Garanti Leasing - TurSEFF III

Location:

Turkey

Project number:

50212

Business sector:

Non-depository Credit (non bank)

Notice type:

Private

Environmental category:

FI

Target board date:

06 Jun 2018

Status:

Concept Reviewed

PSD disclosed:

03 May 2018

Translated version of this PSD: Turkish

Project Description

The provision of a senior loan of up to EUR 50 million (or its USD or TRY equivalent) financing to Turkish Leasing Finance Company Garanti Finansal Kiralama A.S. ("Garanti Leasing"), a subsidiary of Garanti Bank, the second largest privately owned bank in Turkey, under the Turkey Sustainable Energy Financing Facility III ("TurSEFF III"), to finance resource efficiency (ResE) and small scale renewable energy investments in Turkey. The proposed transaction is the second transaction with Garanti Leasing and builds on the positive experience of working with Garanti Leasing.

Project Objectives

TurSEFF III builds on the success of the first two phases of the framework and aims to (i) further increase financial intermediation for small scale renewable energy investments and a broader range of resource efficiency investments, including energy efficiency, waste minimisation and water savings; (ii) include public sector investments; and (iii) further improve the financial institutions' skills in recognising and assessing a wider range of sustainable energy and resource efficiency projects.

In addition, TurSEFF III will target the municipal sector in Turkey for the first time through a credit line as well as extending financing to leasing companies which is expected to facilitate financing in areas previously not covered by TurSEFF or any other comparable facility in Turkey.

Transition Impact

Under TurSEFF III, transition impact will stem from: (i) transfer and dispersion of skills by building expertise among both Garanti Leasing and sub-leasers related to sustainable energy and resource efficient technologies and investments; (ii) demonstration of benefits of energy conservation and the promotion of expansion of resource efficiency and renewable energy leasing in Turkey; and (iii) setting of standards for corporate governance and business conduct by continuing to mainstream EBRD standards.

Client Information

GARANTI FINANSAL KIRALAMA AS

Garanti Finansal Kiralama A.S. ("Garanti Leasing" or "the Company") was established in 1990 as a subsidiary of Garanti Bankasi A.S. The Company is currently the 3rd largest leasing player in Turkey with total assets of EUR 1.6 billion. The Company has a strong market position with a primary focus on SME clients. The Company is rated BBB- (stable) by Fitch and BB (negative) by S&P, in line with Garanti Bankasi's rating.

EBRD Finance Summary

EUR 50,000,000.00

EUR 50,000,000.00 (or its USD or TRY equivalent)

Total Project Cost

EUR 50,000,000.00

EUR 50,000,000.00 (or its USD or TRY equivalent)

Environmental and Social Summary

Categorised FI (ESP 2014) Garanti Leasing, Turkey is an existing client of the Bank and has been satisfactorily implementing the E&S requirements under PRs 2, 4 and 9 under existing exposures. For this transaction Garanti Leasing will be required to continue to comply with the designated PRs, implement the EBRD's E&S Risk Management Procedures for Leasing Companies which includes adherence to the EBRD's Environmental and Social Exclusion List and submit Annual E&S Reports to the Bank. Under TurSEFF III Garanti Leasing must ensure borrowers comply with applicable national environmental, health and safety and labour requirements and that sub projects meet the environmental eligibility criteria for resource efficiency and renewable energy projects as per the TurSEFF III Policy Statement.

Technical Cooperation

TurSEFF III is supported by a technical cooperation programme in the amount of EUR 5.5 million.

Funding for the programme is provided by the EU under two contribution agreements "Enhancement of Turkish Energy Sector in line with EU Energy Strategies" and "EU Instrument for Pre-Accession Assistance (IPA) 2009 Turkey Private Sector Support Facility".

Company Contact Information

Damla Binici
DBinici@garantileasing.com.tr
www.garantileasing.com.tr/
Eski Buyukdere Cad. Ayazaga Koy Yolu No: 23 34396 Maslak, Istanbul

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