Borusan EnBW Enerji Loan

Location:

Turkey

Project number:

52109

Business sector:

Energy

Notice type:

Private

Environmental category:

B

Approval date:

08 Dec 2021

Status:

Disbursing

PSD disclosed:

05 Nov 2021

Project Description

Up to USD 80 million unsecured A/B loan with up to 6-year tenor (the "Loan") to Borusan EnBW Enerji A.S. (the "Company" or "Borusan EnBW Enerji"), a renewable energy company 50/50 owned by the Turkish conglomerate Borusan Holding A.S. ("Borusan Holding") and the German utility EnBW AG ("EnBW"), (together the "Sponsors"). The Company is an existing client of the Bank, as the sponsor of the Kiyikoy Wind Power Plant (WPP) Extension project. 

Project Objectives

The loan will be used to replace up to USD 80 million of maturing short-term facilities and enable the company to realize the planned additional renewable capacity in its pipeline.

Transition Impact

ETI score: 71

The project targets the "Green" and "Inclusive" qualities.

The green transition impact of the project is derived from providing for additional financing headroom required to continue investing in renewable pipeline in the next five years. Both the economic activity and investment projects of the company are fully aligned with the EU taxonomy/ positive list of climate finance guidelines of multilateral development banks.

 

The Inclusive transition impact of the Project promotes access to market-relevant skills and employment opportunities for young people in Turkey.  The Company will achieve this by working in partnership with a local technical and vocation institute to provide young people with the green skills needed to succeed in the renewable energy sector and achieve gender parity among participants as young women remain underrepresented in the country's labour market. 

Client Information

BORUSAN ENBW ENERJI YATIRIMLARI VE URETIM AS

EBRD Finance Summary

USD 40,000,000.00

Total Project Cost

USD 80,000,000.00

Additionality

The EBRD terms and the tenor for refinancing maturing short-term facilities, will enable a more flexible and stronger balance sheet to continue investments into the renewable energy projects in Turkey. 

The company seeks EBRD expertise in promoting equal opportunities through a specific initiative to support "Young Women in Wind".

Environmental and Social Summary

Category B (2019 ESP). The project was initially proposed in 2020 under the Covid-19 crisis response which limited the scope of the Bank's due environmental and social due diligence (ESDD) in accordance with the Bank's Environmental and Social Policy. Further due diligence has since been conducted in 2021 focused on corporate management.  Overall, adequate corporate ESDD has been undertaken in-house, which focused on reviewing corporate environmental and social management and high levels risk assessment of the portfolio and project pipeline. In addition to the use of questionnaires, the ESDD also drew upon past experience with the company on existing Bank financed projects (Kiyikoy WPP) and E&S documentation provided by the company in relation to its HSE, labour and land acquisition policy and practices. The ESDD has confirmed that the company has the institutional capacity to implement the Bank's Performance Requirements and has in place various management systems, plans, procedures and associated capacities to appropriately manage the environmental and social impacts and risks associated with its activities. 

The company operates a number of renewables assets, namely wind power project and one hydro plant. The company confirmed these are in-compliance with the national law and the company has been implementing good industry practices. In terms of the Bank financed Kiyikoy WPP Project, the company is implementing the existing ESAP in line with agreements. The ESDD identified the need for additional review of the renewable portfolio, notably in terms of the wind project and avoidance of sensitive locations due to avifauna and human receptors. This action has been included in the corporate ESAP and agreed with the company.

ESDD also reviewed future investment plans. These consist of wind, solar and hybrid solutions, which are not located in sensitive areas, and would not trigger A-category. The ESAP includes commitment to comply with the Bank's PRs and development of appropriate studies as well as disclosure of Non-Technical Summaries on these projects. 

The Company's HR policies and procedures are in line with Turkish legislation and largely with the EBRD's Performance Requirement (PR) 2. The Company is implementing a Covid-19 management plan in line with national guidelines and best practices. The Company has no retrenchment plans.

Occupational Health and Safety (OHS) provisions, including procedures, training and worker performance are generally aligned with OHS law and PR4 requirements although some improvements are required with respect to improvement of OHS performance within the supply chain.

Based on the ESDD a corporate ESAP has been developed to strengthen the E&S policies and has been agreed in principle with the company. Key ESAP actions require the company to explore implementing good international practices in terms of corporate reporting, including on climate related data in line with EU Guidance on Climate Reporting from July 2019 (i.e. TCFD recommendations) as well as undertake additional E&S audits of existing wind and hydro portfolio and implement recommendation of this audit, integration of E&S considerations in procurement activities, monitoring and further  strengthen stakeholder engagement activities at all sites.

The company will be required to submit annual E&S reports to the Bank and provide NTS' on new projects under development as well as any ESDD reports. The Bank will monitor the implementation of the ESAP with planned monitoring visits.

Technical Cooperation and Grant Financing

Technical Cooperation support, funded under the Gender & Economic Inclusion Technical Assistance Framework, to assist the client in developing and improving the client's youth career development function. 

Technical Cooperation support, funded under the Green Economy Transition Project Preparation and Implementation Framework - 2020 Turkey TC Fund (Turkey), to assist the borrower in deploying a utility scale battery storage via a pre-feasibility report as well as a regulatory a and technical analysis for the Turkish power market.

Company Contact Information

Hakan Aras
Enerji-info@borusanenbwenerji.com
+905308207101
https://www.borusanenbw.com.tr/
Purtelas Hasan Efendi Mah. Meclisi Mebusan Cad. No: 35/37 Salipazari / Beyoglu Istanbul/Turkey

PSD last updated

05 Nov 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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