman, Louelien

Subject: URGENT: Conference Call on Turkey Energy Issues and IFis at 10:15-10:30

Details to follow,
Should anyone from GC and/or the IMF office participate?

W/A Peco Lev (eu.
vid #3 Serf rere
sym fox Cte eT Say ‘iu 7

cae ) COVE | - fay a te

00500000001917


[(b)(5)]

00500000001512


((b)(5))

I thank you for your kind consideration of this important matter.

Sincerely,

Michael J. Copps.

Janice L Mazur

Executive Director's Assistant

Office of the United States Executive Director
(202) 458-0118

(202) 477-2967

00500000001708


Turkey Energy Law Response — Suggested edits from ISM
Dear Mr. Briggs:

{(b)(5)]

Sincerely,

Todd Crawford

00500000001590


PRN 2 OU Leek em coy

be e

22 January 2001

The Honorable William Schuerch
Deputy Assistant Secretary
For Intemational Development,
Debt and Environmental Policy
U.S. Department of Treasury
1500 Pannsyivania Ave., N.W.
Washington, D.C. 20220

Hon. W. Schuerch,

Enron Corp.

posed, fast track energy lagistation for deregulation of the energy sector in

The pro;
Turkey is currently being debated in the

BOT projects claiming that Turkey will have an
80T projects are being co-developed by Ameri

that a delicate balance must be st
energy sector with much ni

continuing to provide the Turkish

reasury Guarantees. However, the ATC recognizes
ruck between eliminating Treasury Guarantees and
eeded investment. in this

instance the ATC strongly believes that the arbitrary 2002 deadline is bad policy for
Government of Turkey for the following reasons:

American developers and for the

Endless possibilities.

00800000000026


MAY-4-2003 17°85 1cM

>>> ex.mail.“ritterhof@worldbank.orgTM 05/02/00 04:57pm >>>

{(b)(5)]

Margaret, where do we go from here?

Forwarded by Robin Ruth RitterhoflPerson/World
Bank on
05/02/2000 02:39 PM

James Parks
05/02/2000 01:14 PM
Phone: 579+250 ECSPE

To: Robin Ruth Ritterhoff
ce; Ajay Chhibber, Sally i, Zeijion, James Sayle Moose, Kathleen B.

Subject: Turkey ERL
Robin,

((b)(5)]

202 622 C337 P.aS

00500000001757


From: Fee. Gene
Sent: Friday, January 26, 2001 4:51 PM
To: Stewart, Elizabeth K.; Mills, Marshall; 'rritterhoff@worldbank.org’
Cec: Grewe, Maureen; Walsh, Helen; Tran, Luyen; Coffman, Phyllis
Subject: FW: Meeting with Bill
FYI: After the Turkey meeting, | spoke with Bill about attendance at the Enron meeting on Monday: he agreed that we
should keep the number of atiendees down. | suggested Elizabeth, Marshall or Maureen, and Robin. he said that
sounded fine.
o---Original Message———
From: Coffman, Ptoyllis
‘Sent: ‘Tuesday, January 23, 2001 6:22 PM
To: Capp, Gene
‘Subject: Meeting with Bill
Re Enron Turkish Energy Sector

Will you be ready to meet with Bill on Friday, 1/26 to discuss the memo that was faxed to you this afternoon by Yvonne. If
not please call her.

How about Friday at 3:00 pm in Bill's office.
Aso | have tentatively scheduled a meeting with Bill and Tom Briggs on same topic for Monday 1/29 at 4:00 pm in Bill's

00500000001534


{(b)(5)]

00500000001583


To: Ajay Chhibber
cc: Kathleen B. Mccollom, Sally M. Zeijlon, Ayse Ronay

Subject: Turkey issues
Ajay-- for some mysterious reason, the first time I sent the message below,

Lotus Notes decided net to send it to you, despite my having addressed it to
you, Here it is again.

Robin Ruth Ritterhoff
02/14/2001 06:34 PM
Extn: 88049 EDSO1

To:
ec: Kathleen B. Mccollom, Sally M. Zeijlon, Ayse Ronay
Subject: Turkey issues

Ajay--

((0)(5)]

Regards,
Robin

00500000001928


Jel 22 2891 10:01 FR eo (U pee2sce Pasig

¢ Because power plants typically require a minimum twenty-four month
construction period, imposition of a 2002 deadline will, in effect, terminate these
projects on the day the law is passed.

* Export credit agencies, including US Ex-Im, and commercial lenders have
indicated that they will not Provide financing to projects that do not have Treasury
guarantees or in the event the Treesury guarantee is contingent upon meeting a
2002 commercial operation deadline.

* The Ministry of Energy and Natural Resources and the State Planning
Organization of Turkey are increasingly concerned that the continuing delays in
8Nergy projects will result in extending the energy shortage into 2003.

* The imposition of a deadline for these approved BOT projects will be an
imprudent action during a period of transition in the energy sector that will erode
confidence among potential foreign investors in Turkey. According to the UN,
Turkey already ranks a lowly 54th in the world in aitracting foreign direct
investment, Turkey was able to attract only $785M of investment capital In 1998,
trailing, among others, Malta, the Dominican Republic, Egypt and Vietnam. The
proposed provision of the new energy law that will, In effect, terminate thesa BOT
Projects that are under contract, will be detrimental! to attracting increased foreign
investment in Turkey during a period of expected slow-down in the world
economy,

A strong Turkish economy is vital to a stronger Turkey. And a stronger Turkay, a critical
ally, is in the best interest of the US, Since time is of the essence, we will appreciate
your urgent actions to persuade the World Bank and the IMF to support the delation of
an arbitrary deadline in the proposed energy law. If the Government of Turkey in fact
has no intention of building these 29 Projects, we suggest that the parties rely instead
on the termination provisions of the individua! commercial contracts.

Members of the ATC Energy Committee respectfully request a meating with your office
in order to discuss this matter in more detail. { will contact your office to arrange a
convenient time to meet.

Sincerely,

4
Thomas C. Briggs
Chairman

American Turkish Council Energy Committee

- 00800000000027


MAy-G4-2283 «17:5 ics 202 622 8237 P.il

veau

Malachy,

I just noted a small editing mistake in the background parag
raph of my previous e-mail. The following version will make
more sense.

Sorry,

Michael 8.
x3492

{(b)(5)}

Page 1

00500000001763


Tran, Luyen

From: Stedman, Louelien
Sent: Friday, February 09, 2001 1:00 PM
To: Mis, Marshall; p, Gene; Stewart, Elizabeth K.; Tran,
Cc: Grewe, Maureen; McDonald, Larry; 'Robin Ritterhoff (E-mail)'; 'Patti Brukoff (E-maily’
Subject: RE: Readout of Today's Staff Level Conference Call on Turkey Energy Issues and IFis
((b)(5)]
Thanks.
~——-Original Message-—

From: Mis, Marshall

Sent: Friday, Februsry 09, 2002 12:44 PM

To: Stedman, Louellen; Capp, Gene; Stewart, Elizabeth K,; Tran, Luyen

Cc: Grewe, Maureen; McDonald, Larry; Rabin Ritterhotf (E-mail); Patt Brukof (E-mail); Mills, Marshall

Subject: Readout of Today's Staff Level Conference Call on Turkey Energy Issues and IFis

Importance: High

((b){5)]

00500000001813


Subject: Re: FW: Turkish Energy Sector Meeting

{((b)(5)}

Luyen.Tran@do.treas.gov on 01/26/2001 08:43:23 AM

To: Rritterhoff@Worldbank.Org
ce:

Subject: FW: Turkish Energy Sector Meeting

fyi.

> -—--Original Message-----

> From: Grewe, Maureen

> Sent: Friday, January 26, 2001 8:41 AM

>To: Tran, Luyen; Stedman, Louellen; Mills, Marshall
>Cc: Clapp, Gene; Radelet, Steve

> Subject: RE: Turkish Energy Sector Meeting

>

{(b)(5)]

00500000001803


Stewart, Elizabeth K.

From: Stewart, Elizabeth K_

Sent: Monday, Fi 12, 2001 4:30 PM

To: ‘rritterhofi@wo' org’; Stewart, Elizabeth K.; Mills, Marshall
Ce: Tran, Luyen

Subject: RE: Turkey Letter

Marshall/Robin: Bill doesn't leave until 3 tomorrow. Think Bill should have the
opportunity to review. Marshall (since you are over in main Treasury) could you leave a
folder with a printed copy for Bill to take home this evening. Thanks.

woeee Original Message----~

Prom: rritterhoff@worldbank.org [mailto:rritterhoffeworldbank.org])
Sent: Monday, February 12, 2001 3:43 PM

To; Blizabeth.K.Stewartedo.treas.gov; Marshall .Mille®do.treas.gov
Ce: .Tran@do.treas.gov

Subject: Turkey Letter

The revision including Marshall's changes is attached. Could you run it by Bill
(if there is time tonight-- otherwise I guess run it by Brian as acting) so Todd
ean sign off?

Thanks-- Robin

(See attached file: Turkey Electric Power Law Response.doc)

00500000001556


Turkey [(b)(5)}
Question: [(b)(5)]

Answer: [(b)(5)]

Drafted by Marshall Mills, OASIAVISM, 622-9398, May 3, 2001

00500000002353


Stewart, Elizabeth K.

From: rritterhofi@worldbank,

Sent: Wednesday, Feprusy 12, 2001 3:15 PM

& real! pre Maureen, Grewe@do.treas.gov; Gene.Clap| treas.
Elzabeth K Stewart@uo Weas gov ”, Larry. McDonald@do.treas gov: wworldbank org;

Subject: RE: FYI: E rr O79 on request on Turkey Electricity Law and IF conditionality

{(o(5)]

Luyen.Tran@do.treas.gov on 02/14/2001 02:51:01 PM

To: Marshall.Mills@Do.Treas.Gov, Maureen.Grewe@Do.Treas.Gov,
Gene.Clapp#Do.Treas.Gov, Elizabeth. K.Stewart@Do.Treas.Gov,
Larry.Mcdonald@Do.Treas.Gov, RritterhoffeWorldbank.Org

eo: Porukoff£@Imf.Org

Subject: RE: FYI: Embassy action request on Turkey Electricity Law and IFT
conditionality

[(©)(5)]

Original Message----~

F Mills, Marshall

Sent: Wednesday, February 14, 2001 2:48 PM

To: Grewe, Maureen; Clapp, Gene; Stewart, Elizabeth K.; Tran, Luyen;
McDonald, Larry; Robin Ritterhoff (E-mail)

Ce: Patti Brukoff (E-mail}

Subject: FYI: Embassy action request on Turkey Electricity Law and
IFI conditionality

Importance: High

v¥VVV VY

{(b)(5)}

00500000001584


Office of Maltilateral Developinent ?tBaaks (OASTA/IDE
1500 Pemnayivanie Avemue, NW )
. .Koom 3501 5Y
Washington, D.C.

(Fix # 202-622-2505)

Dates _/= 27-07} | _ Pagelot 3 Pagers)

To. MMM LM tte

Sy ee ee ee

00500000001654


JAN-25~2081 16:19 US TREAS INTL AFFAIRS 22 622 2536 P.a2

_

Thomas C. Briggs
Vite Previtent
Gavernment Afirirs
Ny, @ Enron Corp.
%, 1775 Bye Stover, NW, Santty $00

Weshingian, DE 2OG0E

22 January 2001 202-466-9169
Fox 202-626 3372

The Honorable William Schuerch temvisgeenrencon

Deputy Assistant Secretary

For Internationa! Development,

Debt and Environmental Policy
U.S. Department of Treasury
1500 Pennsytvania Ave., N.W.
Washington, 0.C. 20220

Hon. W. Schuerch,

1am writing on behall of the American Turkish Council and its Energy Committee to
request your support in a matter that is of great importance to American developers of
power projacts in Turkey and to the Turkish economy. In brief, we ask that you exercise
the influence of the United States in the World Bank to moderate the Bank's insistence
that Turkish Treasury guarantees for 29 projects be conditioned on entry into service of
the power plants by the end of 2002. These 29 projects already have been approved
and, in many cases, substantia! sums of money have been expended in reliance on the
availability of Turkish Treasury guarantees that are now threatened by the Worid Bank's
new policy. Moreover, termination of these projects will engender an unacceptable risk
of power shortfalls in Turkey that will threaten economic growth, as well as consumer
well being.

The proposed, fast track energy legislation for deregulation of the energy sector in
Turkey is currently being debated in the Turkish Parliament and is expected ta come up
for a vote within a week. One provision of this proposed legislation concerns a ceadiine
of 2002 during which 29 approved build-operate-transfer (BOT) projects would have to
reach commercial operation in order to qualify for Turkish Treasury guarantees. World
Bank and the IMF are advocates of such a deadline, questioning the need for additional
BOT projects claiming that Turkey will have an energy surplus in 2003, Two of these
BOT projects are being co-developed by American companies.

