Project Description
The transaction is a primary direct equity investment of EUR 9.8m into the share capital of Turk Elektronik Para A.S. ("Param"). Other investors include CCL Investments SaRL ("CEECAT Capital"), a private equity fund focused on Emerging Europe, Alpha Associates and Revo Capital, with total financing amount of EUR 27.2m.
The investment is part of total equity investment by EBRD of EUR 13.7m, into Param Group, including Param and Turk Finansman A.S. ("Kredim"). Total amount raised by Param Group is EUR 38m.
Project Objectives
The investment will enable Param to support future growth, develop technology, marketing and HR.
Transition Impact
ETI score: 67
Competitive: Investing in expansion of Param Group will support a number of operational changes and the launch of new products. Param Group aims at providing digital and open banking services in the near future, leading to competitiveness improvements.
Well-Governed: Substantial improvement in financial management in the context of equity co-investment alongside a private equity fund, including hiring of the CFO and other key financial positions, audit by Big 4 firm. Improvement in corporate governance will be implemented, including adding an independent board member, adding board observer for each new investor, new Corporate Governance Committee.
Client Information
TURK ELEKTRONIK PARA
Param is a leading independent non-bank Payment Service Provider ("PSP") with a 22% market share and e-Money company in Turkey, serving large corporate merchants facilitating on-line transactions. Param is present across the entire payments value chain (card issuing, acquiring, and processing) and has strong in-house technical capabilities providing significant competitive advantage. Deep technical know-how, fully in-house software and product development capabilities enable rapid product deployment.
Param started in 2013 as a prepaid card provider for lawyers and professionals. At the onset of Covid-19 crisis, the company made significant investments in technology infrastructure and launched a new strategy to focus on large corporate merchants.
EBRD Finance Summary
Direct equity investment of EUR 9.8m
Total Project Cost
Direct equity investment of EUR 9.8m
Additionality
The project is additional because it represents the first institutional funding experience of Param Group and will result in strengthening of its corporate governance. Param Group is gradually transforming itself into a leading national player with regional aspirations and preparing for future institutional financing rounds and a possible IPO. The investment supports quick pace of company's growth as well as high female representation in senior managerial positions and is in line with EBRD's Strategy for the Promotion of Gender Equality.
Environmental and Social Summary
Categorised C (2019 ESP). Low risk. Environmental and Social Due Diligence (ESDD) was carried out by ESD and included the review of Environmental & Social (E&S) Questionnaire. Direct equity co-investment (representing up-to 7.5% stake in Param) in a payment services provider and e-money company for financing acquisition of software is unlikely to be associated with significant environmental risks and impacts. Based on the ESDD, Param Group employs 106 people, they have been currently working on the establishment of ISO 14001, ISO 45001 and corporate responsibility management systems, and their certification is in progress. Param Group is in compliance with relevant environmental, health and safety national law. For the project, Param Group is required to ensure that its operations continues to comply with EBRD PRs as well as human resource policies and labour management, data protection, cyber and information security, stakeholder engagement and grievance mechanism and provide an annual environmental and social report to the Bank. No additional ESDD is required. Equity investments are not included within the scope of the current methodologies for Physical Climate risk assessment or Paris Alignment. The project has no GET component.
Technical Cooperation and Grant Financing
N/a
Company Contact Information
Ebru SOGUKPINAR
pazarlama@param.com.tr
+90 (552) 964 07 98
www.param.com.tr
Prof. Dr.Ahmet Taner Kislali Mh.2405.Sok.No:5 Cankaya/Ankara/TURKEY
PSD last updated
08 Sep 2022
Understanding Transition
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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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.
