The right energy in the right place

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4 Major Operational and Financial Highlights 6 2013: A year of major achievements for Zorlu Enerji 8 Chairman’s Message

12 Board of Directors

14 General Manager’s Message 20 Senior Management 22 About Zorlu Enerji

24 Zorlu Energy Group’s fields of activity

26 Zorlu Enerji’s Installed Capacity and Ongoing/Planned Investments in Turkey

29 Zorlu Enerji’s International Operations 30 Zorlu Group

34 The Energy Sector in Turkey in 2013 37 Strengths of Zorlu Enerji

38 Zorlu Enerji in 2013

38 Zorlu Enerji’s Investments & Electricity Generation and Sales

39 Zorlu Enerji’s domestic and renewable energy investments

42 Zorlu Enerji’s International Investments

Intr

oduction

Review of the Y

ear 2013

With our strategy, which can be summarized as 'The right

energy in the right place’, we are focusing on domestic and

renewable resources and efficient use of resources with a high

awareness of the need for a sustainable future and supply

security.

45%

the share of domestic and

renewable resources in our

installed capacity

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46 Sustainability

46 Zorlu Enerji and Sustainability 48 Human Resources

50 Occupational Health and Safety 51 The Environment

52 Corporate Social Responsibility

54 Risk Management

56 Internal Audit Department and its Operations 57 Board of Directors’ Resolution

58 Corporate Governance Principles Compliance Report 74 Dividend Distribution Proposal

75 Conclusion of the Affiliation Report 77 Independent Auditor’s Report 152 Investor Information

Sustainability Financial Inf

ormation and Reports

We trust in Turkey’s energy. We continuously move further

in our aim of utilizing our country’s resources and increasing

our renewable energy investments, particularly in geothermal

energy.

877 MW

Our total installed capacity

2,283.6

million kWh

Our electricity generation in 2013

Intr

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We add more to Turkey’s

energy with our strengths in

production and competition,

as well as our innovative

and high-quality solutions.

Thanks to its high-capacity production power,

well qualified human resources, balanced

portfolio, diversified resources and capabilities

to develop unique and innovative solutions,

Zorlu Energy invests in projects that support

security and the sustainability of energy supply.

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We add more to Turkey’s

energy with our strengths in

production and competition,

as well as our innovative

and high-quality solutions.

Thanks to its high-capacity production power,

well qualified human resources, balanced

portfolio, diversified resources and capabilities

to develop unique and innovative solutions,

Zorlu Energy invests in projects that support

security and the sustainability of energy supply.

Intr

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Major Operational and Financial Highlights

Zorlu Enerji continued its investments in 2013 on the back of

its funding abilities and managed to maintain its production

and sales volumes, despite the difficulties in the operating

environment.

Summary Balance Sheet*

(TL thousand) 31/12/2013 31/12/2012 Current Assets 586,365 581,471 Non-Current Assets 5,767,605 3,944,507 Total Assets 6,353,970 4,525,978 Current Liabilities 1,685,479 1,491,185 Non-Current Liabilities 3,897,566 2,843,196 Equity 770,925 191,597 Total Liabilities 6,353,970 4,525,978 Gross Debt ** 3,030,361 2,399,125 Net Debt ** 2,816,528 2,211,746

Summary Profit/Loss Table*

(TL thousand 31/12/2013 31/12/2012

Revenues 636,237 575,678

Operating Income/(Loss) (5,491) 762,389

EBITDA*** 112,884 69,709

Net Income/(Loss) for the Year**** (309,171) 598,585

Gross Profit margin 2.3% 0.8%

EBITDA Margin 17.7% 12.1%

* Based on CMB Financials

* *A long term receivable from Rosmiks BV, amounting to TL 2,360,880 (31.12.2012: TL 1,847,075) is considered in the gross debt calculation by deducting it from the total debt amount, since it was considered as a part of the financing obtained from banks and financial institutions, led by HSBC Bank PLC which is recorded as financial debt.

***Other income and expenses from operations are not included. ****Net income/(loss) attributable to equity holders of the parent.

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Generation 2013 2012 Electricity (kWh)* 2,283,593,323 2,289,334,429 Steam (tons) 675,946 604,710 Sales 2013 2012 Electricity (generation) (kWh)* 2,165,441,547 2,187,246,182 Electricity (commercial) (kWh) 1,218,571,147 1,085,982,640 Steam (tons) 675,946 604,710

Utility and Cooling Water, CO₂ (m3) 4,628,303 14,229,039 *As Rosmiks LLC, which generated and sold 718,294,536 kWh of electricity and 53,973 GKcal of heat in 2012, was transferred to Zorlu Holding on December 28, 2012, its generation and sales volume were excluded from the above figures. Additionally, Zorlu Doğal Elektrik Üretim A.Ş.’s 468,177,128 kWh of electricity sales, 14,229,039 m3 of utility and cooling water and carbon dioxide sales and 473,100,678 kWh of electricity generation in the year ending December 31, 2012 are included in the above tables as necessary amendments were made in the financial statements dated December 31, 2012 within the context of the “Recognition of Mergers of Jointly Controlled Entities” which was published in the Official Gazette on 21st July, 2013 by the Public Oversight Accounting and Auditing Standards Authority.

Share Price Summary (TL)

2013

Number of Shares 500,000,000 Number of Shares (Free Float) 159,905,814 Highest Share Price During the Year 1.68 Lowest Share Price During the Year 0.97

Year-End Price 1.04

Market Capitalization ** 520,000,000

** As of 31.12.2013

Zorlu Enerji Elektrik Üretim A.Ş. Shareholding Structure

Zorlu Holding A.Ş. 45.7%

Korteks Mensucat Sanayi ve Ticaret A.Ş. 17.5%

Publicly held 32.0%

Other 4.8%

Zorlu Enerji’s market

capitalization stood at

TL 520 million at the

end of 2013.

17.7%

EBITDA and EBITDA margin

EBITDA (TL million) EBITDA Margin (%) 2013 113 17.7% 2012 70 12.1% Intr oduction

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2013: A year of major achievements for Zorlu Enerji

Kızıldere II geothermal power plant with an installed capacity

of 80 MW, and the 56.4 MW wind farm in Pakistan were

commissioned during the year.

Commissioning of the Kızıldere II Geothermal Power Plant

The Kızıldere II Geothermal Power Plant, which is located in Sarayköy/Denizli, was brought online in two stages with a total investment of US$ 250 million. Kızıldere II is Turkey’s largest geothermal power plant and one of the world’s 10 leading geothermal power plants with an installed capacity of 80 MW.

In addition to the existing 15 MW Kızıldere I Geothermal Power Plant, which was acquired via the privatization of ADÜAŞ back in 2008, we reached a total installed capacity of 95 MW at Kızıldere, which offers some of the greatest geothermal potential in Turkey, with the completion of the Kızıldere II Geothermal Power Plant in 2013. Kızıldere power plant is a first for Turkey with its integrated use as a power plant, a greenhouse and a source of domestic heating and geothermal energy.

