Senior secured loan of up to USD 28 million to be disbursed in TRY to Uludag Elektrik Dagitim A.S. ("UEDAS" or the "Borrower").
UEDAS is the electricity distribution network operator in Bursa, Balikesir, Canakkale and Yalova provinces of Turkiye. It is ultimately owned by Actis Long Life Infrastructure Fund ("Actis") through the parent company ULUDAG Elektrik Dagitim ve Perakende Satis Hizmetleri A.S. Actis is an experienced, sustainable infrastructure focused fund.
The project will finance the implementation of 2023 & 2025 CAPEX investment plan agreed with the Energy Market Regulatory Authority for the fourth regulatory period (2021 & 2025).
ETI score: 64
The Transition Impact of the project will be derived from:
The Project will finance the upgrade and modernisation of the existing electricity distribution network improving the reliability of power supply with the reduction of theft and loss ratios, improvement of SAIDI (System Average Interruption Duration Index) and installation of smart meters.
Through the Project, the Borrower will introduce a new, accredited and gender-responsive skills development programme in partnership with a local education provider. The Borrower will also further develop partnerships with education providers to promote STEM careers for young women through a women-focused initiative.
ULUDAG ELEKTRIK DAGITIM AS
EBRD Finance Summary
Total Project Cost
The Bank's additionality mainly derives from:
- Financing Structure: The Bank's financing is key for UEDAS' capex implementation given the limited funding sources available for the Borrower in local currency for the required tenor due to constraints of local banks and unfavourable macroeconomic conditions.
- Risk mitigation: The Borrower will mitigate environmental, social and governance risks through the agreed ESAP.
- Standard-setting: The Borrower will promote youth inclusion and enhance the role of women in this traditionally male dominated sector.
Environmental and Social Summary
Categorised B (2019 ESP). The environmental and social due diligence (ESDD) for the Project, was undertaken by an independent environmental and social (E&S) consultant. The ESDD comprised of an E&S assessment of UEDAS corporate arrangements, a review of UEDAS capacity, past E&S performance, engagement with UEDAS management and site visits to urban and rural premises associated the UEDAS network operations. In addition, lenders, including EBRD, AIIB and FMO, recently carried out a site visit and further E&S reviews that included consultations with community representatives affected from past land acquisition.
ESDD confirmed that UEDAS has established an integrated management system (IMS) that includes systems for quality, environment, occupational health and safety (OHS), customer satisfaction, information security, and business continuity. The IMS covers all site operations of UEDAS. It was confirmed that UEDAS has recently embarked upon an ambitious sustainability plan including the development of organisational capacity, which includes the establishment of a sustainability department. The recent lenders visit confirmed that UEDAS have recently increased their E&S capacity. Other arrangements recently improved include E&S arrangements related to waste management, hazardous substance management and resource efficiency. UEDAS have also recently carried out a study of transformers confirming the presence of PCBs. This was confirmed to be very limited and a programme of testing transformers to identify the presence of any PCBs continues. Human resources policies are in line with PR2 requirements and UEDAS have recently confirmed a collective bargaining agreement was recently signed between UEDAS and the union representing the employees.
UEDAS confirmed that it is currently assessing building and premises under their control to assess seismic risks, and where necessary these structures are being improved or reconstructed. Contractor management arrangements within UEDAS include standard OHS and environmental clauses in contracts, although these arrangements would benefit from further development to ensure improved performance monitoring of contractors. A land acquisition policy framework has been developed and UEDAS confirmed there has been no physical displacement. Expropriation is associated with electrical network poles and confirmed to be a small area. During the lenders site visit, a number of local community representatives whose communities were previously affected by land acquisition, were consulted. Generally, no issues or concerns were raised during the consultations with local community representatives. Positive feedback was shared to lenders during the site visit related to the ongoing network upgrade, with the community recognising the improved service performance. Further areas identified during ESDD requiring development include occupational health and safety, biodiversity and hazardous substance management, traffic management, access to information and stakeholder engagement.
A comprehensive environmental and social action plan (ESAP) has been developed and agreed with UEDAS. The ESAP has been structured to bring UESDAS into compliance with the Banks Performance Requirements (PRs). The ESAP includes further development of the E&S management arrangements and includes the requirement to undertake a biodiversity assessment, further development of contractor management arrangements including OHS and environmental management plans and cascading these to contractors, finalisation and implementation of land acquisition procedure. HR procedures are to be further developed and the enhanced or trainings to workers and contractors, and the continued implementation of UEDAS equal opportunities plan. The development ofKey Performance Indicators (KPIs) for monitoring of E&S performance will also be developed. A stakeholder engagement plan has been developed and will be implemented by UEDAS. An independent lenders adviser will be appointed to monitor project progress and report to Lenders periodically in additions to the requirement to report to the EBRD annually on E&S matters.
Technical Cooperation and Grant Financing
The Bank will provide support the Borrower by contracting specialised consultants to support the inclusion related work streams.
Company Contact Information
+90 224 600 00 00
Cirpan Mah. Stadyum Cad. No: 40 Osmangazi / BURSA/ Türkiye
PSD last updated
01 Nov 2023
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