The EBRD has participated in the Mersin Uluslararasi Liman Isletmeciligi A.S ("MIP" or "Mersin International Port") US$ 600 million Eurobond issue. This is the Bank's second subscription to an MIP bond following its participation in MIP's first issuance in 2013.
The proceeds of the issuance will be used for refinancing MIP's existing bond of USD 450 million, which will mature in August 2020, and for general corporate purposes.
ETI score: 80
The project is prepared under the "Framework for Development of a Secondary Market for Maturing PPPs". In line with the Framework, the Bank's participation in the bond contributes to "Resilient" and "Well-Governed" transition qualities, which are related to the development of the capital markets in Turkey by encouraging infrastructure companies to diversify their sources of funding and supporting enhanced disclosure standards.
1) Resilient. The project supports the development of secondary market for PPP transactions through facilitating the entry of new institutional investors;
2) Well-governed. The project promotes adherence to high standards of transparency in the prospectus and ongoing reporting/disclosure.
MERSIN ULUSLARARASI LIMAN ISLETMECILIGI AS
MIP, an existing client of the Bank, is a special purpose vehicle jointly owned by (i) PSA International ("PSA"), (ii) Australia's IFM Investors ("IFM"), and (iii) Akfen Holding A.S. ("Akfen"). Following a competitive tender process, MIP was awarded on 11 May 2007 a 36-year concession by the Turkish authorities to develop and operate Mersin Port.
It is Turkey's largest port in terms of import/export container throughput and the largest container port by total throughput. The port is well equipped to handle a range of dry bulk, liquid bulk, containers, and ro-ro cargos.
EBRD Finance Summary
Subscription to a US$ 600 million 5-year, unsecured, fixed-rate bond issue arranged by HSBC, Citi and DBS.
Total Project Cost
The EBRD's participation in the issuance provides comfort to other investors and further widens market participation, which is essential for the success of the issuance given the limited number of capital market transactions in Turkey in the infrastructure sector.
Environmental and Social Summary
The project has been categorised B in line with the EBRD's 2014 Environmental and Social Policy. The environmental and social (E&S) risks and impacts from refinanced capex completed under the Phase I East Mediterranean Hub Project are well understood and have been managed in line with Bank's performance requirements. Due diligence has been governed by capital markets rules and has been based on publicly available information on the transaction and the Bank's knowledge of the current operational E&S performance; the robustness of the risk management systems adopted by the company; the Bank's knowledge of impacts that have been associated with those capital works being refinanced; and the low sensitivity of the receiving environment.
As indicated, the Bank is familiar with MIP's operations through the financing of the development of the Phase I East Mediterranean Hub Project, which was subject to national Environmental Impact Assessment and independent Environmental and Social Due Diligence in 2013. MIP has been implementing the Environmental and Social Action Plan (ESAP) agreed with the Bank in 2013 (with all activities related to construction of the Phase I Mediterranean Hub Project including implementation of Construction E&S management plan, supplementary dredging study, biodiversity monitoring, implementation of stakeholder engagements plan completed) and reporting on the E&S performance has been satisfactory to date.
An ESAP has been agreed for the transaction and appended to the framework agreement. The ESAP requires MIP to maintain operations at the standards required by the performance requirements. The Bank will continue to closely monitor operations of MIP and its E&S performance and amend the ESAP as required, which will be covenanted in the side letter to the framework agreement.
Technical Cooperation and Grant Financing
Company Contact Information
+90 324 241 2900
Mersin International Port Ismet Inönü Blv Içel Merkez/Mersin (Içel) Turkey
PSD last updated
21 Feb 2020
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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 firstname.lastname@example.org. 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 email@example.com to get guidance and more information on IPAM and how to submit a request.