Pakistan Wind Farm comes on-stream The wind farm, with a capacity of 56.4 MW, was constructed in Jhimpir with a US$ 151 million investment by Zorlu Enerji Pakistan, which is 100% owned by Zorlu Enerji. The plant began commercial sales of electricity on 26th July, 2013. It is Pakistan’s first wind farm and is planned to generate 159 million kWh of electricity per year. The power plant, which is located in the Gharo – Keti – Bandar – Hyderabad wind corridor, will contribute significantly to the growth of Pakistan’s renewable capacity and the easing of the country’s increasing dependence on oil imports for electricity generation. Zorlu Enerji Pakistan has an option to increase the plant’s installed capacity up to 300 MW. The plant will provide energy to 350,000 residences over a period of 20 years. The plant was rewarded with the “The Best Renewable Energy Financing in the Middle East” award by the Project Finance magazine in 2011.

Zorlu Enerji’s Dorad Natural Gas Combined-Cycle Power Plant in Israel was connected to the transmission grid.

Works at the 840 MW capacity Dorad Natural Gas Combined-Cycle Power Plant, which is 25% owned by Zorlu Enerji, continue in the Ashkelon region of Israel. The plant was connected to the country’s national grid in July 2013 and is expected to go into commercial operation during 2014.

Zorlu Doğal applied to EMRA to construct a new geothermal power plant in Sarayköy/Denizli.

Following the company’s exploration activities in Sarayköy/Denizli, Zorlu Doğal Elektrik Üretimi A.Ş. (Zorlu Doğal), owned 100% by Zorlu Enerji, applied to the Energy Market Regulatory Authority (EMRA) for a 100 MW generation license to construct a new geothermal power plant in the region.

Nemrut Geothermal Electricity Generation A.Ş. was founded with the purpose of utilizing the geothermal resources in Bitlis and the surrounding regions in electricity generation. “Nemrut Geothermal Electricity Generation A.Ş.” was founded as a 75%/25% owned JV of Zorlu Enerji and Rarik-Turkison Enerji İnşaat Maden Proje Ltd. to utilize geothermal resources in Bitlis and the surrounding regions in energy generation. The company obtained a “Geothermal Resources and Natural Mineral Water Operating License”, valid for a period of 30 years, and a “Geothermal and Natural Resources Exploration License”, which is valid until 3rd June, 2014.

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With its first corporate bond issues, Zorlu Enerji raised funding for its investments and diversified its financing sources.

Zorlu Enerji raised a total TL 356.2 million of new funding via two separate corporate bond issues, which were privately placed to qualified investors, during 2013. The bond issues helped extend the maturity of the debt, diversify funding sources and create new funds for the upcoming investments.

Zorlu Enerji received the “Best Corporate Governance Award” by World Finance.

Zorlu Enerji received the “Best Corporate Governance Award” by World Finance, which is one of the world’s leading publications. Zorlu Enerji was selected as Turkey’s best company in corporate governance practices in the voting conducted.

Zorlu Doğal, which is 100% owned by Zorlu Enerji, received Turkey’s Climate Performance Leaders Award.

Zorlu Doğal, which transparently shares its risk management strategies on greenhouse gas emissions and climate change with the public, is the only energy company to conduct voluntary reporting and to be ranked among the top companies in the Carbon Disclosure Project. In 2013, Zorlu Doğal was ranked in group B, the second highest group in the performance rating for companies which announce their climate change strategies by using the Carbon Disclosure Project (CDP) platform. The company therefore received Turkey’s Climate Performance Leaders Award.

Zorlu Enerji received the highest score among the four energy companies which conduct CDP reporting. Zorlu Enerji received the highest score among the four energy companies which are included within the Borsa İstanbul - 100 (BIST 100) index and which conduct CDP reporting. The Company was also the first energy company to receive Turkey’s Carbon Disclosure Leaders Award in 2011.

Zorlu Enerji received the title of “National Champion” within the scope of the 2013 – 2014 European Business Awards.

With its projects in sustainability and corporate responsibility, Zorlu Enerji received the title of “National Champion” as part of the European Business Awards - which is one of the most prestigious prizes of the business world.

Under the European Business Awards, companies from various sectors which recorded important achievements in Europe are evaluated on the basis of different categories such as innovation, leadership, social responsibility, marketing, growth strategy and process management. Zorlu Enerji was one of the 40 companies which were selected as a “National Champion” from Turkey in the “Environmental and Corporate Sustainability” category.

Gökçedağ Wind Farm adds another prize to its international prize portfolio. Zorlu Enerji was rewarded for

its Gökçedağ Wind Farm with the “Sustainability Prize” by the European Bank for Reconstruction and Development (EBRD) in the “Environmental and Social Performance” category at the Sustainability Awards.

Sustainability Awards granted by the EBRD reward successful and sustainable projects in the fields of social, environmental, energy efficiency and climate.

Zorlu Enerji was ranked the third in the “Leadership” category at the European Corporate Social Responsibility Award Turkey Competition which was organized the by European Commission.

Zorlu Enerji participated in the Competition with the “Energy Drama” project which was conducted with the collaboration of TOÇEV (Tuvana Education Foundation for Children). The Company came to the forefront among the 50 companies and 62 projects in the Competition. The Energy drama project aims to educate children about the energy resources and the importance of sustainable energy through an interactive story. Turkey’s first energy education project to be conducted by an energy company reached 15,170 children through a total of 247 events organized at 60 schools over a period of 6 months. Zorlu Enerji won the MerComm Galaxy Golden Prize for the second time with its 2012 annual report.

Zorlu Enerji was rewarded with the Golden Prize for its 2012 annual report in the categories of “Energy” and “Design” at the Competition organized by Mercomm.

Zorlu Enerji prepared its 2012 annual report with the theme of “Our energy is Turkey’s energy”, emphasizing the domestic and renewable resources, from which the Company draws its strength.

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Chairman’s Message

|

Our country has significant

opportunities to become a regional power in the energy sector

with its geopolitical position and energy potential.

Zeki Zorlu

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The recovery trend in the global economy became more visible in 2013.

While the year 2013 marked the passage of 5 years since the breakout of the global crisis, the recovery in the global economy has gradually become more visible. In 2013, global growth picked up with a shift in favor of developed countries, while economic growth in developing countries started to lose momentum. US economy returned to a growth cycle while Japan started to emerge from its long lasting deflation and recession. Meanwhile, there were some signs of nascent, albeit limited, recovery from the Eurozone.

Developed markets remained strong in response to FED’s decision to taper bond purchases, in what can be considered the first step towards exiting expansionary monetary policies. On the other hand, financial volatility increased significantly in developing markets, especially in those having internal fragilities such as political instability, high inflation and current account deficit.

Turkey, which succeeded in maintaining its sustainable growth path, recorded 4% GDP growth in 2013. Although two rating agencies raised Turkey’s credit rating to investment grade, the impact of cyclical conditions on capital flows and an increasing foreign trade deficit continued to keep the current account deficit in place as the soft belly of the country. The Turkish Central Bank’s (CBT) gradually tightening monetary policy, and the high levels of interest rates together with the depreciation of TL, had negative impact on economic activity and the companies’ balance sheets.

We believe that our country, which has successfully overcome challenging macroeconomic conditions, will continue its steady growth and maintain its position in the long run as an attractive country for investments thanks to its strong characteristics, such as a young population, a large and dynamic domestic market and its strategic geographic location.

While global balances are being re-established, energy demand is steadily increasing.