The Energy Committee of the American Turkish Council has long advocated
appropriate deregulation of the Turkish energy sector and we support the goa! of
aliminating the need for Turkish Treasury Guarantees. However, the ATC recognizes
that a delicate balance must be struck between eliminating Treasury Guarantees and
continuing to provide the Turkish energy sector with much needed investment, In this
instance the ATC strongly believes that the arbitrary 2002 deadline is bad policy for
American developers anc for the Government of Turkey for the following reasons:

Endless possibilities.”

00500000001791


—«JAN-24-2281 16754 w Ie Ne ee On

male Pert
_ he
Fan wernt SHEET |

1775 Eyo Street Street, N.W co io ee te! !
Washington, DC 20008 ig 4
202-828-3360 TUNE a-l& ‘4
202-828-3372 (fax) ° 9 Oe —1SM k
TO: Wilham Seb werch «Cordage .
202- BRB- 2536 Seed, mae |
FAX #: af Gea ee
RE: Tarkish Energy Sects ana a ae
ens ads y
DATE: =e a) 5 !
~- petodble; ioe ” i
3
Number of pages including cover sheot: —_>— e
Message: re Ilne
eu 22
5 §
Sal

00500000001683


Stewart, Elizabeth K.

From: rritterhotf@woridbank.:
Sent: Thursday, February 8, 3001 5:48 PM
To: en. Tran@do. treas.gov
Ce: rilehatgworane ql Merete bah a Ena Sora ee
cup Se ree ene Lerner

Terkey Beergy Letter

‘OFZ508 re...

[(b)(5)]

Luyen. Transdo.treas.gov on 02/06/2001 05:38:36 PM

To: Rritterhoff@worldbank.Org, Marshall .Mills@Do.Treas.Gov,
Blizabeth.K.Stewart@Do.Treas.Gov, Pbrukoff@Imf.Org
ec: Maureen, Grewe@Do.Treas.Gov, Luyen.Tran@Do.Treas.Gov

Subject: RE: Turkey Energy Letter

you didn't ask for my opinion, but i'm offering you a few minor changes
{attached} that you are free to take or not take.

Slated Original Message--~--~

Prom: rritterhoff@worldbank.org (mailto: rritterhoffeworldbank.org]
Sent: Thursday, February 08, 2001 5:21 PM

To: Marshall.Millesdo.treas.gov; Elizabeth.K.Stewart@do.treas.gov;
PRRUKOFPeimf.org

Cc: Maureen.Grewegdo.treas.gov; Luyen.Trangdo.treas.gov

Subject; Turkey Energy Letter

{(b)(5)}

(See attached file: Turkey Energy Letter 012501 rev.doc)

(See attached file: Turkey Energy Letter 012501 rev.doc)

00500000001521


SOUTH-EASTERN ANATOLIA PROJECT by Quentin Peel

Communication gaps hit

The development project, which will hamess the waters of the Tigris and the
Euphrates, is a big project in terms of its scale and the controversies which surround it

Everything about Turkey's
Southeastern Anatolia Prof
ect, inown by its acronym
GAP, is writ large, including
the controversies, It is by far
the most ambitious develop-
ment project in the coun!
intended to harness th
waters of both the great
Euphrates and Tigris rivers,
and bring new economic
development to nine prov.
inces

It covers a region of mare
than 75,000 square kilo-
metres, nearly 10 per cent of
Turkey, and containing
some @) per cent of the land
identi! otentially
irrigable, The plans, con

caived back in 1977, envisage
4 network of 22 dams and 19
hydroalectric power plants
to irrigate 1.7m hectares of
land, and provide energy tx
a power-hungry country, at a
o6t of some S22bn,

Yet, in spite of the fact
that it is supposed to bring
sorely-needed prosperity to
‘one of the poorest regions of
Turkey, creating 3.8m new
Jobs, and tripling per capita
incomes, it remains highly
controversial, especially out-
side the country.

It is unclear how much the

If that were not enough, It
aldo boasts pricaless archae
ological remains from the
rich history of Mesopotamia
some of which will eventu-
ally disappear beneath the
waters of the dams under

n

‘The Jatest controversy

local population supports
the overall GAP programme

That is perhaps hardly
surprising, considering that
the dams are being built ina
region torn by years of civil
war, and bordering both
Syria and Irag, two of Tur
key'’s most sensitive and
potentially troublesome
neighbour

concerns the planned $2bn
Tisu dam and hyéro-lectric
project on the Tigris river,
close to the Syrian border,
intended to provide power
suppliés of some 1200MW.
The plans have triggered a
passionate political debate
not least in Britain, where

the government is deing
asked to provide export
credit guarantees af some
$2i0m to the chief construc

tion contractor, Balfour
Beatty.
Objectors claim the

scheme will farce the reset-
tlement of at least 15,000
tainly Kurdish people, Dood
the historic town of Hasan-
koyf, at well 2s scores of
amaller villages, amd cause
water shartages and possible
pollution downstream in
Syria and Iraq

Its defenders maintain
that & will bring proeperity
and economic development
to the region, where Kurdish
militants belonging to the
Kurdistan Workers’ Party
(PKK) have beer: fighting the
Turkish militayy tS years.
They also insist that what is
Primarily a bydro-clectric
scheme will pot, by defini

rate

Sarur S4" Regen
Derren! Aor xt

tHom, camse any wat
ages downstream,
Although the Mise
is entirely hydro-elec
associated Cizre dan
Tigris is intended fo
thon as well, far semen
hectares. Indeed. wh
60 per cent of the

00500000001737


{(b)(5)}

‘We continue to hope for US Treasury assistance in arranging a meeting
to discuss some of these issues in more detail.

Thanks,
Michael B.

>>> ex.mail,"rritterhofi@woridbank org” 0540200 04:57pm >>>

{(b)(5)]

Margaret, where do we go from here?

Forwarded by Rabin Ruth Ritterhoff/Person/Word
Bank on
05/02/2000 02:39 PM

James Parks
05/02/2000 01:14 PM
Phone: 579+250 ECSPE

00500000001769


Page | of 2

Stewart, Elizabeth K.

From: Mills, Marshall

Sent: Thursday, March 08, 2001 8:38 AM

To: Stewart, Elizabeth K.; Clapp, Gene

Ce: Grewe, Maureen

Subject: FW: PRESS RELEASE ON NEW ELECTRICITY MARKET

--—-Originel Message——-

From: TUSIAD-US-News [mailto:communications@tusiad-us.org)
Sent: Wednesday, March 07, 2001 8:20 PM

To: marshall.mills@do.treas.gov

Subject: PRESS RELEASE ON NEW ELECTRICITY MARKET LAW

a

TURKISH INDUSTRIALISTS' AND BUSINESSMEN'S ASSOCIATION
WASHINGTON OFFICE
TS/WSH/01-003

FOR IMMEDIATE RELEASE Contact: Abdullah Akyuz
(202) 776-7770

TUSIAD, comprised of Turkey's leading CEOs and executives, is an independent, non-governmental
organization dedicated to promoting public welfare through private enterprise.

TUSIAD: "The Electricity Market Act is an important step towards
opening the electrical energy sector to competition and resolving the
electricity shortage in Turkey."

March 7, 2001, Washington, DC: The Electricity Market Act has become effective after being
accepted in the Turkish National Assembly and approved by the President. Turkish
Industrialists' and Businessmen's Association (TUSIAD) has made a statement revealing its
views on and delight with this development:

"In the midst of the economic crisis that Turkey has been going through, the opening of the
electrical energy sector to competition has been an indication of political determination in
increasing the competitive power of Turkish markets through structural reforms. Besides, the
opening of the electricity market to competition (production- transfer-distribution-sale) will be
an important step in the solution of the energy problem, which has increasingly made its
presence felt in Turkey.

01/17/2002
00500000001496


{(b)(5)]

>

> maureen & marshall -- probably would make sense to have one of you there.

> please call gene to see what has transpired on this. thanks.
>

> ----Original Message-----

> From: Coffman, Phyllis

> Sent: Thursday, January 25, 2001 6:09 PM

>To: Clapp, Gene; Stewart, Elizabeth K.; Tran, Luyen

> Subject: Turkish Energy Sector Meeting

>

> Friday, January 26 at 3:00 pm in Bill's office.

00500000001807


From: @x.mail" spaulson@worldbank org”

To: ex.mail( Elizabeth. K Stewart”."JoeEichenberger’,”..
Date: 5/22/00 6:47pm

Subject: Trust Funds Discussion -- Audi/Budget Committees:
{(b)(5)]

Many thanks for your input Elizabeth — most appreciated.

ce: ex. mali(terawford @worldbank.org”,"Jpiercy@weorldba...

00500000001703


a

President Siileyman Demirel Patt) is keen to stay cn. His former rival, Bulent Ecevit, prime minister, ‘wants to maintain etabitty at 9 wenaitve time fort

Stability seen as key tc

Many obstacles to investment are being tackled by IMF-backed reforms a

President Sileyman Demirel
ta January opened a shiny
new airport in Istanbul, Tar
key’s business and touriem
capital, almost 20 years after
the ides of a new privately-
financed terminal was first
mooted. The $X06en project
was completed eight months
ahead of schedule by # Tur:
co-Austrian sortium,
Which will recoup its invest
mem by operating the alr
port until 2004

Both the terminal's early
completion and futuristic sil
houette seemed to symboli

Turkey was finally on the
move to a bright new future
The optisaism was inspired

by two cructal develop-
ments

In December, Turkey was
accepted as a formal candi
date for membership of the
‘The start
of this year saw, too, the
launch of an ambitious distin
flation and structural reform
programme backed by the
International Monetary
Fund.

But the airport tmaugura
tion ceremony was also
tinged with Lrony, For many

observers, Mr Demirel, who
has cut the ribten an bum
dreds of infrastructure pro-
jects, shares responsibility
been wrong
until now.

srised by political and
economic instability

Yet, BOlent Ecevit, the 7
yearcld peime minister and
his exstwhile bitter rival, has
even threatened to dissolve
his coalition in order to
ensure that Mr Demirel is
allowed to serve a second
term when bis current matt
date expires on May 16.

This seemingly paradoxt-
cal development bas been
inupired not just by the fact

that both men have grown
more statesmaniike. As Mr
Roevit puts it: “The world

bas changed, Turkey has
changed, so everybody has
changed” He has expressed
fears that throwing the job
open to free competition
would split the threeparty
coalition and endanger hard:
won political stability that 1s
essential to successful eco:
nowsic reform.

“We are passing through
very sensitive stage for the
economy. It would be a pity
if existing stability were
upest,” says Mr Ecevit

‘The cohesiveness of bis
government until now haa
been something of a miracle
in Turkish terms. Combining
former leftwingers with
rightwing nationalists who
rset | each
street violence in the 1980s,
the government has
launched economic reforms
that are both long overdue

sury undersecretary who is
the country's top financial
offiesat,

identifies political
that plagued the
until last year’s
elections as the chief culprit
for the country’s ecomomic
failings. These include
chronic double-digit infixtion
and the failure to attract the
lavel of foreign investment
warranted by Turkey's
potential. Over the past 10
years this nation of 65m
people has attracted just
direct invest

into Hungary in ome year

“We cannot éay that Ty
bey has been very successful
in attracting foreign direct
investment,” concedes Mr
iralp. “The problem bs
inflation, and political

Without lasting
governments in the 19903, we
were mot able to have eco-
nomic stability either,”

of investment is
particularly visible in
decrepit state-owned infra
structure - whether in daily
power cuts or miserable pub-
transport and traffic jams
Istanbul, the country's
biggest city with a popula
Da of Sm,

‘The enerry sector is par.
udarly hungry for cash It
has scraped by on around
Sibn investment a year even
though Turkish energy plan
nors reckon that Turkey,
st growing

Many of the obstacles to
the development of infra
structure in particular and

aj

econom

structut
privatis
stateow

The
begun ¥
St per
the co
leum re
offering
of Tape
listic «
piece of
the sal

privati

remain
positly
reform

00500000001728


Clapp, Gene _

From: tcrawford@worldbank.

