New issue is longest dated corporate bond ever issued in Turkey
The EBRD has invested 100 million Turkish lira (€24 million) in an inflation-linked bond issued by Turkey’s largest utility group Enerjisa Enerji to support the operations of three electricity distribution companies after privatisation.
The bond issuance has a total volume of 335 million Turkish lira (€80 million) and will be listed on Borsa Istanbul as part of Enerjisa Enerji's 1 billion Turkish lira bond programme for 2017-18. It is the first time that the EBRD has invested in a bond indexed to the Turkish consumer price index (CPI). Its tenor of five years is the longest to date to be issued by a corporate in Turkey.
Enerjisa Enerji is owned by Sabanci Holding, one of Turkey’s largest conglomerates, and E.ON, a leading global power company. Sabanci and E.ON together own companies operating in the electricity sector in Turkey, making them leading players in the sector, with activities diversified across the energy value chain from generation to distribution. In 2012 the EBRD supported Enerjisa Enerji with a €100 million loan for Enerjisa Enerji Üretim A.Ş. (Bares Windfarm project).
Harry Boyd-Carpenter, Director, Head of Power and Energy Utilities for the EBRD said: “We are very pleased to participate in this programme as it will support several of the goals the EBRD pursues in Turkey. CPI indexation is a first for us and still a rare instrument in the Turkish capital markets; it is particularly well suited to the funding needs of distribution companies, whose revenues are also closely linked to inflation. Innovative financing mechanisms such as these are essential to raise the capital needed to invest in new, efficient and smart energy networks as Enerjisa Enerji is doing. We are also delighted to cooperate again with Enerjisa Enerji, one of the strongest and most dynamic groups in the sector.”
Enerjisa CFO Sascha Bibert said: “It is an honour for Enerjisa to have the EBRD as our bond investor. The novel structure of this bond will serve to develop the Turkish capital markets, as well as support our growing power distribution business.”
This bond issuance is the fifth transaction by the EBRD under its 700 million TRY Corporate Bond Framework, which aims to promote longer tenors and greater transparency in the Turkish capital markets in order to attract local and international investors. Improving the liquidity and contributing to the overall development of Turkey’s capital markets is a strategic priority for the Bank in Turkey.
The EBRD started investing in Turkey in 2009. The country is a top destination for the Bank’s finance, with €1.9 billion invested in 2016 alone. To date, the Bank has invested over €9 billion in Turkey through more than 220 projects across sectors and has mobilised nearly €20 billion for these ventures from other sources of financing. Some 98 per cent of the Bank’s investments in Turkey are in the private sector.