NPL Resolution Framework - Dunya Varlik Senior Loan III

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Overview

A 5 year senior secured loan facility of up to TRY 100m (circa EUR 8.1m), amortizing after the 2 year grace period (WAL of 3.5 years), to be provided to Dunya Varlik Yonetim AS ("Dunya" or "Company").

Project ID 51839

Status Repaying

Location

Türkiye

Business Sector

Financial Institutions

Notice Type

Private

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Company Contact Information

Olga Ucoz
Olga.Ucoz@dunyavarlik.com
+90 850 22 22 850
+90 850 480 70 71
https://www.dunyavarlik.com/
Profilo Plaza B Blok Kat: 1, Mecidiyekoy, Istanbul,TURKEY

Project ID 51839

Status Repaying

Location

Türkiye

Business Sector

Financial Institutions

Notice Type

Private

Environmental Category

Approval Date

30 Nov 2021

Disclosure date

06 Dec 2021

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

NPL Resolution Framework - Dunya Varlik Senior Loan III (Turkish) (PDF, 0.68MB)

Project description

Project objectives

The loan will support the client's acquisition of the new non-performing loan (NPL) portfolios in Turkey, after the market was halted due to Covid-19 crisis. With a WAL of 3.5 years, the loan will provide a stable source of long term funding for Dunya and will allow for stronger participation in local sale of the portfolios.

Transition impact

ETI Score:60

nt: Stock of NPLs represent one of important systemic risks to financial stability in Turkey. They affect banks' cost of funding and profitability, thus impairing banks' capacity to lend to the real economy. A successful reduction of NPLs would help in cleaning up the banks' balance sheets and freeing up capacity for new lending, thus strengthening financial resilience. This loan will directly contribute to addressing this issue, as it will be used entirely for acquisition of the new NPL portfolios from the local banks.

Competitive: The project will support new NPL portfolio transactions and NPL management business in Turkey by supporting one of the leading players in the country. EBRD's loan will help Dunya acquire a higher number and volume of portfolios, at a time when market activity is expected to increase (in 4Q21 and in 2022).

Client information

DUNYA VARLIK YONETIM AS

Established in 2008, Dunya is one of the largest NPL and distressed asset management company in Turkey (out of 21 AMCs in the country) with a 25.2% market share based on Unpaid Principal Balance (UPB"), total assets of EUR 129.8m and total equity of EUR 57.4m as of 3Q21. Dunya is currently the EBRD's only NPL asset management investment/client in Turkey.

EBRD Finance Summary

TRY 100,000,000.00

Senior secured loan of up to TRY 100,000,000.

Total project cost

TRY 100,000,000.00

Total project cost is up to TRY 100,000,000.

Additionality

The EBRD's financing will be provided in local currency (TRY) and will have a longer tenor (5 years) and longer grace period (2 years) than the currently available alternative sources of funding to the Company. This will support Dunya in improving the maturity match between its assets and liabilities. Furthermore, the EBRD's new loan is structured as a response to the expected increase in NPL market activity in 2022 and is designed to support the company's growth and expansion of its current AuM base. It is expected that it will also have strong signalling effect for other lenders, which would allow for further expansion of Dunya's business and better asset/liability match.

Environmental & Social Summary

Categorised FI (ESP 2019). Dunya Varlik is an existing client. There are potential social and reputational risks associated with the management of non-performing loan portfolios. These lie in the sensitive management of borrowers in financial difficulties and vulnerability analysis of borrowers. Dunya has in place appropriate management systems to identify and address these risks. The client will need to continue to comply with PR2 and 4; and to carry out a social risk screening and management aligned with some provisions of PR9. Dunya and any companies it may outsource to, will need to continue to manage potential social impacts on borrowers by diligent application of applicable country as well as corporate Codes of Conduct for NPLs and applicable protection laws. Dunya will need to continue to submit annual environmental and social reports to EBRD.

Technical Cooperation and Grant Financing

n/a

Company Contact Information

Olga Ucoz
Olga.Ucoz@dunyavarlik.com
+90 850 22 22 850
+90 850 480 70 71
https://www.dunyavarlik.com/
Profilo Plaza B Blok Kat: 1, Mecidiyekoy, Istanbul,TURKEY

PSD last updated

06 Dec 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 the 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 its associated Environmental and Social Requirements (ESRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the ESRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation, and to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about the environmental and social (E&S) 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 also requires its clients to disclose information, as appropriate, about the risks and impacts of 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 of the Bank's activities 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 EBRD believes that identifying and resolving issues in the project assessment and approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts andhelps to monitor integrity risks in projects post-investment.

OCCO is further responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, either 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. OCCO will follow-up all matters reported. It will review all matters reported. 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, which entered into force on 1 January 2025, sets out how the EBRD discloses information and consults with its stakeholders to promote better awareness and understanding of its strategies, policies and operations. 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 (for example, 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 the 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 and how to submit a Request for review. Alternatively, contact IPAM by email at ipam@ebrd.com for guidance and more information on IPAM and how to submit a request.

Environmental and Social Documentation is not available for this project.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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NPL Resolution Framework - Dunya Varlik Senior Loan III

Overview

Project timeline

Company Contact Information

Project description

Project objectives

Transition impact

Client information

EBRD Finance Summary

Total project cost

Additionality

Environmental & Social Summary

Technical Cooperation and Grant Financing

Company Contact Information

PSD last updated

Understanding transition

Business opportunities

General enquiries

Environmental and Social Policy (ESP)

Integrity and compliance

Access to Information Policy (AIP)

Independent Project Accountability Mechanism (IPAM)