In this period, which is marked by a rebalancing of the world’s balances, demand for energy and, accordingly, energy investments are steadily increasing on a global scale while there is a general shift in energy demand from the West to the East.

Developments in the world energy market have elevated our country to a geostrategic position. Turkey is expected to become one of the world’s most important energy hubs within the next five years thanks to the Trans Anatolian Natural Gas Pipeline project, strengthening of the relations with Iraq in terms of gas and oil trade and improvement of economic relations with Israel, which has recently discovered vast quantities of off shore gas reserves. As the Nabucco project has been dropped, the Trans Anatolian Natural Gas Pipeline, the Trans Adriatic Natural Gas Pipeline and the projects to transport Israeli and Cypriot gas to Europe via Turkey will introduce new resources to the market apart from the Russian gas and enhance Turkey’s power in the region.

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Zorlu Enerji, which has been carrying out projects both in

Turkey and abroad, completed the first private sector energy

investment in Pakistan and constructed Pakistan’s first wind

farm, which began commercial operations in 2013.

Facilitating private investments is one of the most important steps in reducing dependence on foreign resources.

Our country has important opportunities to become a regional power in the energy sector by virtue of its geopolitical position and its energy potential. The greatest macroeconomic threat that our sector faces in this process is our high dependence on foreign resources for energy production. In 2013, natural gas had a 44% share in electricity generation while coal and hydro each had a 25% share and wind 3%. Approximately 98% of the country’s natural gas and 92% of oil needs are imported. As clearly indicated by these figures, in order to lower our dependence on foreign resources we should diversify our energy sources and complete the pending legislation and regulations in the sector as soon as possible. Turkey had achieved significant progress in the area of regulations and resource diversification in 2013. The Energy Market Regulatory Authority collected the applications for the country’s first solar power licenses in June. The applications from various market players including our Company had reached 8,900 MW for the total 600 MW licenses to be tendered.

Another important development in 2013 was the reduction in the eligible consumer limit to 5,000 kWh. The limit was further lowered to 4,500 kWh at the beginning of 2014, in line with EMRA’s decision. Reducing this limit can be seen as an indicator that the electricity market in Turkey will become more competitive in the coming period.

On the other hand, steps taken towards establishing an Energy Exchange represented a positive development towards the ongoing liberalization of the Turkish electricity market.

The Natural Gas Market Law will complement the regulations related to the electricity market and the Energy Exchange. Within this context, the pending new Natural Gas Market Law is expected to be supportive for the electricity market.

These developments are expected to pave the way for the formation of a market structure where pricing will be cost based with greater transparency, predictability and equality together with the elimination of cross subsidies and where private sector will assume a more active role.

Kızıldere II

We added Kızıldere II, which

is the biggest geothermal

power plant in Turkey and

one of the leading in the

world, to our portfolio.

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We put our stamp on leading projects in the domestic market and abroad.

We crowned 2013 with successes which were worthy of our Group’s 60th

anniversary.

With our new investment at Kızıldere, we took a major step forward in geothermal energy, which we see as a strategic growth area for our Company. The Kızıldere II Geothermal Power Plant, which is Turkey’s largest and one of the world’s leading geothermal power plants, was added to our portfolio during 2013. We continue to look for further investment opportunities in this field.

Zorlu Enerji which is committed to undertaking leading projects both in Turkey and abroad, has completed Pakistan’s first private sector energy investment in 2013 by constructing the country’s first wind farm. The Dorad Natural Gas Combined-Cycle Power Plant in Israel, in which we have a 25% stake, was connected to the national grid during 2013. In addition to this plant, which we plan to bring online in 2014, we have two other ongoing projects in Israel. We expect to become one of Israel’s leading private sector electricity producers once these projects are completed.

In line with our growth strategy, we will continue to invest in new geothermal, hydroelectric, and wind power projects in order to increase the share of renewables in our generation portfolio, which currently comprise 45% of our installed capacity.

For a sustainable energy future, we will continue to invest in environmentally friendly projects which utilize domestic and renewable resources.

As Zorlu Enerji, we aim to contribute to the sustainability of both our industry and our world via our corporate social responsibility projects. In line with this understanding, we determined environment and education as our fields of corporate responsibility. Accordingly, we try to design our projects in a manner to ensure that they will contribute to the local people’s social and economic lives in the regions where we have operations.

Zorlu Enerji, which has adopted sustainability as a business approach, has become one of the pioneering and important players in the sector with its strong corporate and financial structure. Our Company will continue to further contribute to the sustainable development of the Turkish economy by investing in domestic and renewable resources, as a responsive, responsible and pioneering company. We trust in Turkey’s energy and we work hard to provide sustainable energy. I would like to take this opportunity to thank all of our employees for their efforts and our shareholders and stakeholders for their support.

Zeki Zorlu

Chairman

We crowned 2013 with

successes which were

worthy of our Group’s 60

th

anniversary.

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Board of Directors

Zeki Zorlu Chairman

(1939 - Denizli) Zeki Zorlu began his professional career in a family owned textiles company in Babadağ, Denizli. Opened his first textiles store in Trabzon, Zeki Zorlu established Korteks Mensucat Sanayi ve Ticaret A.Ş. in 1976. In addition to its textiles sector investments, Zorlu Group entered the energy sector in 1993; subsequently, the electronics and white goods sector with Vestel, which the Group acquired in 1994; and the real estate sector in 2006. Today, Zorlu Group has 25,000 employees and 60 companies under its roof. Mr. Zorlu serves as the Co-Chairman of the Board of Directors at Zorlu Holding as well as the Chairman of the Group companies operating in the textiles and energy sectors.

Ali Akın TARI Vice Chairman

(1943 - Koruköy) Ali Akın Tarı graduated from Istanbul Law Faculty before starting his career as a Tax Inspector in 1972 at the Ministry of Finance, where he went on to serve as Chief Tax Inspector, Vice-President of the Tax Inspectors Board and Group Head of the Istanbul Tax Inspectors Board. He was appointed as a Board Member of the Banking Regulation and Supervision Agency in 2001 and also elected as a Board Member of the Saving Deposits Insurance Fund in the same year. He left the Banking Regulation and Supervision Agency when his period of duty expired in 2004, and was appointed as a Consultant for the Ministry of Finance. Mr. Tarı became a member of the Board of Directors and the Audit Committee of Dilerbank in 2008 and has continued to serve as a member of the Board of Directors of Dilerbank since 2011. Mr. Tarı, who also holds the titles of Certified Public Accountant and Independent Auditor, serves as the Vice Chairman of the Board of Directors of Zorlu Enerji Elektrik Üretim A.Ş., in addition to his positions as a Board Member at Vestel Elektronik and Vestel Beyaz Eşya.

Olgun Zorlu Board Member (1965 - Trabzon) After

completing his higher education in the United Kingdom, Olgun Zorlu began his professional career in 1986, gaining management experience in the textiles companies of the Zorlu Group. In 1998, he began serving as Board Member at Zorlu Holding. In addition to his current responsibilities as Board Member at Zorlu Enerji Elektrik Üretim A.Ş., Mr. Zorlu also serves as Board Member at Zorlu Holding and its subsidiaries.

