TurSEFF III - Is Leasing

Location:

Turkey

Project number:

51723

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Approval date:

13 Jan 2021

Status:

Disbursing

PSD disclosed:

05 Feb 2021

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

Senior loan of up to EUR 40 million (or its USD or TRY equivalent) financing to Is Finansal Kiralama A.S. ("Is Leasing"), a subsidiary of IsBank and the second largest leasing company in Turkey, under the Turkey Sustainable Energy Financing Facility III ("TurSEFF III"). The proceeds of the EBRD's investment will be used to on-lend to eligible companies to finance resource efficiency and small scale renewable energy investments. The proposed transaction will be the sixth under TurSEFF III framework, the fourth financing to a leasing company and the first transaction with the client.

Project Objectives

The operation will contribute to the objectives of TurSEFF III by supporting the "Green" and "Competitive" transition impact qualities towards building a green economy by facilitating the expansion of resource efficiency and renewable energy lending while building a more competitive financial sector through developing the internal capacity of the participating financial institutions for financing green economy projects in Turkey.

Transition Impact

ETI score: 75

The project will support a strong player in the leasing market, which has the willingness and the ability to catalyse green economy in these extraordinary and challenging times. The project is particularly relevant given the market disruption and impact of the Covid-19 crisis on the Turkish economy and expected to contribute to the transition impact of TurSEFF III, supporting the "Green" and "Competitive" transition qualities.

Client Information

IS FINANSAL KIRALAMA AS

Is Leasing was established in 1988 as a partnership of International Finance Corporation (IFC), Societe Generale, IsBank and TSKB. Currently, IsBank and TSKB are the two parents of the company with 30.4% and 29.5% shares respectively while the remaining shares (40.1%) are quoted on Borsa Istanbul with a market cap of EUR 0.3bn (as of 26/01/2020). Is Leasing is a joint stock leasing company incorporated in Turkey. It is the second largest leasing company in Turkey by leasing receivables with around 11% market share. At 1H20, Is Leasing had EUR 1.3bn in assets, EUR 177m in equity, and recorded a EUR 8m profit on consolidated basis. Is Leasing is rated B+ (negative) by Fitch in line with its parents' rating.

EBRD Finance Summary

EUR 40,000,000.00

The loan will be provided in three tranches with the first tranche (up to EUR 15 million) being committed and the second and third tranches being uncommitted (up to EUR 15 million and EUR 10 million, respectively). 

Total Project Cost

EUR 40,000,000.00

Additionality

The additionality derives from i) the financing structure of the project in terms of amount which is not available in the market from a singular lender on reasonable terms, ii) standard-setting by helping the company to achieve higher standards, and iii) knowledge, innovation and capacity building, as the project will support capacity building of the company for financing green economy projects.

Environmental and Social Summary

Categorised FI (ESP 2019). Is Leasing is a new client and will be required to comply with the EBRD's Performance Requirements (PRs) 2, 4 and 9, adopt and implement the EBRD's Environmental and Social Risk Management Procedures for Leasing Activities and submit Annual Environmental and Social Reports to the Bank. The overall risk profile is considered to be low to medium and the EBRD will be working with the client to update the Environmental and Social Management System in line with the requirements of PR9.

Technical Cooperation and Grant Financing

TurSEFF III is supported by a technical cooperation programme in the amount of EUR 5.5 million. Funding for the programme is provided by the European Union under two contribution agreements "Enhancement of Turkish Energy Sector in line with EU Energy Strategies" and "EU Instrument for Pre-Accession Assistance (IPA) 2009 Turkey Private Sector Support Facility", and by the Republic of Turkey Ministry of Treasury and Finance under the "Turkey - EBRD Cooperation Fund".

Company Contact Information

Eralp Ersoy
eralpersoy@isleasing.com.tr
+90 212 350 74 50
+90 212 350 74 95
http://www.isleasing.com.tr
Is Kuleleri Kule 1 Kat: 6 4. Levent 34330 ISTANBUL

PSD last updated

05 Feb 2021

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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