Sent: Wednesday, February 1 2001 9:45 AM

oe ridemateneetibeer on, Gene.c treas.gov
Subject: RE: Turkey~ 2nd Marker Report on Guarantee
[(b)(5))

Luyen.Trangdo.treas.gov on 02/13/2001 01:36:09 PM

To: RritterhoffeWorldbank .Org, Terawford@Worldbank.Org,
Gene. Clapp@Do.Treas.Gov
ce:

Subject: RE: Turkey-- 2nd Market Report on Guarantee

((b)(5)]

weee- Original Message-----

From: rritterhoffeworldbank .org (mailto: rritterhoffeworldbank.org]
Sent: Tuesday, February 13, 2002 10:36 AM

To: Marehall .Mills@do.treas.gov; Maureen.Grewe@do.treas.gov;
Sara.paulsonédo.treas.gov

Ce: Katerina. Sloniewskya#do.treas.gov; Luyen. Tranédo.treas.gov
Subject: Turkey-- 2nd Market Report on Guarantee

Importance: High

{(b)(5)]

{See attached file: Guar Statement by T Crawford.doc)

Marshall .Mills@do.treas.gov on 02/13/2001 09:20:48 AM

To: Rritterhof f@Worldbank .Org
cer

Subject: FW: Turkey: Summary Market Report, Monday, February 12

00500000001919


--

Tewistatio
ens the wale
ven. though
tis Dogan
eeted that It

@ to argue
m qualified
ith the gov.

ad the gow
to sell off

emain, The
ith the gov
wedness to
ol of state
ises after
kes in

will oe
cuntenilleng
ears, with
wining that
mld ©
Hable. Ie ts
imprescn
ment seee
sarily as
exercise
6 proceeds
tack inte

it has also
dain either

sale wt

wetion cote
to whics
rurage for.
to acquire
petvatisad.
ent restric:
snership of
ss, and al
i for the
ve foreign
with pow
songlomer
© expertise
dons,
We ontgaing
t of Turk
ere will be
mm on enn:
the 20 par
ake of his
» concedes
mnt has not
whether to
dling stalue
or whether
eventually

WATER by Leyla Boult

A lSyear contract won by
‘Thames Water, the UK wtik
ity, to supply water for the
industrial town of Ixmit
could set a trend for a pcb
vately-run water and sawer-
aye industry in Turkay. But,
in spite of being heartened
by the pew law allowing
international arbétration in
disputes, Thames for ome
does not expect a bonanza of
new contracts, at least in the
short run.

ners, completed the $300m
deal to bud the biggest prt
ay-financed water plant
in Turkey tn 1988 It had
| secured 2 special exemption
| trom Jegistatiom which at tie
time gave ‘Turkey's highest
administrative court, the
final say in disputes.

But now that the main
Jegal obstacle to foreten
investment has been
remored, it is up to Turkish
municipalities to seek pri-
vate operstors to run their
water and sewerage The
Turkish state must also
remove bureaucratic obsta:
chs which still Binder finan.
cing and dealamaking, whibe
financiers must became coo
winced that projects can pen
erate sofficient and retisibe
| revenums to recoup invest
| ments, Public infrastractare
| duals have traditionally bewn
| secured by Turkish treasury
guarantees, but there is a
limit to tho number of guar
| antees Turkey can afford to
issue

Nonetheless, examples
ihe stow Ut par
ter operatars - led by
Freoch amd British compa
niee which have the longest
experience c€ running pri
vate sector water and sewer:
age services at home - can
enhance significantly the
quaity and cut the costs of
intrastructure traditionally
operated by the ststa, For
companies such ws Thames,
which face saturated and
incrwastngly regulated mar-
kets at bome, expan’
abroad {s an important
opportunity to generate
growth far shareholders,
Sut the undoubted
improvements brought to
customers by private sector
operators have ustalty been

in charges. which can prove
politically unpopular. Tae
very notion that handing
over public srvicws tp pet
vate operators can benefit
consumers Will also need
sore careful selling before
municipalities’ keen interest

With the removal of some obstacles to

im the concept translates
into a proligeration of can:
tracts,

Yurdakul Yigiteaden,
under-sectetary at the sxinis
try for energy and natural
retourees, concedes that
“cost pressures will move
meniespalsties more and
buy services from
outside”. But, he warns,
trunsferring services te pri:
vate operalors “wort work
if the consumer has te pay
ouble oF triple” what he
wad paying state-owned util
ties,

Although 2 separate Lzmit
sewerage plant Gnanced by
the Buropean Investment
Bank did require a real
increase tm charges, the
Thames project anticipated
instead an increase in
demand from industrial
users. Factories in the indus
tral heartland arcana Tamit

The lemit plant ia generating ervy TO per oer of the revenues It needs to becsme saif-frencing

have s0 far abstracted: waber
from private wells, or, to the
detriment of the environ-
ment, from @ local lake.

But with the exception of
one mew recent customer,
new demand has not been
fortbeoming frome industry.
Nor has extra water bee
required by Istanbel, th
country's biggest city, Just to
the northwest of Lemit, ss
also expected ortginally.

‘As a result the krmit plant
{s generating only 70 per
cent af the revenues: it needs
to become seiffinancing. It
did, however, receive # boost
of sorta from the dewasta
earthquake which struck the
area om August 17.

‘Thames was not only sbie
to show its “commitment to
the paople” of the region
when ft flew in both bumani:
tarian aid and extra man
power tn belp fix leaky pipes

and burst mains in lzmit
proper. The plant — which
suffered only trivial damaye
from the earthqoske wos
also able significantly to
increse capacity to supply
neighbouring towns whose
older systems dam
ageds in the wake of the
@isnster. Su then, it bas
retained a now castomer. it
is now the backup supplier
for the reighbourtne town of
Golcuk, helping to increase
the plant's revenues to 70
from ® per cent of the level
required for the project to
pay for soit.

‘Turkey's acoeptance at the
end of last year a4 & full can
didlete for @embership of the
European Union repeusents a
further opportunity for pep
vate sector water utilities.
Stringent new envircamen-
tal standards for water qual
ity have been the main

‘Private schemes trickling in

foreign investment, municipalities can seek private operators

Gotver of big investments in
costly new woter and sewer
age plants tn the Burcpean
Union. Ax » precondition of
mumbersbip, candidate
comntriag are expected 10 0
far townrds exibractng stan
dards that constitute an
important part of the
socalled soguis commeunaw
sare

In the meantime however,
until the Inmit plant does
become —s#if-financing,
‘Thames and its partners
enjoy a Turkish government
guarantee to make wp the
shortfall in revenues. “The
commercial issues are noth
ing that would horrify us at
this stage of such major
development,” says Jim
Hentiey, Thames’ country
manager for Turkey.
“There's not a feeling that
this peoject is anything but a
ig success.”

accompanied by n Increase |

00500000001734


Stewart, Elizabeth K.

From:
Sent: Ene, Sana January | 28, 2008 11:09 AM
To: Mills, Marshall ‘rri bank. Org
7 Tran, Luyen; BERUKC Lorg’, Grewe, Maureen; Stedman, Louellen;
‘te ‘Stewart, Elizabeth K.

Subject: RE: FW: Turneh Poon acter Mes Meeting

I have a call in to FB at State. 4 will let you know if I hear anything.

annee' Original Message-----

Prom: Mills, Marshall

Sent: Priday, January 26, 2001 11:03 AM

To: ‘'rritterhoffeworldbank.org'; Clapp, Gene

Ce: Tran, Luyen; Clapp, Gene; PBRUKOFFaimf.org; Mille, Marshall; Grewe,
Maureen; Stedman, Louellen; tcrawford@worldbank.org; Stewart, Elizabeth

Subject: RE: PW; Turkish Energy Sector Meeting

I just talked to US Embassy Ankara.

{(by(5)] I have a lot of information to share -- I think it would be
most efficient to wait until 3 pm.

Marshall

arene Original Message-----

From: rritterhoff@worldbank.org [mailto:rritterhoffeworldbank.org)
Sent: Friday, January 26, 2002 10:55 AM

To: Gene.Clapp@do.treas.gov

Cc; rritterhoffeworldbank.org; Luyen. Tran@do.treas.gov;
Gene.Clapp@do.treas.gov; PBRUKOFFwimf.org; Marshall. Miilsedo. treas.gov;
Maureen.Grewe@do.treas.gov; Louellen. Stedmanédo.treas.gov;
tcrawford@worldbank.org; Elizabeth.K.Stewart@do.treas.gov

Subject: RE: FW: Turkish Energy Sector Meeting

{(b)(5)]

Gene. Clappado.treas.gov on 01/26/2001 10:37:44 AM

To: Rritterhoff@Worldbank.Org, Luyen.Tran@Do,Treas.Gov

cc: Gene.Clapp@Do.Treas.Gov, Pbrukoff@Imf.Org, Marshall .Mills@Do.Treas.Gov,
Maureen.Grewesdo.Treas.Gov, Louellen,StedmansDo.Treas.Gov,
TerawfordeWorldbank.Org, Elizabeth.K.Stewart@Do.Treas.Gov

Subject: RE: FW: Turkish Energy Sector Meeting

{(b)(5)]

00500000001536


((b)(5))

00500000001921


Turkey Energy Law Response

Dear Mr. Briggs:

[(b)(5)]

Sincerely,

Todd Crawford

00500000001809


many thanks.

{(b)(5)}

ajay

Robin Ruth Ritterhoff
02/15/2001 01:36 AM
Extn: 88049 EDSOL

To: Ajay Chhibber
cc: Kathleen B. Mccollom, Sally M. Zeijlon, Ayse Ronay

Subject: Turkey issues

Ajay-- for some mysterious reason, the first time I sent the message below,
Lotus Notes decided not to send it to you, despite my having addressed it to
you. Here it is again.

Regards,

Robin
s-------—nnne= Forwarded by Robin Ruth Ritterhoff/Person/World Bank on
02/14/2001 06:34 PM -——-------——-----------—-

Robin Ruth Ritterhoff
02/14/2001 06:34 PM
Extn: 88049 EDSO1

To:
cc: Kathleen B. Mccollom, Sally M. Zeijlon, Ayse Ronay
Subject: Turkey issues

Ajay--
{(b)(5)}

00500000001827


>
> Priday, January 26 at 3:00 pm in Bill's office.

00500000001495


Wafer fi gre

Clapp, Gene Stte e: Lt cea
From: Mills, Marsha® Ox
Sent: Friday, February 09, 2001 12:44 PM O Fire LL
To: Stedman, Louelien; Clapp, Gene; Stewart, Elzabeth K.; Tran, Luyen 2
Ce: Grewe, Maureen, McDonald, Larry; Robin Ritterhoff (E-mail), Patti Brukoft (E-mail); Mills,
rst
Subject: Readout of Today's Staff Level Conference Call on Turkey Energy Issues and IFis
Importance: High

((b)(5)]

Please call me if you have further questions.

Original Message-—
From: Stedman, Lovelien
Sent: Friday, February 09, 2001 10:24 AM

00500000001914


00500000001530


tell what I know on the Bank side-- I have talked a lot with Bank staff on
this.

{(b){5)]

Luyen.Trangdo.treas.gov on 01/26/2001 08:43:23 AM

To: RritterhoffeWorldbank.Org
cer

Subject: FW: Turkish Energy Sector Meeting

fyi.

> sesee Original Message-----

> From: Grewe, Maureen

> Sent: Priday, January 26, 2001 9:42 AM

> Tor Tran, Luyen; Stedman, Louellen; Mills, Marshall
> Co: Clapp, Gene; Radelet, Steve

> Subject: RE: Turkish Energy Sector Meeting

[(b)(5)}

>
> Marshall -- did you get a fax from Phyllis?

wy

ooo-- Original Message----~
> From: Tran, Luyen

>» Sent: Priday, January 26, 2001 8:20 AM

> To: Stedman, Louellen; Grewe, Maureen; Mills, Marshall
> Subject: FW: Turkish Energy Sector Meeting

((b)(5)]

> maureen & marshall -- probably would make sense to have one of you there.
please call gene to see what has transpired on this. thanks.

v

v

> weer Original Message----~-

> From: Coffman, Phyllis

> Sent: Thursday, January 25, 2001 6:09 PM

> To: Clapp, Gene; Stewart, Elizabeth K.; Tran, Leyen
> Subject: Turkish Energy Sector Meeting

>

> Priday, January 26 at 3:00 pm in Bill's office.

00500000001653


To: ‘Stedman, Louellen; Clapp, Gene; Stewart, Elizabeth K.
cc; Grewe, Maureen
Subject: RE: URGENT: Conference Call on Turkey Energy Issues and IFis at 10:15-10:30

Sorry to throw you in the middie of this ... [(b)(6)]
{(b)(5)]

—-~Original Message--~
From: Stedman, Louelien
Sent: Fricay, February 09, 2001 9:44 AM
Tor Mils, Marshall; Capp, Gene; Stewart, Elzabeth K.
Cc; Grewe, Maureen
Subject: RE: URGENT: Conference Cail on Turkey Energy Issues and IFIs at 10;15-10:30

Who is the conference call with???

-oeOngnal Message——
From: Milfs, Marshvall
Sent: Friday, February 09, 2001 9:42 AM
To: Clapp, Gene; Stewart, Bizabeth x.
Cc: Grewe, Maureen; Stedman, Loudilen
Subject: URGENT: Conference Call on Turkey Energy issues and IFIs at 10:15-10-30

Importance: High

Details to follow.
Should anyone from GC and/or the IMF office participate?