Selen Zorlu Melik Board Member

(1975 - Trabzon) Selen Zorlu Melik graduated from Uludağ University, Faculty of Economics and Administrative Sciences, Department of Business Administration. She began her professional career at Denizbank in 1998. Following her internship at Denizbank Bursa Branch, she joined the Management Trainee Program at the same bank in 1999. After working in a number of positions at Denizbank headquarters, Mrs. Zorlu Melik attended a Marketing Certificate Program at the University of California, Berkeley (USA) in 2001. Subsequently, she started to work at Korteks Yarn Plant in 2002, and became a Board Member at the same Company in 2004. She has been serving as Vice President at Zorlu Energy Group, Board Member at Zorlu Enerji Elektrik Üretim A.Ş., and also as Board Member at several Zorlu Group companies since 2005. As of April 2012, Mrs. Zorlu Melik acts as Deputy President of Zorlu Energy Group.

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Bekir Cem KÖKSAL Board Member

(1967 - Ankara) Bekir Cem Köksal graduated from the Department of Mechanical Engineering at Boğaziçi University in 1988, and obtained a master’s degree from Bilkent University in 1990. He subsequently worked in the banking industry between 1990 and 2001. In 1997, he was appointed as the Assistant General Manager at Denizbank, and in 2002 he joined Vestel as Chief Financial Officer. Mr. Köksal currently serves as an Executive Board Member in charge of Finance at Vestel and also serves as the Board Member at Zorlu Enerji Elektrik Üretim A.Ş..

Hacı Ahmet KILIÇOĞLU Board Member

(1956 - Giresun) Hacı Ahmet Kılıçoğlu graduated with a Bachelor’s degree and Master’s degree in Economics from the University of Essex. He started his professional career in 1979 at the Ministry of Industry and Technology. In 1980 he became an Assistant Specialist at Türkiye İş Bankası, and after working in the private sector for a couple of years, Mr. Kılıçoğlu assumed administrative positions at the United Nations Development Program (UNDP) and the F-16 project. He then took office at Türk Eximbank where he worked in various positions. He later served as the CEO of the bank and as a Board Member between 1998 and 2010. He has been serving as a Board Member at the Turkish Banks Association for 12 years and was also elected as the President of the World EximBanks Union (The Berne Union). He also served as Consultant to the President at the Islamic Development Bank and Vice Chairman at Denizbank. Having been appointed as Board Member at Zorlu Enerji Elektrik Üretim A.Ş. in 2013, Mr. Kılıçoğlu also serves as Board Member at Vestel Elektronik, Vestel Beyaz Eşya and Doğan Yayın Holding in addition to his Vice Presidency position at the Turkish Education Association.

Burak İ. Okay Board Member

(1967 - Ankara) Burak İ. Okay graduated from the Faculty of Law at Ankara University in 1990. After completing an International Law Certificate Program in New York, he embarked on his professional career at Türkiye İş Bankası, Department of Legal Consultancy. He later worked at Garanti Bankası, MNG Bank and Nortel Networks Netaş, respectively, before joining Bener Law Firm as an executive. Mr. Okay joined Zorlu Group in 2006 and played an active role in the structuring of the legal department that serves all Group companies. He continues to work as the Legal Coordinator for Zorlu Group and has been a Board Member at Zorlu Enerji Elektrik Üretim A.Ş. since 2007.

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General Manager’s Message

|

Turkish energy sector is

focused on meeting energy demand, reducing dependence

on foreign sources and diversification and efficient use of

resources.

İbrahim Sinan Ak General Manager

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One of the significant causes of the current account deficit in Turkey is our dependence on imported resources in energy production.

The change in FED’s monetary policy in May 2013 triggered capital outflows from the developing countries, which led to a spike in interest rates and steep declines in stock prices and national currencies. This switched the spotlight to Turkey’s current account deficit. According to analyses conducted by the Economist Magazine and JP Morgan, Turkey has one of the world’s largest current account deficits and external financing needs when compared to its national income and international reserves. This mainly stems from Turkey’s high energy import bill. Turkey’s high dependence on imported resources for energy production highlights the need to invest in domestic and renewable energy sources.

In order to meet the increasing energy demand, private sector’s role and renewable energy investments need to increase.

In parallel to Turkey’s economic development, electricity demand has increased at a CAGR of 7% over the last 30 years. As such, the priority for the Turkish energy sector, which had an installed capacity of 64,044 MW as of the end of 2013, has been to

meet the energy demand while at the same time reducing dependence on energy imports, diversifying its energy resources and using energy more efficiently. Accordingly, Turkey has to take the necessary measures as soon as possible and continue with new investments in the energy sector. Although a target of 100,000 MW of installed capacity has been set for 2023, the current market conditions are not conducive for the private sector to undertake the required investments. In order to pave the way for private sector investments, the state’s involvement in the sector should be gradually reduced, necessary regulations be put in place and remaining privatizations be completed. Figures set out in the 2014 Investment Program, prepared by the Ministry of Development, also support our views. According to the program, resources set aside by the state for energy sector investments will be cut by 20% in 2014 compared to the previous year. Parallel to this, the state’s share in the energy sector is expected to drop further. In the meantime, a foreseeable free market structure and a competitive market environment should be established if private investments in the sector are to gain speed.

The Energy Exchange, which is in the process of being established, will represent an important step in the sector’s liberalization process. The Energy Exchange will facilitate new investments in the sector thanks to the establishment of a more predictable, transparent and efficient pricing mechanism. The Energy Exchange will also help the financing of the total US$ 120-130 billion investments, which are required by the sector until 2023. As a reflection of these positive developments, we had quite an active year for energy privatizations in 2013. The privatization of the three thermal power plants, out of a total of 46 plants, 28 being hydro and 18 thermal, owned by the Turkish Electricity Generation Company (EÜAŞ) and included in the privatization portfolio of 16,000 MW, have been finalized during 2013. The tenders for the remaining generation assets are planned to be completed by 2016. On the distribution side, with the transfer of the remaining 8 distribution regions to the private sector during 2013 all the 21 distribution regions have been completely privatized.

With the establishment of a fully liberal energy market in Turkey, private sector investments will gain further pace.

The Energy Exchange (EPİAŞ),

which is currently at the

establishment stage, will

represent an important step in

the liberalization process.

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We completed 2013 successfully, a year in which Zorlu Group

celebrated its 60

th

anniversary and Zorlu Energy Group its 20

th

anniversary, thanks to our investments and projects.

Our sustainability approach leads our investments.

In order to ensure sustainable economic development, secure and sustainable energy supply should be pursued with an approach that safeguards environmental and cultural values. At this point, Turkey has also started to shift its focus to domestic and renewable energy resources in line with the global trend. The “Electricity Energy Market and Supply Security Strategy Document”, published by the State Planning Organization, states that the primary objective in the sector is to increase the share of the domestic and renewable energy resources to at least 30% by 2023. This aim is of considerable importance in leading the sector.

As an important player in the energy sector, we are leading our investments with an awareness of our responsibility to future generations and natural resources. Zorlu Enerji focuses on sustainability and internalizes this approach at all levels of its operations. Electricity generation from domestic and renewable energy resources, secure and reliable supply of energy, economical and balanced use of natural resources and energy efficiency are the main pillars of our operations. As a result of our increased endeavors

towards utilizing Turkey’s rich

renewable energy resources, the share of renewable energy reached 45% of our total installed capacity by the end of 2013.

