Kiyikoy WPP Extension

Location:

Turkey

Project number:

50619

Business sector:

Energy

Notice type:

Private

Environmental category:

A

Approval date:

11 Dec 2019

Status:

Signed

PSD disclosed:

10 Oct 2019

Translated version of this PSD: Turkish

Project Description

A senior secured term loan of up to USD 37 million to Alenka Enerji Uretim ve Yatirim A.S. (the "Borrower" or "Alenka Enerji"), a special purpose vehicle fully owned by Borusan EnBW Enerji Yatirim ve Uretim A.S. (Borusan EnBW Enerji)  as a part of USD 74 million financing package, with the purpose of (i) development, operating and financing 72 MW  Kiyikoy Wind Power Plant (WPP) extension which will increase the total capacity to 100MW from existing 28MW (ii) refinancing of EUR 10.3  million outstanding leasing facility provided for the original wind farm by Is Leasing.

Project Objectives

The project aims to support the development and construction of renewable power generation in Turkey.

Transition Impact

The Project targets the Green Transition Quality with 100% GET share by increasing the share of renewable energy in Turkey's energy mix, decreasing reliance on imported gas, and contributing to the realization of the Turkish government's target of installing c. 27GW of non-hydro renewable generation capacity by 2023, 20GW of which is expected to be wind. The Project will help to realize approximatively 76,000 tonnes of CO2 emission savings per year.

Client Information

ALENKA ENERJI URETIM VE YATIRIM AS

The Borrower is a special purpose vehicle established to develop, construct and operate the Kiyikoy Windfarm.

Borusan EnBW Enerji, the 100 percent owner of the Borrower, was founded in 2007 by the family-owned Turkish conglomerate Borusan Holding to invest in the energy sector. In 2009, a partnership agreement was signed between Borusan Holding and the publicly owned German utility EnBW AG. Currently, the operational portfolio of the Sponsor consists of 8 WPPs (446 MW), 1 HPP (50 MW) and 2 SPPs (9 MW) which in total corresponds to 505MW installed capacity.

EBRD Finance Summary

USD 37,000,000.00

Total Project Cost

USD 101,000,000.00

Environmental and Social Summary

Category A (ESP 2014). The Project, which involves the extension of an existing wind farm, is located within a major bird migratory flyway in Turkey. Given the sensitive location, and the potential for significant environmental impacts, the Project was subject to  an Environmental and Social Impact Assessment (ESIA) and disclosure of an ESIA disclosure package  on 9 October 2019 following review and appraisal undertaken by the Bank and an independent consultant. The disclosure package consists of an ESIA, Non-Technical Summary, Stakeholder Engagement Plan (SEP), Biodiversity Action Plan, Livelihood Restoration Plan and an ESAP. Public hearings were undertaken in late November 2019.

The first stage of the wind farm commenced in 2007 with a 28 MWe wind farm put into operation in 2014.  Planning for the extension commenced in 2014 and a national EIA was undertaken for a 100 MWe capacity wind farm (first stage plus extension). This was approved and permitted by the competent authorities in 2017. The existing wind farm and the Project was acquired by the current Sponsor in December 2017, who undertook additional biodiversity studies in 2018.

The wind farm and the Project are located within the boundaries of the Istranca Mountains Key Biodiversity Area (KBA) and located on the Via Pontica bird migration flyway, along the west coast of the Black Sea. Igneada Forests and Terkos Basin Important Bird Areas (IBA) are located near the site. The wind farm and the Project are not located within the IBAs. The most abundant migratory birds are white stork, common buzzards and European honey-Buzzard (all Least Concern species as per IUCN threat classification) and the migration is concentrated in the spring season. The Project is located in a forestry area, away from main residential areas (one house is located nearby) and near to the right of way of the TurkStream gas pipeline.