00500000001815


Subject: Re: Turkey issues (Document link: Robin Ruth Ritterhoff)
Robin,
many thanks.

{(b)(5)]

ajay

Robin Ruth Ritterhoff
02/15/2001 01:36 AM
Extn: 88049 EDSO1

To: Ajay Chhibber

ce: Kathleen B, Mccollom, Sally M. Zeijlon, Ayse Ronay

Subject: Turkey issues

Ajay-- for some mysterious reason, the first time I sent the message below,
Lotus Notes decided not to send it to you, despite my having addressed it to
you. Here it is again.

Regards,
Robin

Robin Ruth Ritterhoff
02/14/2001 06:34 PM

Extn: 98049 EDSOL
To;
cc Kathleen B. Mccollom, Sally M. Zeijlon, Ayse Ronay

Subject: Turkey issues
Ajay-~

((b)(5)]

00500000001508


Stewart, Elizabeth K.

From: Mills, Marshall

Sent: Thursday, February 15, 2001 9:29 AM
To: Radelet, Steve: Grewe, Maureen; i Clapp. sare Stewart, Elizabeth K.
Patti Brukoff Email. Robi in Ri ‘E-mai
Soiject: FW: Turkey: deadline extended to ane 30, Feb 15, 2001
Importance: High
were tet

Foonginal Messege—

F der Securities [mailto: BenderSecurities@BenderSecurities.com)
Sent: Februar 15, cd 4:51 AM

To: ‘marshall. mil

See Try TOORS: Jeane extended to June 30, Feb 15, 2001

{(b)(5)]

00500000001503


Stewart, Elizabeth K.

——
From:
Sent:
To;
‘Subject:
Tustery Chectric Power
Lew Psp... Phyllis - this time with attachment. Please print for Bill's review. Thank

----- Original Message-----

From: rritterhoffeworldbank.org [mailto:rritterhoffeworldbank.org]
Sent: Monday, February 12, 2001 3:43 PM -

To: Elizabeth.K.Stewart@do,treas.gov; Marshall .Millse@do.treas.gov
Cc; Luyen, Tran@do.treas.gov

Subject: Turkey Letter

The revision including Marshall's changes is attached. Could you run it by Bill
{if there is time tonight-- otherwise I guess run it by Brian as acting) so Todd
can sign off?

Thanks-- Robin

(See attached file: Turkey Electric Power Law Response.doc)

00500000001492


JAN-25-2082 18:15 US TREAS INTL AFFAIRS 282 622 2536 Pia

+.

Yau prs (oot
Cling th
FAX COVER SHEET .. |

ENRON, WASHINGTON

1775 Eye Street Street, N.W. o tio ee to
Washington, OC 20006 < re

202-826-3360 (call
202-826-3372 (fax) - TMKe a.

, Ayah —)sv
TO: W: Ilham Se }, uereh « onde

FROM: Tom Bri Ss _ eo
FAX #: 202- GAZ ~- 2536 Sete at

of Gens nme
RE: Tackish Energy Secte- dun %

sos is

DATE: 2? Yun Lary _ peel & Cdn
3 " 4 .

Number of pages including cover sheot: ¢
Message: rtm
Sp lane
an
ak ©

00500000001691


ft ae

JAN-29-2881 18°28 ton 282 622 0337 P.81786

Department of the Treasury

Departmental Offices
Middle East and South Asian Nations
Office Office Phone Number
202-622-0037
Fax Phone Number
FAX TRANSMITTAL SHEE T|
Date: : Time:
- To:_fob'n Ritterhiott 472-2967
- Fax Number
2-1 228
Elizabeth Steum+ 2-1228
From: Mow slal/ 21358

Phone Number

Number of Pages: Z
. (including this page)

Comments: —Madiaede Eve trolavy's They Fossa AMG.

\

If problerns occur with this transmission, please notify sender on the Office Phone Number above.

00500000001619


Stewart, Elizabeth K.

From:

To:

Subject:
Importance:

WATCHOFFICE

McDowell, John: McFadden, roars Moca Tom: Me, Wes
Meenan, Ann; Moldenhaver, Michelle, Monderer, Michael, Monroe,
Mora, Carl, Muench, Mi ; Murden, Bill: Neil, Jeff Nicholson: Marci, Marcie:
Quellette, Conrad; Parcell, n: Perry, Rosa; Quinn, Lois; Ralyea, John; gre
Resnick, ‘Bonnie: a; Rlgrodsky, Ma Marc; rc; Rolin Barbara: Romey, Mike: Rowan, Carol;
Schuerch, Wilkam:

bach, Kenneth; : Sevethick,
Dale: Shah, Sonal; rl ser ees John; Skelton, Joy; Smith, Martha: Squitieri,
etnaus, Andro Wane”, Sharon, Taro 3 pone Tillotson, Mary

Grace;
WATCHOFFICE, WATCHOFFICES: Williams, Cassandra. eee ya taryEllen; Wolkow,
Dwight: Ashin. Paul; Atukorala, Viral, Austin, Carlos; Berg, Andrew, Biory, Gretchen
ington, Michele: Calahan, Richard B.; Carter, Jana; ‘Carter Maicolm; ina, Jat; Cohen,
David, Corfield, Anna; Boos Brian; Dohiman, Peter, Donahue, Joseph: Donovan, Meg:
Donovan, Stephen; Egan, cannes tein, Natan; Fuentes, Barbara; Gelpem, Anna,
Giancola, Mark, laf Gasgow. una ick, Warren; Grewe, Maureen. , Gunaratne, Nilmini;
Haarsager, Kevin; Hardesty, Joann; Herrling, ‘Sheila; High, Eleanor,
Hoffman, Barak; Hubbard, Susan; Jewell, Andrew; Johnson, Alana; Johnston, Maura;
Kaproth, Robert, Keene, 0 Carolyn: i aya Adnan; Kosmides, Ivy; Kuhlow, Margaret; Kushlis,
Chris; Laufman, judy; Lemer, h-Dumiler, Chris; Maffei, Marie; Mathiasen,

Karen; McDonald, Larry; McHale, Stephen: logg, Carrie: Middleton, Michelle; —
Wilbur, Moore, H loran, John: More, Alan, y Liza: Munk, Fy uses Nugent, Malachy,
Pringle, Veronica; fadelet, Steve; Rajan, Samira i Rao, Geetha; Read, Tobias;

Shea, James; Simon, Mae; Sobel, Mark: Sted Fo eens wert Elcaben Ke Teed

Mary; Tarter, Dale: yruman, Ted, Urbanas, Beth: Vagle, Steven; Valentic, Marsha; Vandivier,

Daved; VanLi Theo; Wagne , Walker, Orelious; Warden, Staci- Weaver, Elizabeth,

Wes Wika. Wea ay, A, ae, yi: Wann. Laan; Warr Plo Ws
fa, rea, ni

Watchoffice Press Alert

High

*DJ Dervis Named Turkey State Min In Charge Of Treasury - PM

ISTANBUL Cow Jones)--Turkish prime minister Bulent Ecevit announced Friday
that World Bank executive Kemal Dervis has been appointed state minister in
charge of the Tromso with additional responsibility for reforming the

economy.

"With his extensive international knowledge and deep experience | am sure
Dervis will succeed,” Ecevit said.

’@ Serdengecti has been appointed central bank governor and
Fosteat Ea ‘= ing undersecretary of the treasury.

wil also supervise the banking reguisiny be , the central bank, the
Markets Board, and three state banks; jank, Halk Bank and Turkiye
isi.

1

00500000001563


From: rritterhoffi@worldbank.
Sent: Thu , February 3, 3001 5:21PM
To: Marshall, Mills@do treas.gov; Elizabeth.K.Stewart@vo.treas.gov; PBRUKOFF @imf.org
Cc: Maureen.Grewe@ido.treas gov; Luyen.Tran@do.treas.gov
Subject: Turkey Energy Letter
Sates Foe inte

{(b)(5)]

(See attached file: Turkey Energy Letter 012501 rev.doc)

00500000001808


Stewart, Elizabeth K.

Fi J rritterhofi@worldbank. |
Sent: Wedni ' February 14, 2001 3:21PM
be ten Te reas gov: M Gi treas.gov: Gene.Clapp@do.trea:
z |. Tran@do.treas.gov; Maureen. . rh : .treas.gov;
gluabeth ami reo teas. gov. Sry MeBonaldeade tress gov ee riwartbank.org;
Subject: RE: FYt Embassy sation request on Turkey Electricity Law and IFI conditionality
{(0)(5)}

Marshall .Millegdo.treas.gov on 02/14/2001 03:07:53 PM

To: Luyen.Tran@Do.Treas.Gov, Maureen.GrewegDo.Treas.Gov,
Gene.Clapp@Do.Treas.Gov, Elizabeth.K.Stewart@Do.Treas.Gov,
Larry.Mcdonald@Do.Treas.Gov, RritterhoffeWorldbank.Org

ce: Pbhrukoff¢@Imf .Org

Subject: RE: FYI: Embassy action request on Turkey Electricity Law and IFI

conditionality
{(b)(5)]
>
> Tran, Luyen
> Wednesday, February 14, 2001 2:51 PM
> Mills, Marshall; Grewe, Maureen; Clapp, Gene; Stewart, Blizabeth K.;
> McDonald, Larry; "Robin Ritterhof£ (E-mail)*
> Ce: ‘Patti Brukoff (E-mail)'
> Subject: RE: FYI: Bmbassy action request on Turkey #lectricity Law
> and IFI conditionality
>

((b)(5)}

00500000001513


From: ‘ex mail." Jmazur@worldbank.org”

To: ex, mail(*Elzabeth.K,Stewart”),Dom13, DOPO&{Stewart...
Date: 4/13/00 11:55am,

Subject: Letter Clearance

——__—_——— Forwarded by Janice L. Mazur/PersonWorld Bank EDs on
04/13/2000 11:55 AM

Janet. Thomas@mail.doc.gov on 04/10/2000 04:12:50 PM
To: Janice. Mazur@Mail.Doc.Gov
co:

‘Subject: Letter Clearance

for your comments, thanks, please call me.

Forwarded by Janet Thomas/HO/USFCS/USDOC on 04/10/2000

04:13 PM

“Michae! Beeman” <Michael_Beeman@ita.doc.gov> on 04/10/2000 04:02:33 PM
Compose Only:

To: Janet Thomas/HO/USFCS/USDOC@USDOC

oo:
‘Subject: Letter Clearance

Janet,

| have pasted the fetter text below. | think that the text is mostly
self-explanatory.

Jobn Breidenstine, the SCO in Ankara Turkey, already has given his clearance
FYI Please let me know if you have any comments.

Michael B.
13492

Mer, Edwin M. Truman

Assistant Secretary for International Affairs
Department of the Treasury

Washington, D.C. 20220

Dear Assistant Secretary Truman:

[(b)(5)}

Tortey Poe

00500000001707


From: Lemay, Joanne

Sent: Thursday, February 08, 2001 4:25 PM
To: Clapp, Gene

Ce: Coffman, Phyllis

Subject: Turkey Energy Issues Mtg

Janice Bay from the State Dept is coming over to meet with Steve Radelet tomorrow (Fri, Feb 9)
at 2:00pm to discuss Turkey Energy Issues. You are welcomed to attend. It will be held in rm
3222 MT.

00500000001913


Stewart, Elizabeth K.

From: Mills, Marshall

Sent: February 14, 2001 5:26 PM

To: Grewe, Maureen; Clapp, Gene; Stewart, Elzabeth K.; Tran, Luyen; McDonald,
Lary Rab Moin Ritterhoff (E-mail); Radeiet, Steve; Stedman, Louel

Subject: FYE cE vane acto easton ghey ene Lau
Importance: High
{(b)(5)]

We need to decide what if anything to communciate to the Embassy.

Marshall
Original Message--——
From: Mills, Marshall
Sent: Wednesday, February 14, 2001 2:48 PM
Tor Grewe, Maureen; Clapp, Gene; Stewart, Elizabeth K.; Tran, Luyen; McDonald, Larry; Robin Ritterhoff (E-mail)
Cc: Patt) Brukoff (E-mail)
Subject: YI; Embassy action request on Turkey Glectricty Law and IFI conditionality
Importance: High

We have received an action request for today from the Embassy to confirm the following with the World Bank and IMF

((b)(5)]

ls information, without pre-judging any decision on responding to the action request.

i
:
:
iF

00500000001499


{(b)(5)}

00500000001705


“Mary Beasiey”,
"Robin. Epstein®, “Sheila Herrling’),
Subject: Turkey ERL -- responses to USDOC questions -Reply

{(b)(5)]

“Maureen.Grewe”, “Meg.Lundsager”,

Thanks. Malachy.
Malachy,

((b)(5)]

We continue to hope for US Treasury assistance in arranging a meeting
to discuss some of these issues in more detail.