Our newly commissioned power plants began to contribute to profitability in 2013, which marked a milestone for Zorlu Enerji in terms of investments.

We had a successful year in 2013, which was also Zorlu Group’s 60th anniversary and Zorlu Energy

Group’s 20th anniversary, thanks

to the completion of our ongoing investments and the progress we made towards new projects.

Our revenues increased by 11% from TL 576 million in 2012 to TL 636 million in 2013 while total capex reached US$ 191 million.

Following the transfer of the Russian investments to Zorlu Holding as part of the restructuring process undertaken at the end of 2012, we had attained a more profitable generation portfolio and increased the share of renewable energy further thanks to the new plants commissioned during 2013. Although the new plants contributed only partially to our financial results in 2013, the change in the portfolio mix reflected positively to our

45%

Renewable energy resources

accounted for 45% of our

installed capacity as of the end

of 2013.

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operating margins. In line with this, our EBITDA increased from TL 70 million in 2012 to TL 113 million in 2013 while EBITDA margin improved from 12.1% to 17.7%. We expect the newly commissioned power plants to contribute further to profitability in 2014, which will be their first full year of operations.

Another important achievement in 2013 was the diversification of our funding sources and raising of new funds for our investments via our first corporate bond issues. We obtained a total TL 356.2 million of new funds through these issues which were privately placed to qualified investors.

Our installed capacity reached 877 MW following the commissioning of our new power plants in 2013.

Today, we have an installed capacity of 821 MW in Turkey, comprising 7 hydroelectric power plants (in Tokat, Eskişehir, Kars, Rize, Erzurum, Tunceli, Erzincan), one wind farm (Osmaniye-Gökçedağ), two geothermal plants (Denizli-Kızıldere) and five natural gas plants in Yalova, Bursa, Lüleburgaz, Kayseri and Ankara. Including the wind farm in Pakistan, which has an installed capacity of 56.4 MW, our total installed capacity reaches 877 MW.

Geothermal energy is our strategic priority.

Geothermal resources, which we deem indispensable in our growth map, have strategic importance for Zorlu Enerji. We plan to account for half of our country’s 2023 geothermal capacity target by 2020. To this end, in addition to our existing 15 MW geothermal power plant in Kızıldere, which is Turkey’s biggest geothermal region, we constructed a second power plant with a capacity of 80 MW and brought it into operation in 2013. By commissioning Turkey’s largest geothermal power plant, we reached an installed capacity of 95 MW in geothermal energy.

The new Kızıldere II (80 MW) plant will sell its output at a guaranteed price of USc 10.5 per kWh for the next ten years within the context of YEKDEM. Sales to YEKDEM under this scope started in 2014.

We commenced activities for new geothermal investments in 2013. Within this context, we continue our drilling activities in the Manisa-Alaşehir geothermal area. We aim to bring our new plant - which will have an installed capacity of 45 MW - into operation by the end of 2015. In addition, based on the positive findings from our exploration activities in Karataş region in Sarayköy, Denizli we applied for a

100 MW license to construct a new geothermal power plant. We are also conducting exploration activities in Bitlis and its surroundings to utilize geothermic resources in the region in electricity generation.

Within the context of our hydroelectric investment strategy, we increased our focus on the Sami Soydan Hydroelectric Power Plant Project (124 MW) to be realized on the Dalaman River and the Tirebolu Hydroelectric Power Plant Project (30 MW) to be built on the Harşit River. Additionally, we stepped up our works for constructing two more wind farms in the Osmaniye region.

We made pre-license applications to EMRA for two imported coal fired power plants; in Akçakoca (Düzce) and Soma (Manisa), and two natural gas power plants; in Aliağa (İzmir) and in Kıyıköy (Kırklareli), respectively. In addition, we applied for licenses for 5 solar power plants with a total installed capacity of 80 MW.

We are also investing to become a preeminent player in the Asian and Middle Eastern energy markets.

We use all opportunities to become a regional power in Asia and the Middle East, where energy demand is rapidly increasing. In this sense, 2013 was a year of significant achievement for us.

Intr

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At Zorlu Group, we are aware of our responsibility to our world

and its resources, while carrying out our activities both in the

domestic and international markets.

Zorlu Enerji brought Pakistan’s first wind farm into operation in 2013. With 56.4 MW of installed capacity, the plant started to sell commercial electricity to the National Transmission & Dispatch Company in July 2013. We hold the option to raise the plant’s installed capacity up to 300 MW. Our plant located in Jhimpir will supply power to 350,000 residences in Pakistan for a period of 20 years. The Dorad combined-cycle natural gas power plant in Israel, with an installed capacity of 840 MW, in which we have a 25% stake, was connected to the 400 KV switching plant transmission grid in 2013, and is planned to start production at full capacity in the second quarter of 2014. In Israel, we also continue the construction of two other natural gas power plant projects, namely Ashdod and Ramat Negev, with a total capacity of 175 MW, jointly with our local partners. In addition, we continue our studies for the financing of the Solad natural gas power plant project, which will also be realized in this market.

We transparently disclose our sustainability work to the public.

At Zorlu Group, we bear in mind that we are responsible for our world and its resources and we act with this awareness both in Turkey

and abroad. In this context, we transparently disclose our greenhouse gas emission and climate change risk management strategies to the public. In 2013, our subsidiary, Zorlu Doğal participated in the Carbon Disclosure Project voluntarily, and became the only energy company to be ranked. Zorlu Doğal was included in Group B, which is ranked the second in the Performance Evaluation performed among the companies which disclosed their climate change strategies through the Carbon Disclosure Project (CDP) platform in 2013, and the company was deemed worthy of Turkey’s Climate Performance Leaders Award. We presented our sustainability work to our stakeholders in our second Sustainability Report. Our report, which conveys our sustainability performance, our perspective on energy and sustainability management and our plans and goals for the future, was approved by the Global Reporting Initiative (GRI), the corporate reporting standard for companies operating in the international arena. Our sustainability report was the first sustainability report in the energy sector and the third in Turkey to be granted the GRI A Level.

Zorlu Doğal voluntarily

participated in the Carbon

Disclosure Project and became

the only energy company to be

ranked in 2013.

Our sustainability report was

the first report to achieve the

GRI A level in the sector and

the third in Turkey.

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We teach energy resources and their efficient use to our children, to whom we will leave our future.

As a Company also working to leave energy resources for the future, we have developed projects intended for children who will use, protect and manage the resources after us. We developed a social responsibility project entitled “Our Energy is for Children” to provide them with the necessary information and education in this area. The project entitled “Our Energy is for Children” is the only energy training project to be rolled out on a national scale. We met more than 120,000 children between 6 and 12 years of age through this project. As another step in these educational activities, we organized Turkey’s first “performance on energy” in collaboration with TOÇEV. Through our interactive game, we went on tour in Turkey, visiting the 15 provinces where we undertook investments and reached more than 15,000 children. We told them about the importance and necessity of clean energy for the environment. Through the impact of our drama on energy, we earned the third prize in the “Leadership” category in the European Corporate Social Responsibility Award Turkey Competition, which was organized by the European Commission.