Given the sensitivity of the Project site, the Bank retained an independent consultant to undertake Environmental and Social Due Diligence (ESDD) of the Project and to work with the Sponsor and their consultants to develop an ESIA disclosure package in line with the Bank's Performance Requirements (PRs). The ESDD identified the need for a Critical Habitat assessment in line with Performance Requirement 6 and need for additional biodiversity studies, notably as the historic data did not allow for a full bird risk collision assessment or a review of impacts on bats in line with EUROBAT guidance and good industry practice. Additional biodiversity surveys were undertaken starting from the end of 2018 throughout 2019 to take account of the spring and autumn migration periods. This has included bird and bat activity surveys of the Project and wind farm as well as carcass surveys in the existing wind farm area.

The results of the surveys and assessment are included in the ESIA disclosure package together with an update disclosed in December 2019, which considers the results of additional surveys.  The assessment has concluded that despite the location of the Project within the Via Pontica migratory flyway, the Project site itself is not Critical Habitat for these migrating birds.  Considering the importance of the flyway, however, there is still a need to achieve a no net loss of biodiversity.  The assessment has determined that the Project and existing wind farm present a low risk  to migrating birds.  This risk will be further mitigated to achieve no net loss through turbine shut down on-demand, which will be optimised through monitoring in 2020.  The assessment has identified a potentially significant collision risk to bats in the Project area.  Carcass surveys within existing wind farm have shown high levels of bat mortality from collisions and the assessment has determined that the site is Critical Habitat for various bat species (Annex IV of the EU Habitat Directive).  Collision risks to bats will be mitigated through setting increased turbine cut in speeds (the wind speed at which the turbines blades commence rotation) to 5m/s during the period April to October.  In the first instance this will apply starting in April 2020 to 10 of the existing, higher risk, turbines with cut in speeds and affected turbines revised through monitoring of bat activity and bat mortality in 2020 and agreed with the Company by the end of 2020.  Project turbine cut in speeds will be informed by monitoring of bat activity and bat mortality during 2020 and 2021 and agreed with the Company by the end of 2021. The Company is further considering bat deterrent systems based upon the applicability of the available technology to the site.  Through these measures, a net gain in bat populations compared to the current baseline is expected.  All mitigation, management and monitoring measures are captured in a Biodiversity Action Plan (BAP), which also extends to flora.  The measures will be refined as more baseline data are gathered to ensure that impacts are avoided and minimised and a no net loss of priority biodiversity, and net gains for critical habitat, is achieved.  Monitoring will continue and will further inform the need for additional conservation actions for bats.

The Project will not be associated with any physical displacement and a livelihood restoration plan has been developed and disclosed to address impacts on local land use and livelihoods. The ESIA has indicated there is no significant noise, shadow flicker or visual impacts on the wider area with potential impacts locally on the residential household located near turbine T15.  Mitigation measures will be implemented to reduce these impacts and the Company has committed to developing a Resettlement Action Plan should the householder wish to re-locate during the construction or until the end of second year of operation period. The Company has and will continue to undertake additional stakeholder engagement as defined in the Stakeholder Engagement Plan (SEP), which is part of the disclosure package.  In addition, the Company plans to undertake additional local community investments as part of its continued commitment to supporting local communities.

An ESAP and a BAP have been agreed with the Sponsor and include, amongst others, continued monitoring of the Project (including bird and bat monitoring and carcass surveys) and appointment of an independent bird and bat expert to help review monitoring data and implement the appropriate mitigation measures. The key mitigation measures include turbine shut down on-demand, increased turbine cut-in speeds as well as the implementation of good international practices and an environmental and social management system during construction and operation.  Overall, through the implementation of the ESAP, the BAP and the measures and actions committed to in the ESIA, the Project will be structured to meet the Bank's Performance Requirements. ESDD has confirmed that the Company has the institutional capacity to manage E&S issues associated with the Project and fully implement the PRs. The Bank will monitor the Project including review of annual and independent ornithological reports.

There is an Environmental and Social Impact Assessment available for this Project.

Technical Cooperation

None.

Company Contact Information

Cenk BULCA
info@alenkaenerji.com
+90 288 213 15 45
https://www.alenkaenerji.com.tr/
Purtelas Hasan Efendi Mah. Meclisi Mebusan Cad. No: 35/37 Salipazari/Beyoglu Istanbul/Turkiye

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