Thanks,
Michael B.
>>> ex.mail."ritterhoff@worldbank org” 05/02/00 04:57pm >>>

((b)(5)]

00500000001774


Stewart, Elizabeth K.

From: rritterhoff@worldbank.
Te Marshal \Mneaio tres foot cabot K Stewart@do. PBRUKOFF @imf.

‘0: j .treas.gov; . .treas. gov, jim.
Ce: Maureen.Grewe@¢o.treas.gov; Luyen, Tran@do.treas.gov a os
Subject: Turkey Energy Letter

{()(5)]

(See attached file: Turkey Energy Letter 012501 rev.doc)

00500000001519


Please let us
know if you have further questions.

Regards, Jim Parks

[(6)(5)]

nnn Forwarded by Sally M, Zeijlon/Person World Bank on
04/29/2000 03:29 AM ————_________—_

Robin Ruth Ritterhotf
04/26/2000 06:01 PM
Extn: 68049 EDS01

To: Sally M. Zeijfon
cc! Kathleen B. Mccollom, James Parks

Subject; Turkey ERL
Sally—

{(b)(5)]

00500000001748


Turkey [(b)(5)]
Question: [(b)(5)]
Answer: — [(b)(5)]

Drafted by Marshall Mills, OASLA/ISM, 622-9398, May 3, 2001

00500000002352


[(b)(5)]

‘Thanks again for your interest in Turkey's energy reform program.

00500000001776


[(6)(5)]

Sincerely, Sincerely, Sincerely,

Al Larson Timothy J. Hauser John Taylor

Under Secretary Deputy Under Secretary Under Secretary

Department of Department of Department of
State Commerce Treasury

00500000001954


ACTION

MEMORANDUM FOR UNDER SECRETARY TAYLOR

FROM: Steve Radelet, Deputy Assistant Secretary
(Africa, the Middle East and South Asia)

SUBJECT: Response Letter to GE and AES on Turkey Energy Projects
[©)(5)]

Agree/Sign Disagree Let’s Discuss
ATTACHMENTS:
Tab A; Letter to GE and AES
Tab B: Incoming Correspondence
Tab C: “Guidance on U.S. Energy Projects in Turkey,” Cable State 098348

00500000001951


Tor Mills, Marshall; Clapp, Gene; Stewart, Elizabeth K.

Cer Grewe, Maureen; McDonakd, Larry

‘Subject: RE: URGENT: Conference Call on Turkey Energy Issues and IFIs at 10:15-10:30
Importance: High

[(b)(5)]

Who is taking the call? Steve? Mark? The Secretary?

Original Message——-

From: Mils, Marshall

Sent: Friday, February 09, 2001 9:57 AM

To: Stadinen, Lovesens Capps Gere; Stoner, Btabath K

Cet Grewe, Mauress

Subject: RE: URGENT: Conference Call on Turkey Energy Issues and IFIs at 10:15-10:30

Sorry to throw you in the middle of this ... [(b)(6)]

{(b)(5)}
~~ Original Message—--
From: ‘Stedman, Louelen
Sent: Friday, February 09, 2001 9:44 AM
To: Mills, Marshal; Clapp, Gene; Stewart, Elizabeth K.
Ce: Grewe, Maureen
‘Subject: RE: URGENT: Conference Caf on Turkey Energy Issues anc IFis at 10:15-10:30

Who is the conference call with???

Original Mexsage——

From: Mills, Marshall

‘Sent: Friday, February 09, 2001 9:42 AM
To: Capp, Gene; Stewart, kK
Cc: Grow, Meureary Stamen, Lovelen

Details to follow,
Should anyone from GC and/or the IMF office participate?

00500000001599


Turkey Economic Reform Loan
[(©)(5)]

00500000001704


Stewart, Elizabeth K.

From: rritterhofi@woridbank.

Sent: Monday, February 12, 2601 3:43 PM

To: Elzabeth.K Stewart@do.treas,gov; Marshall. Mills@do.treas.gov
Ce: Luyen. Tran@do.treas.gov

Subject: Turkey Letter

Turkey Sectric Power
aw Rese. The revision including Marshall's changes is attached. Could you run it by
Bill
(if there is time tonight-- otherwise I guess run it by Brian as acting) so Todd
can sign off?

Thanks-- Robin

(See attached file: Turkey Electric Power Law Response.doc)

0500000001591


‘Turkey Energy Law Response = Suggested edits from ISM

Dear Mr. Briggs:

{(b)(5)]

Sincerely,

Todd Crawford

00500000001820


wargoe peeuy PAs eve THe Vary enews ——~-

Page 2 of 2

www.ibsresearch.com

((b){5)]

..Jnews_display.asp?upsale id=253&archive=&iday=29&imonth=01 &iyear=2001 §ion=I 1/29/2001
00500000001783


Stewart, Elizabeth K.

From:

Sent: Wednenday. Fabry 14,2001 5:34 Pe

et Luyen TranGide Paes gov, Elzabots ik Stowe teas pe
uyen. lo. Ov; treas,

Subject: Graft e-mall 9 gv

importance: High

per steve's request, here's a draft- sorry for delay, a little bosnia vote
contretemps intervened.
Ajay--

[()(5)]

Regards,
Robin

00500000001500


{(b)(5)]

We left Asther dlecussion cl proposed actions for he 2 pra meating between Steve Radelet and Janice Bay of
Please call me if you have further questions.

=-Onginal Message——
‘Stedman, Loueiien
Friday, February 09, 2001 10:24 AM

i

Tot Mills, Marshall; Capo, Gene; Stewart, Elizabeth K.
Cc: Grewe, Maureen; McDonald, Larry
Subject: RE: URGENT: Olaln Instructors for Conference Call on Turkey Energy Issues and IFls at 10:30
Importance: High
[(b)(5)]

——Originat Message-——-

From: Mills, Marshal

Sent: Friday, February 09, 2001 10:20 AM

To: janine Ansys ‘Stewart, Ehzabeth K,

Ce: 3 McDonald, Larry

‘Subject: tae Dialin Instructions far Conference Call on Turkey Energy Issues and IFis at 10:30

Importance: High

Call 647-0817, code 7890.

{(b)(5)}

The conference callis at the staf level, prior to @ DAS level meeting this aftemioon at 2 pm. 1am covering

Marshall
~~--Original Message——
From: ‘Stedman, Louelien
‘Sent: Friday, February 09, 2001 10:12 AM

2

00500000001598


Please let us
know if you have further questions.

Regards, Jim Parks

[(b)(5)]

———------— Forwarded by Sally M. Zeijlon/Person/World Bank on
(04/29/2000 03:28 AM ———————-

Robin Ruth Ritterhoff
04/28/2000 06:01 PM
Extn: 88049 —DS01

To: Sally M, Zeijlon
cc: Kathleen 8, Mccollom, James Parks
Subject: Turkey ERL

Ray

((b)(5)]

00500000001777


Turkey Energy Law Response
Dear Mr. Briggs:

((b)(5)}

Sincerely,

Todd Crawford

00500000001603


— —
From: Mills, Marshall

Sent: Wednesday, February 14, 2001 6:13 PM

To: ‘rritterhoffi nk.org’, Grewe, Maureen; Mills, Marshall
Ce: Tran, Luyen; Stewart, Elizabeth K.

Subject: RE: draft e-mail

My suggestions are indicated below in CAPS.

Language in CAPS and in [ ] with ?? are just sugegstions of tone.

Ajay--

{(b)(5)]

Regards,

00500000001824


From: mritterhof@woridbar

Sent: Friday, January 26; 20 "y00) 10:55 AM

To: Gene.Clapp@vdo.treas.gov

Ce: ink.org; Luyen. Tran@odo.treas.gov; Gene. Clapp @do treas gov;

PERUROPr ene org; Marshall.Mi .treas.gov; Maureen.Grewe@do.treas.gov;
Louetien.Stedman@do.treas, gov; tcrawford@worldbank.org;
Elizabeth. K Stewart@do.treas.gov

Subject: RE: FW: Turkish Energy Sector Meeting

{((b)(5)]

Gene.Clapp@do.treas.gov on 01/26/2001 10:37:44 AM

To: Rritterhoff@Worldbank.Org, Luyen.Tran@Do, Treas.Gov

cc: Gene.Clapp@Do.Treas.Gov, Pbrukoff@Imf.Org, Marshall.Mills@Do.Treas.Gov,
Maureen.Grewe@Do.Treas.Gov, Louellen.Stedman@Do.Treas.Gov,
Tcrawford@Worldbank.Org, Elizabeth.K.Stewart@Do.Treas.Gov

Subject: RE: FW: Turkish Energy Sector Meeting

[(b)(5)}

-----Original Message-----

From: rritterhoff@worldbank.org [mailto:rritterhoff@worldbank.org)
Sent: Friday, January 26, 2001 10:20 AM

To: Luyen.Tran@do.treas.gov

Cc: Gene.Clapp@do.treas.gov; PBRUKOFF@imf.org;

Marshall. Mills@do.treas.gov; Maureen,Grewe@do.treas.gov;
Louellen.Stedman@do.treas.gov; tcrawford@worldbank.org

1

00500000001802


eek a eee =sew

vargerua se.4e wna ave que vary
. www.ibsresearch.com Page 1 of 2

Power Janus \t co |

Projects to Receive Treasury Guarantees Finally Listed

{((b)(5)}

../news display asp?upsale_id=253&archive=d&iday=29&imonth=0 1 &iyear=2001 §ion=1/29/2001
00500000001782


Office of Maltfiaterai Development Banks OASIA/IDB
1500 Pemnsyivania Avenoe, NW.
: Room sre

ix # 202-622-2505)

Ea a ee


{(0)(5)]

-Original Message-----

Prom: rritterhoff@worldbank.org [mailto:rritterhof f@worldbank.org)
Sent: Friday, January 26, 2001 10:20 AM

To: Luyen. Tran@do.treas.gov

Cc: Gene.Clappedo.treas.gov; PBRUKOFF@imf.org;
Marshall.Millsedo.treas.gov; Maureen.Greweado.treas.gov;
Louellen.Stedman@do.treas.gov; tcrawford@worldbank.org

Subject: Re: FW: Turkish Energy Sector Meeting

Luyen-- As I told Gene, I would be happy to join Bill's 3PM internal meeting
ti

°
tell what I know on the Bank eide-- I have talked a lot with Bank staff on
this.

{(b)(5)]

Luyen. Tran@do.treas.gov on 01/26/2001 08:43:23 AM

Tor RritterhoffeWorldbank.Org
cc:

Subject: FW: Turkish Energy Sector Meeting

fyi.

> weeen Original Message~-----

> Prom: Grewe, Maureen

> Sent: Friday, January 26, 2001 8:41 AM

> To: Tran, Luyen; Stedman, Louellen; Mills, Marshall
> Ce: Clapp, Gene; Radelet, Steve

> Subject: Rf: Turkish Energy Sector Meeting

{()(5)]

Marshall -- did you get a fax from Phyllis?

ve

vv

seen Original Message-~----

Prom: Tran, Luyen

Sent: Priday, January 26, 2001 8:23 AM

To: Stedman, Louellen; Grewe, Maureen; Mills, Marshall
Subject: FW: Turkish Energy Sector Meeting

vvvvw

2

00500000001559


{(b)(5)]

00500000001916


Ax cable f Fr kann for fle

14 Feb ol

00500000001568


To: Rritterhoff@Worldbank.Org
cc:

Subject: FW: Turkish Energy Sector Meeting

fyi.

> -----Original Message---—-

> From: Grewe, Maureen

> Sent: Friday, January 26, 2001 8:41 AM

>To: Tran, Luyen; Stedman, Louellen; Mills, Marshall
>Cc: Clapp, Gene; Radelet, Steve

> Subject: RE: Turkish Energy Sector Meeting

>

{()(5)]

> Marshall -- did you get a fax from Phyllis?

>

> -----Original Message-----

> From: Tran, Luyen

> Sent: Friday, January 26, 2001 8:28 AM

>To: Stedman, Louellen; Grewe, Maureen; Mills, Marshall
> Subject: FW: Turkish Energy Sector Meeting

>

((b)(5)]

>

> maureen & marshall -- probably would make sense to have one of you there.

> please call gene to see what has transpired on this. thanks.
>

> ----Original Message-----

> From: Coffman, Phyllis

> Sent: Thursday, January 25, 2001 6:09 PM

>To: Clapp, Gene; Stewart, Elizabeth K.; Tran, Luyen
> Subject: Turkish Energy Sector Meeting

>

> Friday, January 26 at 3:00 pm in Bill's office.

00500000001801


Stewart, Elizabeth K.