By reaching our children from every channel, we used social media to teach them about “energy”. While children are obtaining information by watching videos related to the work of inventors who have played important role in the field of energy, our “www.enerjisitemiz.com” website, which we have prepared for children, offers a wealth of resources for their projects and homework on the subject of energy. Besides, they are also able to learn how to use energy efficiently while playing the entertaining “Energy Hunters” game.

The other pillar of “Our Energy is for Children” project includes books about energy, which are prepared for children. Until today, children have been introduced to the “Wind power with Zorlu”, “Natural gas with Zorlu”, Geothermal power with Zorlu”, “Water energy with Zorlu” and “Carbon footprint” books, whose narration and design have proven popular with children.

We will maintain our steady growth in 2014.

After 2013, a year in which we planted the seeds of our investments, while also reaping the fruits of our labors and in which we entered a trend of operational growth, we will continue to grow steadily in 2014, as well. By focusing on domestic and

renewable resources with the purpose of contributing to Turkey’s resource diversification, we, as Zorlu Enerji, will continue to develop value-added and sustainable projects which will also contribute to employment.

I would like to express my gratitude to all of our employees, to our Board of Directors, shareholders, and all other stakeholders whose support we have always appreciated and who have greatly contributed to Zorlu Enerji in stepping forward to be the pioneer in its sector and increasing its competitive power, both in the domestic and international sphere.

İbrahim Sinan Ak

General Manager

We continue to progress

towards becoming the

pioneer in the sector in

Turkey and strengthening

our competitiveness in

international markets.

Intr

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Senior Management

İ. Sinan Ak General Manager (1971 - Ankara) İ. Sinan Ak graduated from the Department of Management Engineering at Istanbul Technical University in 1995. He began his professional career as an investment specialist at Evgin Securities. He later completed his MBA at Old Dominion University in the US. After working as a Finance Supervisor at Vestel Communications from 2000 to 2002, and as a Finance Manager at Vestel White Goods between 2002 and 2006, Mr. Ak joined Zorlu Energy Group in 2006. He served as Assistant General Manager responsible for Financial Affairs at Zorlu Enerji Elektrik Üretim A.Ş. until 2012; in January 2012, he was appointed as the General Manager of Zorlu Enerji.

Hüseyin Morkoyun Director, Financial Affairs (1962 - Istanbul) Hüseyin Morkoyun began his professional career in the Finance Department of Halis Toprak Holding. From 1987 to 1996, he assumed various positions in the Financial Affairs Department at Hürriyet Ofset Gazetecilik ve Matbaa A.Ş. and subsequently was promoted to Accounting Manager position at the same company. Mr. Morkoyun served as Finance Manager at Vestel Marketing between 1996 and 2006 and later worked as Assistant General Manager responsible for Financial Affairs at Zorlu Energy Natural Gas Group. On March 15, 2012, he was appointed as the Director of Financial Affairs at Zorlu Enerji Elektrik Üretim A.Ş.

Ali Kındap

Assistant General Manager (1968 - Çankırı) Ali Kındap graduated from the Department of Mechanical Engineering at Middle East Technical University in 1990. He began his professional career at Gama and later worked at Meteksan A.Ş. and Güriş İnşaat ve Mühendislik A.Ş. In 2008, he joined Zorlu Energy Group as Assistant General Manager of Zorlu Endüstriyel ve Enerji Tesisleri İnşaat Ticaret A.Ş. Mr. Kındap has served as Assistant General Manager responsible for Thermal Investments at Zorlu Enerji Elektrik Üretim A.Ş. since 2011.

A. Yağmur Özdemir Assistant General Manager (1978 - Ankara) A. Yağmur Özdemir graduated from Eastern Mediterranean University, Department of Economics in 2000. He then received his master’s degree in Business Law from Bilgi University, and completed the Executive MBA and British Law post graduate programs at the University of Karachi. Mr. Özdemir began his professional career as Auditor at Arthur Andersen in 2000. From 2002 to 2004, he worked at Ernst&Young, and between 2004 and 2007 he served as Financial Controller at Vestel Electronics. He joined Zorlu Enerji Elektrik Üretim A.Ş. in 2007 as Project Finance Manager; in 2012, he was promoted to Manager of Investments and Project Finance at the same company. Mr. Özdemir has been serving as Assistant General Manager responsible for Investments and Project Finance at Zorlu Enerji Elektrik Üretim A.Ş. since October 2012.

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Aydın Akat

Assistant General Manager (1970 - Erzincan) Aydın Akat received his associate degree from Middle East Technical University, Construction Department in 1990, and graduated from Istanbul University, Department of Civil Engineering in 1996. He began his professional career at Cevahirler İnşaat in 1990, and from 1996 to 2005 he worked at various projects of Tekfen İnşaat. Mr. Akat joined Zorlu Energy Group in 2005, working as Project Manager at Zorlu Endüstriyel ve Enerji Tesisleri İnşaat Ticaret A.Ş. Between 2008 and 2011, he held the position of Engineering Manager at the same company. Mr. Akat has been serving as the Assistant General Manager responsible for Projects at Zorlu Enerji Elektrik Üretim A.Ş. since October 2011.

İnanç SALMAN

Assistant General Manager (1981 - İstanbul) İnanç Salman graduated from the Faculty of Business Administration at the İstanbul Technical University and holds a PhD in Industrial Engineering from the same university. Having joined Zorlu Group in 2004, Mr. Salman was employed at the Human Resources Department of Zorlu Holding between 2004 and 2007. Joining Zorlu Energy Group in 2007, he served as Project Engineer, Organizational Development Manager and then as Director. İnanç Salman has been serving as the Assistant General Manager responsible for Energy Trade and Planning at Zorlu Energy Group since October 2013.

Öniz SAYIT

Director, Human Resources (1979 - İzmir) Öniz Sayıt graduated from the Faculty of Communication at the İstanbul University in 2001 before going on to complete a Human Resources Certificate Program at the Boğaziçi University and an MBA degree from the Yıldız Technical University. She worked at the Human Resources department at Akkök Group between 2000 and 2005, and at Tofaş Türk Otomobil Fabrikası A.Ş. from 2005 to 2007. Joining Zorlu Energy Group in 2007, Öniz Sayıt has been appointed as the Director of Human Resources at Zorlu Energy Group since October 2013.

Intr

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About Zorlu Enerji

|

Zorlu Enerji is one of the leading

companies in the sector with its well-balanced portfolio in

Turkey and abroad, its experience and strong market position.

Zorlu Enerji in Brief

Zorlu Enerji, which was founded as Zorlu Group’s first energy company in 1993, is one of the leading companies in the sector thanks to its well-balanced portfolio in Turkey and abroad, its experience and strong position in the market.

Zorlu Enerji continues its international investments to meet the increasing energy demand and to tap the growth potential in the Asian and Middle Eastern markets which are heavily in need of such investments.

Zorlu Enerji’s total installed capacity stood at 877 MW at the end of 2013. The Company’s generation portfolio is comprised of 7 hydroelectric power plants, one wind farm, two geothermal power plants and five natural gas energy plants located in Turkey, and a wind farm located in Pakistan.

