Enerjisa Enerji Loan

Location:

Turkey

Project number:

50776

Business sector:

Energy

Notice type:

Private

Environmental category:

B

Approval date:

23 Apr 2020

Status:

Signed

PSD disclosed:

24 Feb 2020

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

Project Description

A senior unsecured term loan up to USD 225 million equivalent in TRY in favour of Enerjisa Enerji A.S. (the "Borrower" or the "Company").

Enerjisa Enerji is an existing client of the Bank operating electricity distribution and electricity retail business in Turkey serving a quarter of Turkey.

Enerjisa Enerji operates as a JV between Sabanci Holding and E.ON, each holding 40%. Remaining 20% is free float on Borsa Istanbul.

Project Objectives

The EBRD loan will finance part of the investment program for the years 2019 and 2020 of its three regional electricity distribution networks: Baskent EDAS, Anadolu Yakasi EDAS, Toroslar EDAS.

Transition Impact

ETI score: 64

The project targets the "green" and "inclusive" qualities.

Green: The investment programme will involve upgrading and expanding the existing network and modernising customer metering.  The capex investments made across the distribution networks will lead to a reduction of technical losses and improved network operation, resulting in incremental CO2 savings.

Inclusive: The Project promotes women's access to economic opportunities in a male-dominated sector.  The Bank will work with Enerjisa Enerji to enhance women's access to employment opportunities in the Company's workforce through a Technical Cooperation project (the "TC").  The TC will help Enerjisa distribution companies to develop, adopt and implement an Equal Opportunities Action Plan with a view to promote women's access to economic opportunities across all their operations.

Client Information

ENERJISA ENERJI AS

Enerjisa Enerji AS

Enerjisa Enerji is one of the leading private utility players in Turkey, listed on the Borsa Istanbul.  The Company operates electricity distribution networks and retail electricity supply companies in three regions: Ankara and 6 cities around Ankara, Asian side of Istanbul and central southern part of Turkey.  It operates as a JV between Haci Omer Sabanci Holding A.S. ("Sabanci Holding") and DD Turkey Holdings S.A.R.L. (fully owned by E.ON SE ("E.ON")), each partner holding 40%.  The remaining 20% of shares are in a free float on Borsa Istanbul following an IPO in February 2018.  In 2019, the Company distributed 45.8TWh, corresponding to a quarter of the country's total electricity distribution.

EBRD Finance Summary

USD 225,000,000.00

USD 225 million equivalent in TRY.

Total Project Cost

USD 484,000,000.00

USD 409 million.

The remaining USD 184 million of the Project Cost will be financed through operational cash flow and external financing.

Additionality

Long-term financing: in the adverse macro-economic environment EBRD is seen as an essential partner for reliable long term local currency financing.

Higher inclusion standards: the Company will benefit from cooperation with EBRD on strengthening its Equal Opportunities practices.

Environmental and Social Summary

Categorised B (2014 ESP):  The Bank provided financing as part of a bond issuance in 2017 and subsequently a loan in 2019 as part of the Agera Project.  A comprehensive ESAP was agreed in 2017, which was then revised and updated following an independent ESDD in 2019, as part of Project Agera.   The Company is generally on track in implementing the ESAP and has the institutional capacity to implement the Banks Performance Requirements (PRs).

Enerjisa Enerji has 10 million customers and distributes electricity to about a quarter of Turkey.  The Company operates low and medium voltage lines (up to 36 kV), which due to the nature of operations have limited environmental and social impacts.  The investment program will involve upgrading and expanding the existing network.  This will reduce supply losses and outages and a screening of the investment plan confirmed that future projects would not meet the Bank's A category classification.

The ESDD and ongoing monitoring of the environmental and social performance of the company identified issues such as need for further institutional strengthening on environmental, health, safety and social risk management and management of occupational health, safety and labour issues in line with best practices inclusive of labour audits.  The due diligence also identified the need to further strengthen some of the reporting requirements as well as Company's implementation of key ESAP actions relating to social monitoring and labour management of contractors in line with best practices.  Actions to address these issues have been included in a new Environmental and Social Action Plan (ESAP) focused on the distribution companies, along with measures to integrate social requirements into contractor management, to improve land acquisition and stakeholder engagement in line with EBRD PR.

The Company is committed to implement corporate Environmental, Social and Governance standards at the distribution companies including further strengthening of EHS management systems in line with the ISO14001; ISO 45001 standards.  Occupational Safety and Health (OHS) management improvements will include adopting a corporate OHS policy and introducing an accident investigation and reporting procedure, near miss reporting and occupational safety analysis.

The project will not require any resettlement of households or businesses and the majority of the investment plan will be carried out on public land in urban locations.  Some land acquisition in rural areas will be required and the company has committed to avoiding land take in agricultural areas if it is technically and economically possible.

A land acquisition procedure has been prepared and adopted by the company.  This defines consultation, compensation and monitoring measure required for any land acquisition, in line with EBRD PR and Turkish law.

The updated ESAP requires that the Company develops and implements all investment projects in compliance with the Bank's PRs and that new investments will be subject to appropriate screening and assessment of environmental and social impacts including those on any protected areas and sensitive receptors as part of corporate review and agreements with Competent Authorities.  On the basis of the screenings and assessments, biodiversity mitigation measures will be developed and implemented for all sites (such as bird protectors etc), and for other natural (non-protected) areas, as needed.  This will include a list of mitigation measures to be utilized on a case by case basis by contractors undertaking works.

A Stakeholder Engagement Plan will be available in English and Turkish at EBRD website and Client website and the Company publishes sustainability reports, which will be updated on an annual basis.

The Bank will monitor the implementation of the ESAP and the Project through annual reports provided by the Companies and monitoring visits.

Technical Cooperation and Grant Financing

Technical Cooperation component of up to EUR 75,000, operated through the EBRD Gender Advisory Services Framework, will be attached to the loan.  A 10 per cent client contribution is expected.  Under the TC, a group of specialised consultants will assist the client in strengthening equal opportunities in its human resources policy and other company policies, with a view to increase the ratio of female to male employees and to enhance career opportunities for women in the company, as well as to address areas, which the client considers a priority.

Company Contact Information

Cem Gokmen Gokkaya
CEM.GOKKAYA@enerjisa.com
+90 216 579 08 13
https://www.enerjisa.com.tr/en/home
Barbaros Mahallesi, Begonya Sokak, Nidakule Atasehir Bati, No: 1/1, Istanbul, Postcode: 34746

PSD last updated

12 May 2020

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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