Translated version of this PSD: Turkish
The EBRD is considering providing a total of EUR 75 million to DenizBank for on-lending to small and medum-sized and lower-end mid-cap enterprises operating in the agribusiness sector.
The project aims to increase DenizBank’s agricultural lending portfolio through the provision of long-term funding as well as access to finance for start-ups and complex investment projects in the sector.
The agribusiness sector in Turkey remains an under-served segment with a relatively low proportion of overall banking credits. The project will generate transition impact by demonstrating and promoting the benefits of expansion of commercially priced agricultural lending and access to finance for start-ups and complex investment loans in the agribusiness sector.
There is also the potential for demonstration effect and skills transfer to the banking sector pertaining to the analysis and structuring of agricultural investment loans.
The project will also aim at raising the environmental, health and safety standards aligning the internal policies of the private banking sector with EU regulations in regards to animal welfare as well as increased health and safety standards.
DenizBank is the eighth largest bank in Turkey by total consolidated asset size. It is 99.85%-owned by Russia’s Sberbank, following the acquisition of shares from Dexia SA (“Dexia”) in September 2012. DenizBank is a full-service universal bank with its main business lines in retail, SME and corporate banking and its strategy is focussed on further developing its retail and SME business. Financing of primary agricultural activities is a strategic focus of the bank.
The financing will be provided in two tranches (EUR 50 million and EUR 25 million, respectively) and on the basis of either i) investment in rated Diversified Payment Rights (DPR) bond notes; ii) a senior unsecured loan; or iii) investment in a TRY-denominated SME asset-guaranteed bond (AGB).
Up to EUR 75 million.
The project is screened FI as this project involves the provision of finance to financial intermediaries.
DenizBank will be required to comply with the PRs for Financial Institutions (specifically, PR2: Labour and Working Conditions and PR9: Financial Intermediaries). DenizBank will ensure sub-projects under the Facility are compliant with national environmental, social, health and safety and labour regulations as well as the EBRD’s E&S eligibility criteria for sub-projects.
The bank will also be required to adhere to the EBRD's Environmental and Social Exclusion and Referral Lists, and submit annual environmental and social reports to EBRD.
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