The wind farm built in Pakistan’s Jhimpir region was the first wind farm in Pakistan to be constructed by foreign investment. The investment was made through Zorlu Enerji Pakistan Limited, which is a 100% owned subsidiary of Zorlu Enerji. Zorlu Enerji, which is one of the few private sector energy companies operating in Israel, has 3 ongoing power plant projects in this country. Zorlu Enerji holds a 25% share in the Dorad Natural Gas Power Plant, which is being developed in the Ashkelon region. The plant, which will have 840 MW of installed capacity, was connected to the national grid in July 2013. The Construction of the Ashdod and Ramat Negev natural gas co-generation power plants, which will have a combined capacity of 175 MW and in which Zorlu Enerji has a 42.15% stake, is still in progress.

In accordance with Zorlu Enerji’s vision of leaving behind a “sustainable” and “livable” world, domestic and renewable energy projects take a significant share in the Company’s portfolio.

Zorlu Enerji continues to contribute to our country’s resource diversification target by undertaking projects which are value accretive, support employment and contribute to sustainability.

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The Company has increased the share of renewables in its installed capacity to 45% thanks to the hydro and geothermal power plants acquired via privatization and its new renewable energy investments. The Company is committed to increasing this ratio further in the coming period.

Zorlu Enerji also focuses on utilizing our country’s rich geothermal resources and has taken an important step towards this aim via its geothermal power plant investments at Kızıldere, which have reached a total 95 MW of installed capacity.

Zorlu Enerji undertakes investments as part of its commitment to being a company which contributes and acts responsibly for the future of the world. While Zorlu Enerji differentiates itself through its supply security and sustainability approach, it complies with all the domestic and international standards in all of its investments and aims to minimize the adverse effects of its operations on human life and the environment.

All of the Company’s power plants are equipped with a water injection system which assures NOx emissions to remain below the threshold values set forth by the World Bank. Thanks to this system, waste heat is used to produce steam and this diverts the energy production process away from atmospheric heating and towards the production of environmentally friendly energy.

Zorlu Enerji, which was the first auto producer company to obtain quality certification holds the TS/EN ISO 9001-2000, OHSAS 18001 and ISO 14001 certificates and Integrated Management System. Besides, it is the only energy company to hold the ISO 14064-1 Greenhouse Gas Emission Standard certificate.

20% of Zorlu Enerji’s shares were offered to public in 2000. Today, 32% of its shares are listed on Borsa Istanbul. Zorlu Enerji was the first publicly listed energy company in Turkey and is the only listed company of the Zorlu Energy Group.

We continue to support

our country’s target to

create new sources of

renewable energy.

ISO 14064-1

The only energy company to

hold the ISO 14064-1

Greenhouse Emission

Standard certificate.

Intr

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Zorlu Energy Group’s fields of activity

|

With its

operations in different fields in the energy sector, Zorlu Energy

Group has the competence of providing an integrated service.

In addition to the electricity and steam generation and sales activities carried out by Zorlu Enerji Elektrik Üretim A.Ş., the Group’s only listed company, Zorlu Energy Group is also actively engaged in:

• Sale and trade of electricity • Turnkey construction of power

plants including the project development process

• Long term maintenance, repair and operation of power plants

• Sale and trade of natural gas thanks to its competence of providing an integrated service.

Sale and Trade of Electricity

Zorlu Elektrik Enerjisi İthalat İhracat ve Toptan Ticaret A.Ş. (Zorlu Elektrik) was founded in 2000 to sell the electricity obtained from the domestic market and free zones on a wholesale or direct basis in the domestic market or via exports to foreign countries. Its fields of activity include demand and price forecasts, production, planning, pricing, sales, risk and portfolio management and reconciliation and invoicing. Zorlu Elektrik makes direct sales to individuals and corporations that qualify as eligible consumers.

Construction of Power Plants

Through the operations of Zorlu Endüstriyel ve Enerji Tesisleri İnşaat Ticaret A.Ş. (Zorlu Endüstriyel) in Turkey and abroad, Zorlu Energy Group is engaged in the turnkey construction of power plants by providing feasibility, engineering, construction and installation services. The company undertakes the EPC (Engineering, Procurement, Construction) works of

Sale and Trade of

Electricity

Construction of Power

Plants

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Maintenance, Repair and Operation Services

Zorlu O&M Enerji Tesisleri İşletme ve Bakım Hizmetleri A.Ş. (Zorlu O&M), another Group company, provides operation and maintenance services for a variety of co-generation and combined cycle power plants as well

as for hydroelectric, wind power and geothermal power plants in Turkey and abroad. Zorlu O&M, which has undertaken several important projects abroad, also provides maintenance services for all the publicly owned LM series gas turbines in Greece. Zorlu Enerji’s power plants. Having

delivered the turnkey installation of Gökçedağ Wind Power Plant, Zorlu Endüstriyel is also the EPC contractor of the natural gas power plants in Russia and Lüleburgaz. Through Zorlu Industrial Pakistan Ltd., which is its fully owned subsidiary, Zorlu Endüstriyel completed the installation of Zorlu Enerji’s wind power plant in Jhimpir, Pakistan.

Maintenance, Repair and

Operation Services

Intr

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Zorlu Enerji’s Installed Capacity and Ongoing/

Planned Investments in Turkey

|

Having a total 877 MW

of installed capacity, Zorlu Enerji carries out its investments in

accordance with its growth plans.

Zorlu Enerji’s Installed Capacity in Turkey

Power Plant Region Type of Power Plant Electricity Generation Capacity (MW) Steam Generation Capacity (Tons/hour) Stake (%) Natural Gas

Lüleburgaz Lüleburgaz Natural Gas Co-generation Power Plant 133.19 239 100

Bursa Bursa Organized

Industrial Zone Natural Gas Combined-Cycle Power Plant 90 100

Kayseri Kayseri Organized Industrial Zone

Natural Gas Combined-Cycle Power Plant 188.5 100

Yalova Altınova Natural Gas Co-generation Power Plant 15.9 30 100

Ankara* Ankara Organized

Industrial Zone Natural Gas Combined-Cycle Power Plant 50.3 100

Van Engil** Van Diesel 15 100

Wind

Gökçedağ Osmaniye Wind 135 100

Hydroelectric

Tercan Erzincan Hydroelectric 15 100

Kuzgun Erzurum Hydroelectric 20.9 100

Ataköy Tokat Hydroelectric 5.5 100

Mercan Tunceli Hydroelectric 20.4 100

Çıldır Kars Hydroelectric 15.4 100

İkizdere Rize Hydroelectric 18.6 100

Beyköy Eskişehir Hydroelectric 16.8 100

Geothermal

Kızıldere I Kızıldere II

Denizli Geothermal 95 100

*The company applied to the Energy Markets Regulatory Authority for the termination of the plant’s generation license in 2013. ** Operations at the plant were ceased as of March 2014 due to its high production and fixed costs and the completion of its economic life.