From: Tran, Luyen

Sent: Thu . February 15, 2001 9:48 AM

To: Robin Ri (E-mail); Clapp, Gene; Stewart, Elizabeth K.
Subject: readout of conference call with wb on turkey energy

steve radelet asked me to write up my notes from this conference call. would appreciate if you all
could edit/comment or add to the following. thanks.

readout of january 29, 2001 conference call on turkey energy sector
wb: john parks, turkey energy team

used; robin ritterhoff

treasury: gene clapp, elizabeth stewart, luyen tran

[(©)(5)]

00500000001505


dll care rene

NEWS

1,300 kilometres, Phosphate and bauxite > First-<quarter earings at Saudi Basic
supplies would then be wansported to (Corporation (Sabic) have risen TUNISIA
Dammam using the existing ‘mupipiteme
wack. The Riyadh-jeddab connection would net up per cent to ,
mastly comprise goods also SR 924 million ($246.3 mallion). Sable agent works over 38 Kisco of
allowing a further link to Dammam. The managing director Mohamed al-Mady toad. The Bank is
cost of the two peoiects is estimated at attributed the rise im earnings to the jiskcan Development Bs
$3,900 million-4,900 million. demand-driven increase in merrationsl Py tland 5G er iad
‘The sudy suggests the Jeddah-Makicah- Prices. A company starement | & vay Te Direcorate
Medina passenger link, geared towards added that higher production and sales and Bridges ‘Ale has
transporting pilgrims during the Hajj season, | continuing efforts to achieve cost reductions Frbbeeneal epryry reposted
is not financially viable. also contributed to the increased profits, ma prs cf million fom
‘Total production in the quarter rose 10 per million) for 1999, a 59 per cent drop
cent to 6.6 maltion tonnes and sales were up | the year's figure of TD 22.5 million
Two bid for Shuaiba 14 per cee over last year, First-quarter ($169 miBion). Revenues were also down, by
phase 2 expansion income was up 104 per cent over the 2 per cent, at TD 595.3 million ($446 4 milion).
‘SR 837 million ($232.1 million) eamed im the
Two gam vamkey bids have been fourth quaner of 1999. TURKEY
Sapensioa of te Shuaite plant 2 Res tncome for the have cris to
power ‘32 March at Al-Rajhi Banking &
planned by Seudl Consolidated Investment Corporation rose 17 per cent | Fourth
Company for the Western Kegion (EWR). | to sx 4224 million ($112.6 million). to be
Sources close to the project say Italy's Castomer were up 14.9 per cent to reauctioned

Enelpower and the European ABB Alstom
Power have submited offers for supply and
installation of the two 3$0.MW steam turbine
‘units,

provide the generating unis. The pricing of
the offers has not been divulged,
ep btde-omm operate (BOO) bids forthe
Stuaiba expansion are due by a mid-May
deadkine (MEED 14:4:00).

Siemens in line for
GIS substation

Germany's Siemens has been awarded a
Jener of intent for construction of a 580-KV
gas insulated switchgear (GIS) substation at
Haka for Saudi Consolidated Electric

‘The other bidders were the local Al-Panar

‘Taif lnvestment & Tourism Company t
install @ cable car link between Al-Hada and
Karr in the Makkah region. The cable car
Project will sretch 4.2 kilometres, with a
capecty of 1,000 passengers an hour. The
Project is inended as pant of a number of
new tourist attractions planned for the area,
including parks and restaurants.

SR 33,750 million ($9,000 million). Loans
and advances increased by 16.4 per cent to
SR 39/860 snillion ($10,629 million).

> Piest-quamer net peoths at Saudi Hollandi
Bank rose 31 Per cent to SK 87.7 million
($23.4 milion) airspace growth in foe

and commission income. The bank says
sightly increzsed loan demand and good
treasury results were other facors behind the
improved pesformance, Loans and advances
were SR 9,500 million ($2,533 million) in the
three months to 31 March, a rise of 6 per cont
ce the same period in 1999, Income from
investment securities was down slightly to
‘SR 88 million ($23.5 million),

SYRIA
Investors cheer easing of
foreign exchange rules

Business leaders have welcomed President
Asad’s decision to abolish a decree chat
| provided for stuf jail sentences for

of foreign exchange
restrictions. ft was announced on 23 April
that Asad has scrapped Deoree 24, which
was introduced in the mid-1980s 10 curbs
black market currency dealing. The decree

Asad has replaced the previous decree
with a new set of rules, under which the

Jongest sentence for any kind of currency

system and the creation of a stock market.

‘The Transport & Comeninications Ministry is sex
to peauction a fourth global system for mobdes
(GSM) Licence on 2 May through open bidding.
‘However, analysts say the $2525 million base
PACE may prove to be too high to justify
‘tvestment by the shoriiaed companies.

‘The ministry announced on 24 Aped that &
would five four consortia 10 bid for the
licence on the same terms as the last tender.
‘That tender collapsed on 17 April after the four
bidding groups failed to provide the base price
a which a did GSM lence was sold wa
joint venture of Turkiye Is Bankasi (isbank)
and Telecom Malia the previous week (MEED
214-00). It is undessiood that the decision to
remuction the licence was in response to a
request by one of the shortlisted groups.

Barloers sty Istenik’s high bid of
$2,525 million was part of a strategy aimed at

pricing

market (MEED 28400). They add thas it
would make no financial sense to purchase a
fourth licence at the same price. “It would be
bad news for the entire cellular market, diuing
vahse for the existing players and also the new
SS says Maluk Akdogan of Salemen

‘Senich Barney.

‘The four consortia invited to bid in the
auction are:
‘J Saband Holding Dogan Holding
Dogus Holding, all jocal, with Telefonica of
Spain

Isdemir up for sale

‘The Privatisation Administration (O18) has
invited bids by 30 June for a 100 per cert stake

S MAY 2000 MEED 31

00500000001741


Lotus Notes decided not to send it to you, despite my having addressed it to
you. Here it is again.

Regards,
Robin

—— Forwarded by Robin Ruth Ritterhoff/Person/World Bank on
02/14/2001 06:34 PM —------——-----+-------ene=

Robin Ruth Ritterhoff
02/14/2001 06:34 PM
Extn: 88049 EDSO1

To:
cc: Kathleen B. Mccollom, Sally M. Zeijlon, Ayse Ronay

Subject: Turkey Issues
Ajay--

[()(5)]

00500000001833


Stewart, Elizabeth K.

From:
Sent: Friday, Febru Py Febuary 09, 2001 10:32. AM
bn ee Nanton Louelien; Clapp, Gene: Stewart, Elizabeth K.
c: rewe,
Subject: Re Neen): iF Dialin Instructions for Conference Call on Turkey Energy Issues and IFis at
[(b)(5)]
~-—-Original Message-—

From: Mills, Marshall

Sent: Friciay, February 09, 2001 10:26 AM

Tor Stedman, Lovelien; Clapp, Gene; Qewart, Elizabeth K.

Cer Grewe, Maureen;

McDonald, Larry
‘Subject: RE: URGENT: Dial-in Instructions for Conference Call on Turkey Energy Issues and IFIs at 10;30

Atleast Steve, maybe Bill.

{(b)(5)]
Marshall

From: Stedman, Louellen

Sent: Friday, February 09, 2001 10:24 AM

To: Mits, Marshall; Clapp, Gene; Stewart, Elizabeth K.

cc Grewe, Maureen; McDonald, Larry

‘Subject: RE: URGENT: Dialin Instructions for Conference Cat on Turkey Energy Issues and IFIs at 10:30
Importance: = High

{(0)(5)]

--—Original Message—--
Mills, Marshall
Friday, February 09, 2001 10:20 AM
To: Stedman, Loustien; Capp, Gene; Stewart, Blizabeth K.
Cc: Grewe, Maureen; McDonald, Larry
‘Subject: URGENT: Dial-in Instructions for Conference Call on Turkey Energy Issues and IFIs at 10:30
Importance: High

Call 647-0817, code 7890.

”

[(b)(5)}

‘The conference call is at the staff level, prior to a DAS level meeting this aftemoon at 2 pm. | am covering for

ISM.
Marshall
From: Stadman, Lovelien
Sent: Friday, February 09, 2001 10:11 AM
To: Mils, Marshall; Capp, Gene; Stewart, Elizabeth K.
Ce: Grewe, Maureen; McDonaki, Larry

00500000001600


Stewart, Elizabeth K.

From: Mills, Marshall

Sent: Thursday, February 15,2007 11:34 AM
To: Stewart, Elizabeth

Subject: RE: Turkey energy - your question

how about [(b)(5)]

——Original Message—

From: ‘Stewart, Gizabeth K.

Sent: ‘Thursday, February 15, 2001 11:16 AM

To: Radelet, Steve

Ce: Mils, Marshall; Grewe, Maureen; Clapp, Gene; Tran, Luyen
‘Subject: Turkey energy - your question

Steve,

From my notes of the 1-29-01 conference call with Jim Parks - [(b)(5)]

00500000001510


Stewart, Elizabeth K.

From: Coffman, Phytlis

Sent: Runes, January 25, 2001 6:09 PM

To: Clepp, ne; Stewart, Elizabeth K.; Tran, Luyen
Subject: T Energy Sector Meeting

Friday, January 26 at 3:00 pm in Bas office.

00500000001540


[(b)(5))

Who is taking the call? Steve? Mark? The Secretary?

oe Marsha

From:

Sent: Fy, tan 0,201 957

To: ‘Stedman, Louellen; Capp, Gene; Stewart, Bizabeth K.

Ce: Grewe, Maureen

‘Subject: RE: URGENT: Conference Call on Turkey Energy Issues and IFts at 10:15-10;30

Sorry to throw you in the middle of this... [(b)(6)]

{(b)(5)]

——Onginal Message
From: Stedman, Lovellen
Sent: Friday, February 09, 2001 9:44 AM
To: Mills, Marshall; Capp, Gene; Stewart, Bizabeth K
Cc Grewe, Maureen
‘Subject: RE: URGENT: Conference Call on Turkey Energy Issues and IFis at 10:15-10:20
‘Who Is the conference call with???
From: Mills, Marshall
Sent: Hoag Febery 08, 2001 9:42 AM
To: Gene; Stewart, Elizabeth K.
Ce: Gree, Mowery Stedman, Loutlen
Subject: URGENT: Conference Call on Turkey Energy Issues and IFis st 10:15-10:30
Importance: High
Details to follow.

Should anyone from GC and/or the IMF office participate?

00500000001595


FINANCIAL TIMES MONDAY FEBRUARY 5 2001

AMCARAREFOR ATES RAMEE ELT BE RANT DSP GOVERMENT FAIRE TO MET ECERETY oesOUME OL

Turkey set to win IMF loan approval

latest loan tranche after criss at the end of last year gone further than previous
accepting Amkara's defence has done little. as one ana- administrations in curing
of force majeure, lyst put it, “to change the chromic double-digit infla:
Parliament went isto Lastminute way Turkey tom, which in January fell
feces after a deputy died of addresses probiems”. to its lowest level in 14
@ heart attack ina fistfight © After panic hit its finan years Figures om

among parliamentarians Gal markets at the end of showed yearon-year whole-
January 9. The beawt November. Turkey was sale and consumer inflation
Out during a debate om gow. spared # dissstrous devalua- at 283 per cent and 369 per
ernment proposals to speed tion ~ nd the consequent cent respectively.

up partiament's procedures collapse of ¢comomic reforms © Even before the dramatic
for adopting legislation, resting on & fixedexchange events in parliament, there
Bus the delay in taking ral- rate regime ~ by the IMF's were fears that at
atively reform stupa promise of emergency assiv- tiom into the awarding of
may confirm suspicions tance on December 5. energy contracts might
among some investors that The most stable Turkish delay energy sector reform
even a dramatic financial government in decade has Approval of the law tn iiber-

&%

0500000001912


‘Subject: RE: URGENT: Conference Call on Turkey Energy tssues and IFis at 10:15-10;30
Importance: High

[(b)(5))

Who is taking the call? Steve? Mark? The Secretary?

-—Original Message=---

From: Mills, Marshall

Sent: Friday, February 09, 2001 9:57 AM

Tos Stedman, Louelien; Capp, Gene; Stewart, Elizabeth K.

cc Grewe, Maureen

Subject: RE: URGENT: Conference Call on Turkey Energy Issues and IFis at 10:15-10;30

Sorry to throw you in the middie of this ...[(b)(6)]

{(b)(5)]

--—-Onginal Message---~

From: ‘Stedman, Louellen

Sent: Friday, February 09, 2001 9:44 AM

To: Mills, Marshall; Clapp, Gene; Stewart, Elizabeth K.

Ce Grewe, Maureen

Subject: RE: URGENT: Conference Call on Turkey Energy Issues and IFIs at 10:25-20:30

Who is the conference call with???

