Kiyikoy WPP Extension

Location:

Turkey

Project number:

50619

Business sector:

Energy

Notice type:

Private

Environmental category:

A

Target board date:

11 Dec 2019

Status:

Passed Final Review, Pending Board Approval

PSD disclosed:

10 Oct 2019

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)  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 is located within a major bird migratory flyway in the Bosphorus region. Given the potentially sensitive location, the proposed extension of the existing wind farm the Bank requires that an Environmental and Social Impact Assessment (ESIA) is undertaken and disclosed 60 days prior to Board consideration. An ESIA disclosure package was disclosed by the Sponsor on 9 October 2019 following due diligence undertaken by the Bank and an independent consultant.

The first stage of the development was started in 2007 with a 28 MWe wind farm put into operation in 2014.  Planning for the extension was started in 2014 and an EIA was undertaken at this stage for a wind farm of 100 MWe in total (first stage plus extension). This was approved and permitted by the competent authorities in 2017. 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 pipe-line. The Project was acquired by the current Sponsor in December 2017, who undertook additional biodiversity studies in 2018.

The wind farm itself is located within the boundaries of the Istranca Mountains Key Biodiversity Area (KBA) and is 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 Project site. The wind farm is not located within the IBAs. The main migratory birds are white stork, common buzzards and European honey-Buzzard.

Given the sensitivity of the site, the Bank retained an independent consultant to undertake an 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).

Considering the sensitivity of the Project area, 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 bat populations 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 for both spring and autumn migration seasons. This has included bird and bat activity surveys and carcass surveys of the proposed extension as well as an assessment of existing wind turbines. The results are included in the ESIA disclosure package and the surveys will continue during the disclosure, construction, and operational phases. Measures have been defined and will be refined as more baseline data are gathered, to achieve a no net loss of priority biodiversity. The data gathered and impact assessment indicates a limited impact on birds, which can be further mitigated through active turbine management and shut down on-demand protocols. The studies further identified that a couple of turbines may pose a collision risk to bats and additional studies are being undertaken to optimize and refine mitigation measures, including increasing turbine cut-in speeds. Overall through the implementation of the mitigation measures, the impacts on birds and bats can be mitigated and the appropriate measures have been included in the ESAP as outlined below.

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 assessment 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 the impacts and the Company has committed to developing a Resettlement Action Plan should the householder wish to re-locate during the construction or operation period. The Company will undertake stakeholder engagement as defined in the Stakeholder Engagement Plan, 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 has been agreed with the Sponsor which includes among others, continued monitoring of the project (including bird and bat monitoring and carcass surveys) and appointment of an independent bird and bat expert (referred to as Independent Ornithological Expert) to help review monitoring data and implement the appropriate mitigation measures. The mitigation measures will include an active turbines management system and shut down on-demand protocols, increased cut-in speeds to reduce the impact on bats 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 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 continue to monitor the Project including review of the annual reports 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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