“EBRD helped us transform whole sectors with best practices”

By Olga Rosca
@olgarosca

The EBRD helped us transform whole sectors through best practice

Director of EBRD operations in Turkey Jean-Patrick Marquet and Akfen Holding CFO Kadri Samsunlu

Akfen Holding CFO Kadri Samsunlu looks back at 10 years of partnership with the EBRD

As the EBRD takes its relationship with Akfen Holding, one of the leading infrastructure groups in Turkey, to the next level, its Chief Financial Officer Kadri Samsunlu explains the Bank’s role in the company’s growth.

What does cooperation with the EBRD bring to Akfen in Turkey and outside of Turkey?

Let me better tell you what wouldn’t have happened if not for the EBRD. Without the Bank’s financing and advice, two major brand new Georgian airports – in Batumi and Tbilisi – would not have been developed. Mersin International Port, on the Mediterranean coast, would have probably not issued its debut bond which was also Turkey’s first infrastructure bond. The country’s first private water concession operator would not have been established. We might not have developed three- and four-start hotels with standardized service and quality in remote cities of Russia.  And we certainly would not have been as confident as we are today about our ambition to build a 1000 MW portfolio of renewable energy projects.

At the same time, the EBRD has educated us on the importance of the quality of our growth. With the Bank’s support and guidance, we have improved transparency and accountability, learned to better deal with decision makers, regulators, and other stakeholders and were able to become a best practice example for other companies.

The EBRD has helped us focus on financial, social and environmental sustainability.

The Bank always provided us financing solutions that maintain best capital structure for our businesses and do not result in deteriorated balance sheets. We always feel that we are all in the same boat when we work with the EBRD.

Istanbul’s IDO ferries is a good example of our focus on how we work to achieve social sustainability. Since we acquired – with EBRD financing – this municipal company in 2011, we have been continuously increasing the number of women in the company.

In addition, our engagement with the Bank, has encouraged us stay focused on environmental sustainability. We have been reducing carbon emissions across our businesses; protecting water sources and the environment more generally, by expanding our renewable energy portfolio.

The Bank has enabled us to transform whole sectors with best practices.

What was the most memorable moment during these ten years of partnership?

I remember well the bond issuance by Mersin International Port, our flagship asset. At the beginning of 2013, the sponsors – Akfen Holding and Port of Singapore Authority – were considering financing options to replace covenant heavy financing with a covenant-free. One of the options was a US$ 700 million Eurobond issue. In March same year the EBRD indicated its interest to support this issuance as an anchor investor. Two months later, in the wake of anti-government protests, capital markets saw quite some turbulence. Primary market access for Turkish issuers was effectively shut and there were heavy selling pressure on secondary trading desks, an indication of a very challenging environment for a bond issue.

But the EBRD was there for us. Its backing was extremely reassuring and we never considered delaying the bond.

Eventually the issuance was a major success. It was a first on many accounts: Turkey’s first infrastructure bond, the first “issuance with anchor investors” (in fact three of them, including the EBRD) and the first port sector US dollar-denominated bond globally in four years.

What are the company’s immediate plans and where do you see it in the medium-term?
We are planning to finalise our restructuring efforts at the holding level and complete several ongoing investments. These include hydroelectric power plants wind and solar power plants, ongoing hotel development as well as Mersin port expansion. We are also developing three hospital PPP projects, other real estate and student housing projects.

Our greatest focus currently is on Akfen Renewable Energy, a subsidiary where the EBRD and the IFC hold stakes. We have a strong pipeline of hydro, wind and solar power plants at the development stage and the plan is to take it to 1000 MW.

In addition, our plan is to solidify our leadership in the Turkish infrastructure sector. We believe that enhancing the strong performance of our valuable assets like TAV Airports, Mersin International Port, IDO ferries, Akfen Renewable Energy and growing our presence in the energy sector, will strengthen our position and enable us to continue to be of service to the society.