-—Original Message-—

From: Mills, Marshall

Sent: Friday, February 09, 2001 9:42 AM

To: Clapp, Gene; Stewart, Elizabeth K.

Cc: Grewe, Maureen; Stedman, Lovellen

Subject: URGENT: Conference Cail on Turkey Energy Issues and IFIs at 10:15-10:30

Importance: High

Details to follow.
Should anyone from GC and/or the IMF office participate?

00500000001523


MAY-G4-2203 17:34 1% 202 622 @637 POL

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US. TREASURY DEPAK | ume OT) td
OFFICE OF MIDDLE EAST AND SO: aie ; °

Room SuIMT “| | pee” ,

FAX: 622-0037 jor 4 ‘ 3 ‘
F syed oe eat BE
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pan mick Brewer = gem 3277

To: ‘Fob Conk. 2-122%

FROM: Maureen Grewe (622-5504)
Malachy Nugent (622-9208)

Adnan Kifayat (622-0907)
Cameron Haight (622-2576)

1 of | Sagets)
MESSAGE Bole ~ pene tin cro t Aroff.s
oe FS (Grane Gaza oe, pt
L

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Ws ens Bahonctod Brn Phew, Aowet .

—)

7

00500000001753


JA+25-2881 16:19 US TREAS INTL AFFAIRS 202 622 2536 P.a2
_ sm *

Thomas C. Griggs
Vice Provident
Government Affins

Enron Corp.
1775 Tye Street, NW, Surty 500
Weshingian, DC 20006

22 January 2001 202-466-9169

Fex 212-618-3172
The Honorable William Schuerch fontrepeteemce
Deputy Assistant Secretary

For International Development,
_ Debt and Environmental Policy
U.S. Department of Treasury
1500 Pennsytvania Ave., N.W.
Washington, 0.C. 20220

Hon. W. Schuerch,

\.am writing on behalf of the American Turkish Council and its Energy Committee to
request your support in a matter that is of great importance to American developers of
power projects in Turkey and to the Turkish economy. In brief, we ask that you exercise
the influence of the United States in the World Bank to moderate the Bank's insistence
that Turkish Treasury guarantees for 29 projects be conditioned on entry into service of
the power plants by the end of 2002. These 29 projects already have been approved
and, in many cases, substantial sums of money have been expended in refiance on the
availability of Turkish Treasury guarantees that are now threatened by the World Bank's
new policy. Moreover, termination of these projects will engender an unacceptable risk
of power shortfalls in Turkey that will threaten economic growth, as well as consumer
well being,

The proposed, fast track energy legislation for deregulation of the energy sector in
Turkey is currently being debated in the Turkish Parliament and is axpacted to came up
for a vote within a week. One provision of this proposed legislation concerns a ceadline
of 2002 during which 29 approved build-operate-transfer (BOT) projects would have to
teach commercial operation in order to qualify for Turkish Treasury guarantees. World
Bank and the IMF are advocates of such a deadline, questioning the need for additional
BOT projects claiming that Turkey will have an energy surplus in 2003. Two of these
BOT projects are being co-developed by American companies.

The Energy Committee of the American Turkish Council has long advocated
appropriate deregulation of the Turkish energy sector and we support the goal of
eliminating the need for Turkish Treasury Guarantees. However, the ATC recognizes
that a delicate balance must be struck between eliminating Treasury Guarantees and
continuing to provide the Turkish energy sector with much needed investment. In this
instance the ATC strongly believes that the arbitrary 2002 deadline is bad policy for
American developers and for the Government of Turkey for the following reasons:

Endless possibilities.”

00500000001692


Stewart, Elizabeth K.

From: Radelet, Steve

Sent: Thursday, Fel 15, 2001 11:29 AM
To: Stewart, Elizabeth

Subject: RE: Turkey energy - your question

Thanks. This is helpful.

Original Message-~---

From: Stewart, Elizabeth K.

Sent: ‘Thursday, February 15, 2001 11:16 AM

To: Radelet, Reve

ca Mills, Marshal; Grewe, Maureen; Capp, Gene; Tran, Luyen
Subject: Turkey energy - your question

Steve,
From my notes of the 1-29-01 conference call with Jim Parks — [(b)(5)]

00500000001506


N/R

h:\ccon\Dervis investment issues.doc
Drafted:ECON:SOudkirk/MSpimak
FCS:JBreidenstine

00500000001555


{(b)(6)]

((b)(5)]
----Onginal Message——
From: ‘Stedman, Louetlen
Sent: Friday, February 09, 2001 9:44 AM
To: Mills, Marshall; Capp, Gene; Stewart, Eleabeth K.
Ce: Grewe, Maureen
Subject: RE: URGENT: Conference Call on Turkey Energy Issues and IFis at 10;25-10:30
Who is the conference call with???
Original Message——
From: Mils, Marshall
Sent: Friday, February 09, 2001 9:42 AM
To: Capp, Gene; Stewart, Elizabeth K.
Cc: Grewe, Maureen; Stedman, Louellen
Subject: URGENT: Conference Call on Turkey Energy Issues end IFis at 10:15-10:30

Importance: High

Details to follow,
Should anyone from GC and/or the IMF office participate?

00500000001818


From: Tran, L

Sent: Friday, 26, 2001 2:24 PM

To: Stewart, Elizabeth K.

Subject: FW: Draft Turkey letter - pls clear by tomorrow noon

‘Turtry Enengy Lermar
012801 0...

oe Original Message----~-

From; rritterhoffeworldbank.org [(mailto:rritterhofféworldbank.org])
Sent: Thursday, January 25, 2001 2:36 PM

To: Marshall.Mille@do.treas.gov; PBRUKOFF@imf£.org;

Gene. Clapp@do.treas.gov

Cc: Maureen.Grewe@do.treas.gov; Luyen.Tran@do,treas.gov

Subject: Draft Turkey letter - pl# clear by tomorrow noon

Attached is the draft responding to the American-Turkish Council's letter
(already faxed to Marehall & Patty, now faxing to Gene). Please comment/clear
by noon tomorrow.

(See attached file: Turkey Energy Letter 012501.doc)

00500000001689


ON SBOR = 2e a8 FAA 206 402 OLIU BNERGE Piso =

‘ www.ibsresearch.com Page 1 of 2
Power Saran 0, 0001
{(©)(5)]

../news_display asp ?upsale_id=253&archive=&iday=29&imonth=0 1 &iycar=2001 §ion=11/29/2001
00500000001635


——Original Message——

From: Newhouse, Stephen P [mailto;NewhouseSP@state.gov]
Sent Friday, May 18, 2001 12:14 PM

To: ‘marshall. milis@do.treas.gov'

‘Subject: Turkey questions

Marshalt:

((b)(5)]

Stephen Newhouse

Office of Development Finance
U.S, Department of State
(202) 647-8988

00500000001937


Thomas C. Briggs

U ive psn Vice President
‘ Government Affaes
oy, ‘2 LAA SK ae Enron
JLo Corp.
Lp iaete 1775 Eye Street, NW, Swite 800
Washington, DC 20006
22 January 2001 _ 212-466-9169
Fax 202-828-3372
The Honorable William Schuerch fens briggeBenon cos

Deputy Assistant Secretary
For Intemational Development,
Debt and Environmental Policy
U.S. Department of Treasury
1500 Pennsylvania Ave., N.W.
Washington, D.C. 20220

Hon. W, Schuerch,

| am writing on behalf of the American Turkish Council and its Energy Committee to
request your support in a matter that is of great importance to American developers of
power Projects in Turkey and to the Turkish economy. in bret, we ask that you exercise

and, in many cases, substantial sums of money have been expended lance on the

availabilty of Turkish Treasury guarantees that are now threatened by the World Bank's

Moreover, termination of these projects will engender an unacceptable risk
of power shortfalls in Turkey that will threaten economic growth, as well as consumer
well being.

The proposed, fast track energy legislation for deregulation of the energy sector in
Turkey is currently being debated in the Turkish Parliament and is expected to come up
for a vote within a week. One provision of this proposed iegislation concerns a deadline
of 2002 during which 29 approved build-operate-transfer (BOT) projects would have to
reach commercial operation in order to qualify for Turkish Treasury guarantees. World
Bank and the IMF are advocates of such a deadline, questioning the need for additional

BOT projects claiming that Turkey will have an su ‘wo of these
BOT projects are Ing rican companies.

The Energy Committee of the American Turkish Council has long advocated
appropriate deregulation of the Turkish energy sector and we support the goal of
eliminating the need for Turkish Treasury Guarantees. However, the ATC recognizes
‘that a delicate balance must be struck belween eliminating Treasury Guarantees and
continuing to provide the Turkish energy sector with much needed investment. In this
instance the ATC strongly believes that the arbitrary 2002 deadline is bad policy for
American developers and for the Government of Turkey for the following reasons:

Endless possibilities.”

00800000000024


Mills, Marshall

Se — $< $$. $$$ $$
From: Spirnak, Madelyn [SpimakM@state.gov)

Sent: Friday, January 26, 2001 10:43 AM

To: Mills, Marshall

Subject: Background on the energy issue

Background:

{(b)(5))

The classification of this e-mail is: UNCLASSIFIED

00500000001638


MAR 22 2002 10:15 FR ENRON TO 6220037 P.O3-84

Other Costs

Financing Costs 100% Nil 2.3MM Nil
Taxation (incl. Div, Withholding Taxes) Nil 100% Nil 3,6MM
Net KDV Nil 100% Nil 3.4MM

The TL portion of Revenues is duc and receivable on 19th of cach month with the TL energy
payments being due and payable on the 20th. TL exposure is, therefore, limited to 1 day.

To the extent that TEAS do not pay us we are no due to pay BOTAS. We are nearly certain
the BOTAS pays the Russians for gas in LISD, as this is the normal practice throughout
Southeastern Europe.

To minimize TL exposure on delayed receipts from TEAS we immediately convert all TL
received into USD. We then repurchase TL on the day we actually pay BOTAS.

Please note, however, that whilst the payments from TEAS to Trakys are split into a USD
portion and a TL portion, and we in turn pay BOTAS in TL, the contracts and the tariff are
denominated 100% in USD. Thus to the extent that the TL devalues, the burden on TEAS
effectively increases because thcir purchase price from Trakya is a USD price. All other things
being equal, if the TL devalues by 30% and there is no increase in the sales prices to end-users to
compensate for this, TEAS' financial position with respect to Trakya also declines by 30%.
Recently tariff prices in Turkey have been increased 10% but devaluation is something like 32%,
Asa result the TEAS financial position has suffered a meltdown (remember TEAS couldn't mect
all its obligations before devaluation). Our estimate of the total amount overdue to the 4 IPP's
(BOTs) is now of the order of $450-470MM.

We also understand that it is the intent of the Turkish Treasury to make tariff and other changes
necessary to keep TEAS neutral with respect to the devaluation, However, we have yet to see
this happen.

As of this moming (Thursday 22nd March) TEAS and the Fund are currently overdue for the
following amounts:

TEAS Receivables

November invoice $23.8MM
December invoice 539.4MM
January invoice $28.6MM
February invoice $41.5MM
F/X Difference $2.8MM
Delay Interest $.4.6MM

Total Receivable from TEAS $140.7MM

00800000000012


((b(5)]

00500000001922


From: Mills, Marshall

Sent: Friday, January 28, 2001 11:03AM

To: dbank.org’ Clapp Gene

Ce: Tron Luyen; Clapp, pet ’ PBRU KOFF im, org, Milts,, Marshall Grewe, Maureen; Stedman,
Louelien; ; terawford@worldbank. org, Stewart, Elizabeth K.

‘Subject: RE: FW: Turkish Energy Sector Meeting

I just talked to US Embassy Ankara.

They have been very active. I have a lot of information to share -- I think it would be
most efficient to wait until 3 pm.

Marshall

cree Original Message-----

From: rritterhoffeworldbank. erg [mailto:rritterhofféworldbank.org)
Sent: Priday, January 26, 2001 10:55 AM

To: Gene.Clappédo.treas.gov

Ce: rritterhoffaworldbank.org; Luyen.Tran@do.treas.gov;
Gene.Clappédo.treas.gov; PSRUKOPP@imf.org; Marshall .Mille@do.treas.gov;
Maureen.Greweédo.treas.gov; Louellen, Stedmanado.treas.gov;
tcrawtord@worldbank.org; Blizabeth.K.Stewartedo.treas.gov

Subject: RE: FW: Turkish Energy Sector Meeting

{(b)(5)]

Gene .Clapp@do.treas.gov on 01/26/2001 10:37:44 AM

To: Rritterhoff@Worldbank.Org, Luyen.Tran@Do.Treas.Gov

ee: Gene.Clapp@Do.Treas.Gov, Pbrukoff@imf.Org, Marshall .Mills@Do.Treas.Gov,
Maureen.Greweabo.Treas.Gov, Louellen.Stedman¢Do.Treas.Gov,
Terawford@Worldbank.Org, Elizabeth.K.Stewart@Do.Treas.Gov

Subject: RE: FW: Turkish Energy Sector Meeting

Who is dealing with this at state? [(b)(5)]
could you do that Marshall?