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169 MW

The investment process for a 124 MW

hydroelectric power plant and a 45 MW

geothermal power plant is on-going

821 MW

Total installed

capacity in Turkey

Hydroelectric Geothermal Natural Gas Wind

Lüleburgaz Bursa Yalova Eskişehir Ankara Erzincan Tunceli Osmaniye Denizli Kayseri Tokat Rize Erzurum Kars Intr oduction

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110 MW

License for a 110 MW wind

farm in Sarıtepe-Demirciler

Projects in construction and financing stage

Project Region Type of Power Plant Electricity Generation

Capacity (MW) Stake (%)

Under construction

Alaşehir Manisa Geothermal 45 100

In financing stage

Sami Soydam Denizli Hydroelectric 124 100

Existing Licenses and Permits

Project Region Type of Power Plant Electricity Generation

Capacity (MW) Stake (%)

Wind Licence

Rotor II Sarıtepe-Demirciler Wind 110 100

Geothermal Exploration and Operation Licenses

Bitlis Tatvan/Bitlis Geothermal - 75

License Applications

Project Region Type of Power Plant Electricity Generation

Capacity (MW) Stake (%)

Natural Gas Power Plant

Kırklareli Kırklareli Natural Gas

Combined-Cycle Power Plant 1,100 100

Aliağa İzmir Natural Gas

Combined-Cycle Power Plant

1,080 100

Coal Power Plant

Akçakoca Düzce Imported Coal 1,220 100

Soma Manisa Imported Coal 1,220 100

Solar Power Plant

Niğde Niğde Solar 16 100

Mersin Mersin Solar 15 100

Karaman Konya Solar 18 100

Konya Konya Solar 18 100

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Zorlu Enerji’s International Operations

|

Zorlu Enerji

continues its international investments with a view to meet the

increasing energy demand and to tap the growth potential in

the Asian and Middle Eastern markets, which are in need of

such investments.

Zorlu Enerji’s Installed Capacity and Ongoing/Planned Investments Abroad

Project Region Type of Power Plant Electricity Generation

Capacity (MW) Steam Generation Capacity (Tons/ hour)

Stake (%)

In operation

Jhimpir Pakistan Wind 56.4 100

Under construction

Dorad Israel Natural Gas Combined-Cycle Power Plant 840 25

Ashdod Israel Natural Gas Co-generation Power Plant 55 40 42.15

Ramat Negev Israel Natural Gas Co-generation Power Plant 120 70 42.15

Planned

Solad Israel Natural Gas Co-generation Power Plant 100 70 42.15

1,115 MW

4 Projects in Israel planned to

have a total installed capacity

of 1,115 MW

Hydroelectric Geothermal Natural Gas Wind Pakistan

Israel

Intr

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Zorlu Group

|

Zorlu Group is focused on creating increasing

added value for Turkey through its companies, all of which are

among the leading players in their sectors.

Home Textiles

Korteks Zorluteks

• The largest integrated manufacturer and exporter of polyester yarn in Europe and the Middle East • Europe’s leading home textiles

company

Electronics, Information

Technologies and Consumer

Durables

Vestel

• One of the leading ODM suppliers of televisions, white goods and digital products for the European Market • One of the major players in the

European LCD TV market • Production facilities in Turkey and

Russia

• One of the top 3 players in the domestic TV and white goods market through its well-known Vestel brand

Energy

Zorlu Energy Group

• One of the rising players in the domestic market with 821 MW of installed capacity

• A 56.4 MW wind farm in Pakistan and ongoing investments in Israel • Competence in providing integrated

services, which comprise generation, sale and trade of electricity, “turnkey” installation of power plants,

including the project development process, long term operation, maintenance and repair of power plants and natural gas sales and trading

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Real Estate

Zorlu Real Estate Development and Investment

• Zorlu Real Estate Group was established in 2006 to develop, sell, lease and operate high quality residential and office complexes, business centers, shopping malls, hospitals, hotels or mixed-use real estate projects in prime locations, both in Turkey and abroad. • Turkey’s first mixed-use real estate

development project with five different functions, the Zorlu Center was completed at the end of 2013. The Zorlu Center includes a performing arts center, a hotel, offices, a shopping mall and residences.

• The Group’s other major ongoing investments is Levent 199, located on İstanbul’s Büyükdere Avenue. The project, which is planned entirely as offices, consists of A+ office space in a 40 storey block on a 122,000 m² construction area.

Mining

Meta Nikel Kobalt

• Aiming to become a major regional supplier of nickel and cobalt • Nickel-cobalt investment projects in

Gördes, Eskişehir and Uşak • A US$ 350 million investment is

planned in the Gördes project, which has 300,000 tonnes (contents of nickel metal) of proven reserves.

Factoring

Zorlu Factoring

• Established in 2012 to offer domestic and international factoring services. • Zorlu Factoring aims to extend its

factoring products and services throughout Turkey by focusing on medium and large size firms, as well as on leading companies with a wide supplier and dealer network.

Intr

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Utilizing Turkey's rich geothermal resources

in electricity generation represents the most

important step in our strategic growth plan.

Maintaining our

efforts to achieve

maximum efficiency

in geothermal power

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Utilizing Turkey's rich geothermal resources

in electricity generation represents the most

important step in our strategic growth plan.

Maintaining our

efforts to achieve

maximum efficiency

in geothermal power

Review of the Y ear 2013

(36)

The Energy Sector in Turkey in 2013

|

Turkey is a rich

country in terms of renewable energy resources thanks to its

geographic positioning and geopolitical structure. Utilization

of these resources to the maximum will make a significant

contribution to the country’s energy supply security.

Electricity consumption in Turkey has grown at an average 7% per year for the past 20 years driven by the country’s high rates of economic growth. However, due to the slowdown in industrial production and extraordinary weather conditions, electricity demand increased by a mere 1.3% to 245,502 GWh in 2013 as compared to 2012.

Electricity generation remained flat with 2012 in 2013. Natural gas accounted for 44% of the total electricity generated, followed by hydroelectric sources (25%), coal and lignite (25%), wind power (3%) and geothermal sources (0.5%). The remainder was generated from other resources.

Turkey’s total installed capacity increased by approximately 7,000 MW from 57,060 MW in 2012 to 64,044 MW in 2013. Of the total installed capacity, natural gas accounted for 39%, followed by hydroelectric (35%), coal & lignite (19%) and wind (4%) while other resources made up the remaining 4% as of the end of 2013. EÜAŞ and its affiliates’ share in total installed capacity fell from 43% to 37% in 2013 due to new investments undertaken by the private sector as well as the ongoing generation privatizations.

Electricity prices in the PMUM (spot market) market operated by TEİAŞ remained relatively low in the first quarter of 2013, due to the extraordinary mild winter conditions and the slowdown in electricity demand. On the other hand, electricity prices recovered in the second quarter of the year, reflecting both the improving demand and the decreasing share of hydro output in overall generation. While electricity prices increased qoq in the third quarter of 2013 due to seasonality, pressure from the new capacities coming online and the cooler than normal summer weather led electricity prices to remain lower than in the same period of the previous year. In the last quarter of 2013, electricity prices rose sharply, especially in December, owing to the natural gas supply disruptions. As a result of this price spike, annual average electricity price for 2013 slightly exceeded the average price for the previous year.

Due to its geographical position and geological structure, Turkey is a rich country in terms of renewable energy resources. Utilizing these resources to the maximum will both contribute to energy supply security and employment.

245,502 GWh

Demand for electricity

reached 245,502 GWh in

2013.

Electricity generation in 2013

Natural Gas 44%

Hydroelectric 25%

Coal and Lignite 25%

Wind 3%

Figure

Updating...

References

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