Aydem Renewables Green Bond (f. Project Vega)

Location:

Turkey

Project number:

53042

Business sector:

Energy

Notice type:

Private

Environmental category:

B

Approval date:

21 Jul 2021

Status:

Signed

PSD disclosed:

09 Aug 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

USD 75 million subscription in the USD 750 million, 5.5-year green Eurobond issued by Aydem Yenilenebilir Enerji A.S. (the "Company"), a leading renewable energy company in Turkey.

This is the first green bond issued by the Company, underpinned by its newly developed Green Financing Framework aligned with Green Bond Principles 2021 and Green Loan Principles 2021, as validated by an independent second party opinion.

Project Objectives

The Eurobond proceeds will be used to refinance all existing company debt and for general corporate needs.

Transition Impact

ETI score: 64

ETI score: 64

The Transition Impact arises from the Green and Inclusive qualities:

Green - The proposed investment is in an independently certified Green Eurobond.

Inclusive - The Company will contribute to the revision of Early Childhood Care and Education regulations and develop and implement an internship programme focused on women, to provide accredited green skills across predominantly smaller and more remote cities in Turkey.

Client Information

AYDEM YENILENEBILIR ENERJI AS

The Company is a private Turkish renewable energy company with a 1 GW operational portfolio of predominantly hydro (84% of capacity) and wind power plants (15% of capacity) (remainder: 1% biogas / geothermal), and is one of the largest privately owned IPPs in Turkey.  Currently, the Company is majority owned by the Aydem Group with the remainder listed on the Borsa Istanbul.

EBRD Finance Summary

USD 75,000,000.00

Total Project Cost

USD 750,000,000.00

Additionality

The Bank's additionality derives from (i) the conditionalities obtained by the Bank under the Framework Agreement to enhance inclusion and environmental standards, and (ii) supporting the Company's access to the international capital markets in the context of uncertain market conditions.

Environmental and Social Summary

The Project is Category B under the 2019 Environmental & Social Policy. This is a Green Bond capital markets transaction and ESDD has been undertaken by way of publically available information, the independent Green Bond certification report and review of information previously provided by the Company. The independent report confirms that the Green Bond Principles have been met and therefore no further due diligence is required.

Notwithstanding, the Company and their advisors have previously engaged with EBRD to enable a comprehensive Environmental & Social Due Diligence ("ESDD") process to be completed. ESDD confirmed a good level of E&S capacity and capability and that the Company's portfolio of wind and hydropower assets are broadly managed in accordance with EBRD's Performance Requirements ("PRs"). Overall, the ESDD confirmed that the Company has the institutional capacity to implement the Bank's PRs.

ESDD concluded that the Company has taken active measures to go beyond minimum requirements of achieving compliance with national requirements and has aligned management systems and procedures with good international practice. None of the portfolio assets assessed are located in sensitive areas with respect to biodiversity or human receptors.  Furthermore, ESDD concludes that no material non-compliances with EBRD's Performance Requirements have been noted. An ESAP has been agreed to confirm continued adoption of good industry practice and continuous improvement. The inclusion of an ESAP goes beyond standard practice for GreenBond transactions and demonstrates the Company's willingness to continue to commit to good E&S governance.

The ESAP includes action items for the Company to continue to build the capacity of the Company's E&S team; adopt metrics and KPIs for achieving good international practice; and developing a number of procedures which are not covered under national requirements and have yet to be adopted in full. The ESAP commits the Company to the disclosure of E&S information in line with the 2019 ESP and the EBRD's hydropower projects Guidance Note. The Company will also strengthen its overall ESG and climate reporting in line with EU recommendations on climate related information disclosure.

Part of the bond proceeds will be used for general corporate needs, including potentially to further grow the renewable energy generation portfolio. Through the involvement of EBRD, the Company has agreed to develop a procedure for the screening and appraisal of all potential and new projects to ensure that any future assets are designed and operated in line with the PRs. In addition, the Company has agreed to regularly review the performance of the existing portfolio, and any additional assets that may be added, through the life of EBRD's involvement.  Should the Company develop any new projects, these will be undertaken in line with the Banks requirements.

Technical Cooperation and Grant Financing

A Gender Inclusive TC, with funding expected from an international donor or the EBRD's Shareholder Special Fund will fall under the pre-approved Gender and Economic Inclusion Framework and will focus on supporting policy dialogue activities on early childhood care and education.

Company Contact Information

Elif Hamlacioglu
elif.hamlacioglu@aydemenerji.com.tr
+90 258 242 27 76
https://www.aydemyenilenebilir.com.tr/
Adalet Mahallesi Hasan Gonullu Bulvari No: 15/1 Merkezefendi – Denizli – Turkey

PSD last updated

09 Aug 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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