Patti, I have a call into you re atendance at today's meeting. It would be
very helpful for you to attend. Could you confirm?

{(b)(5)]

‘Original Message-
From: rritterhoff@worldbank.org (mailto: rritterhoffeworldbank.org]
Sent: Priday, January 26, 2001 10:20 AM

To: Luyen.Tran@do.treas.gov

Ce: Gene.Clay -treas.gov; PBRUKOFFwimf.org;

Marshall .Millsede.treas.gov; Maureen.GreweSdo.treas.gov;
Louellen.Stedmanédo.treas.gov; tcrawford@worldbank.org

Subject: Re: FW: Turkish Bnergy Sector Meeting

00500000001493


Stewart, Elizabeth K.

aL —
From: Mills, Marshall

Sent: Friday, February 09, 2001 1:06 OM

To: Stewart, Elizabeth K; Stedman, len; Clapp, Gene: Tra

Ce: grewe, Maureen; McDonald, onaid, Lamy "Robin rhoft (email: pa Brukoff (E-mail)’; Paulson,
Subject: RE. Readout of Today's Staff Level Conference Call on Turkey Energy Issues and IFis

Bill was invited but cannot come.
Gene is participating.

Original Message---~
From: Stewart, Bizabeth K.
Sent: Friday, February 09, 2001 1:05 PM

To:
ca

Mils, Marshall; Stedman, Loueilen; Clapp, Gene; Tran, Luyen
Larry; "Robin Ritterhort (E-mail)’; Patt) Brukoff (E-mail)’; Paulson, Sara

Grewe, Maureen; McDonald,
Subject: RE: Readout of Today's Staff Level Conference Call on Turkey Energy Issues and IFis

Adding Sara to this e-mail chain.
Maureen/Marshall; Think that Bill Schuerch should be looped into the invitation to the 2pm meeting.

o--Original Message-——-
From: Mills, Marshall
Sent: Friday, February 09, 2001 12:44 PM
ba Stedman, Loueflen; Clapp, Gene; Stewart, Slzabeth K.; Tran, Luyen
Grewe, Maureen; McDonaki, Larry; Robin Ritterott (Era); Pas Brod? (eral); Mis, Marshall
Subject: Readout of Toom’s Stil Level Canference Call on Turkey Energy Issues Issuss end IFis
Importance: High

((b)(5)}

00500000001593


((b)(5)}

Wie left further discussion of proposed actions for the 2 pm meeting between Steve Radelet and Janice
y of State/EB.

Please call me if you have further questions.

=~ Onrigina Message—---
From: ‘Stedman, Louellen
Sent: Friday, February 09, 2001 10:24 AM
To: Mills, Marshall; Clapp, Gene; Stewert, Bizabeth K.
ca Grewe, Maureen; McDonaki, Larry
‘Subject: RE: URGENT: Disi-in Instructions for Conference Call on Turkey Energy Issues and IFIs at 10-30
Importance: High
{(b)(5)]

—Criginal Message—

From: Mills, Marshall

Sent: Friday, February 09, 2001 10:20 AM

To: ‘Stroman, Louelien; Capp, Gene; Stewart, Elizabeth K.

Crewe, Maureen; macdonald, Larry

Dial-in Instructions for Conference Call on Turkey Energy Issues and IFis at 10:30

it

Ce:
Subject:
Importance:

00500000001528


TURKEY —INFRAS

FINANCIAL TIMES WEDNESDAY APRIL 5 2000

3 and the

38 which surround it
he government is being f

wsked to provide export
Tedit guarantees of some
‘220m to the chief construc
fom contractor, Balfour
leatty.
Objectors claim the
chense will force the resec-
lement of at least 15,000
wiinly Kurdish people, Good
‘te historic town of Hasan
eyf, as well as scores of
maller villages, amd cause
‘ater shortages and possible
ollution downstream tn
ria and Iraq
Its defenders maintain
Jat it will bring prosperity
ad economic development
1 the region, where Kurdish
ititants belonging to the

iclng the
urkish military 15 years.

‘imarily a hydro-electric
heme will not, by defint

thon, cause any water short
ages downstream.
Although the Misu project

‘Tigris is intended for irriga-
lon as well, for some 120,000
bectares. Indeed, while some
6® per cont of the hydro-

power to be produced by the
whole GAP project from
both rivers is already avail
able, only 11 per cant of the
irrigation schemes have
bean completed. A further 10
per cent is under comstruc:
ton, according to Dr Olcay
Unver, president of the GAP

Use of water from the two
rivers for massive irrigation
schemes is perhaps the most
controversial aspect for
many environmentalists.
Excessive salination, and
lack of evacuation channels

J for water used in surface
ferigation, are two looming

Problems. But whether the
irrigation plans would hit
supplies to Syria and Iraq is
still @ moot point.

gaps hinder dam project

climate. But there doesn't
have to be @ water war in
the Middle East. Turkey used
the least amount of water (of
the riparian states) from the
‘Tigris and Ruphrates.”

He argued that the Tigris,
for example, bas highly
erratic water flow, varying
by a factor of up to 40
between dry and wet sea-
sons. Annual water flow in
dry years can be only one-
fifth of that in years of
hoavy rainfall By building
the Tisu dam, the water Now
can be regulated, water
stored during the rainy sea
son, and the risk of flooding
decreased, he says.

He admitted, however,
that no progress hed been
made towards a collabora-

laid down by the Turkish
constitution. Moreover,
resettlement is voluntary
rather than compulsory, as
in China, be says. Those
affected had a choice of
where they went to, and
were given a Bouse, a plot
and rehabélitatian.

Quite how much the Kurd.
ish population is involved im
genuine consultation about
‘the projects is less clear, As
far as the Misa dam is con
cemed. much of the work on
resettlement alternatives is
yet to be dome Proper com-
pensation and resettlement
ig one of the assurances the
British government is soek-
ing from the Turkish govern-
ment,

Indeed. it ts uncleer how

00500000001739


we U> IRE EL Are eu2 622 2536 P.G2

Thomas C. Briggs
Voce Provident

Goormment Afro
% ‘e Enron Corp,
% 1975 Kye Street. NW, Suite SOU
Washingter, DC 20006
202-466-9169
22 January 2001 che un
The Honorable William Schuerch .
Deputy Assistant Secretary
For tional Development,
Debt and Environmental Policy

U.S, Department of Treasury
1500 Pennsylvania Ave., N.W.
Washington, D.C. 20220

Hon. W. Schuerch,

| am writing on behalf of the American Turkish Council and its Energy Committee to
request your support in a matter that is of great impartance to American developers of
power projects in Turkay and to the Turkish economy. In brief, we ask that you exercise
the influence of the United States in the World Bank to moderate the Bank's insistence
that Turkish Treasury guarantees for 29 projects be conditioned on entry into service of
the power plants by the end of 2002, These 29 projects already have been approved
and, in many cases, substantial sums of money have been expended in reliance on the
availability of Turkish Treasury guarantees that are now threatened by the World Bank's
new policy. Moreover, termination of these projects will engender an unacceptable risk
of power shortfalls in Turkey that will threaten economic growth, as well as consumer
well being.

The proposed, fast track energy legislation for deregulation of the energy sector in
Turkey is currently being debated in the Turkish Parliament and is expected to come up
for a vote within a week. One provision of this proposed legislation concems a deadline
of 2002 during which 29 approved build-operate-transfer (BOT) projects would have to
reach commercial operation in order to quality for Turkish Treasury guarantees. World
Bank and the IMF are advocates of such a deadline, questioning the need for additional
BOT projects claiming that Turkey will have an energy surplus in 2003. Two of these
BOT projects are being co-developed by American companies.

The Energy Committee of the American Turkish Council has long advocated
appropriate deregulation of the Turkish energy sector and we support the goal of
climinating the need for Turkish Treasury Guarantees. Howaver, the ATC recognizes
that a delicate balance must be struck between eliminating Treasury Guarantees and
continuing to provide the Turkish energy sector with much neaded investment. In this
instance the ATC strongly believes that the arbitrary 2002 deadline is bad policy for
American developers and for the Government of Turkey for the following reasons:

Endless possibilities.TM

00500000001684


« Because power plants typically require a minimum twenty-four month
construction pericd, imposition of a 2002 deadline will, in effect, terminate these
projects on the day the law is passed.

« Export credit agencies, including US Ex-Im, and commercial lenders have
indicated that they will not provide financing to projects that do not have Treasury
guarantees or in the event the Treasury guarantee is contingent upon meeting a
2002 commercial operation deadline.

¢ The Ministry of Energy and Natural Resources and the State Planning
Organization of Turkey are increasingly concerned that the continuing delays in

energy projects will result i rtage into 2003.

« The imposition of a deadline for these approved BOT projects will be an
imprudent action during a period of transition in the energy sector that will erode
confidence among potential foreign investors in Turkey. According to the UN,
Turkey already ranks a lowly 54th in the world in attracting foreign direct
investment. Turkey was able to attract only $785M of investment capital in 1999,
trailing, among others, Malta, the Dominican Republic, Egypt and Vietnam. The
proposed provision of the new energy law that will, in effect, terminate these BOT
projects that are under contract, will be detrimental to attracting increased foreign
investment in Turkey during a period of expected slow-down in the world
economy.

A strong Turkish economy is vital to a stronger Turkey. And a stronger Turkey, a critical
ally, is in the best interest of the US. Since time ie of the essence, we will appreciate

~\\) “fabitany deadline in the proposed energy law. If the Goverment of Turkey in fact
No intention of building these 29 projects, we suggest that the parties rely instead

yew on the termination provisions of the individual commercial contracts.
Members of the ATC Energy Committee repectulyfequest a meeting} th your office

in order to discuss this matter in more detail. | will co 0 b arenge a
convenient time to meet.

Sincerely,
Phere C Eur
4
Thomas C. Briggs
Chairman
American Turkish Council Energy Committee

00800000000025


Subject: RE: URGENT: Conference Cail on Turkey Energy Issues and [FIs at 10:15-10:30
Importance: High

{(b)(5)]

Who Is taking the call? Steve? Mark? The Secretary?

From: Mis,

Sent: Friday, February 09, 2001 9:57 AM

To: ‘Stedman, Louelien; Capp, Gene; Stewart, Elzabeth K,

Ce: ‘Grewe, Maureen

Subject: RE: URGENT: Conference Call on Turkey Energy Issues and IFIs at 10:15-10:30

Sorry to throw you in the middle of this ... [(6)(6)]

{(6)(5)]
——~Onginal Message—
From: ‘Stedman, Lovetien
‘Sent: Friday, February 09, 2001 9:44 AM
To: Mils, Marshall; Capp, Gene; Stewart, Elzabeth K.
Cc: Grewe, Maureen
‘Subject: RE: URGENT; Conference Cail on Turkey Energy Issues and IFIs at 10:15-10:30
Who is the conference call with???
———-Onginal Message--—-
From: Mills, Marshall
Sent: Friday, February 05, 2001 9:42 AM
To: Clapp, Gene; Stewart, Elizabeth K,
Cer Grewe, Maureen; Stedman, Louellen

‘Subject: URGENT: Conference Call on Turkey Energy Issues anc IFIs at 10:15-10-30
Importance: High

Details to follow.
Should anyone from GC and/or the IMF office participate?

00500000001601


Stewart, Elizabeth K.
"”s|S —_—_——

— —— —— ——

Sent Misy. F 09, 2001 7:22 PM
To: tte hoti@wordbank ora Mills, Marshall; Stewart, Elizabeth K; PBRUKOFF @imt.org
4 Grewe, Maureen; Tran, Luyen
Subject: RE: Turkey Energy Letter
‘Turkey Gnergy Center
(012801 1...

ISM suggested edits are attached.

[(©)(5)]

Marshall

seen Original Message-~---~

Prom: rritterhoffeworldbank.org (mailto: rritterhoffeworldbank.org]
Sent: Thursday, Pebruary 08, 2001 5:21 PM

To: Marshall.Millse@do.treas.gov; EBlizabeth.K,Stewartede.treas.gov;
PSRUKOFFeime.org

Cc: Maureen,Grewe@do.treas.gov; Luyen. Tranedo,treas.gov

Subject: Turkey Energy Letter

{(b)(5)) Could you let me know your
thoughts by 10AM tomorrow on the attached draft? Elizabeth, I'11 put in any
changes and then forward the revision by you to run past Bill tomorrow.

{See attached file: Turkey Energy Letter 012501 rev.doc)

00500000001531