Enerjisa Enerji – Bond

Location:

Turkey

Project number:

49201

Business sector:

Power and energy

Notice type:

Private

Environmental category:

B

Approval date:

11 Jul 2017

Status:

Signed

PSD disclosed:

02 Aug 2017

Translated version of this PSD: Turkish

Project Description

The Bank has subscribed TRY 100 million (EUR 24 million) in Enerjisa Enerji A.S.'s ("Enerjisa Enerji") latest TRY 335 million (EUR 80 million) local currency bond issuance. This issue is part of the company's TRY 1,000 million (EUR 240 million) bond programme as approved by the Capital Markets Board of Turkey.

Project Objectives

Successful placement of the CPI-linked 5-year bond supports Enerjisa Enerji to diversify its funding sources, hedge its exposure to Turkish inflation, and align the tenor of its financings with the horizon of its investments. The Bank's participation is expected to assist in increasing the average tenor of bond issuances in the corporate bond market and mobilise investor interest for future bonds.

Transition Impact

The EBRD's investment is in line with the objectives of its Local Currency and Local Capital Market Development Initiative to promote the development of capital markets in countries where it invests. The project's transition impact stems mainly from the following key areas which are set under the TRY Corporate Bond Framework:

  • Resilience: the Project (as a subproject under the Framework) aims to show the viability of the local currency bond financing for a broader range of Turkish corporates. While the Turkish corporate sector is well versed in bank financing, bond financing particularly for non-financial institutions and with longer tenors, is relatively scarce in comparison with the size and potential of the market. Diversifying funding sources and lengthening of their tenors will ultimately strengthen the resilience of Turkish corporates and make them less susceptible to potential turmoil in the banking sector.

    The introduction of floating rate indices and related products, coupled with longer tenors, will attract more institutional and international investors, thus broadening the investor base. Together with the increase in the number and volume of corporate issues, this will help to further develop Turkish capital markets and anchor its viability as an alternative source of funding for the Turkish corporate sector.

Client Information

ENERJISA ENERJI AS

Enerjisa Enerji is the largest group in Turkey with activities in electricity distribution and retail. The Company is equally owned by Sabanci and E.ON, which also own other companies operating in the electricity sector in Turkey therefore being one of the leading players in Turkey's Energy Market with activities diversified across the energy value chain from generation to distribution. The Turkish conglomerate Sabanci Holding and the German utility E.ON S.E. are both very experienced and strong sponsors operationally and financially.

EBRD Finance Summary

TRY 100,000,000.00

Total Project Cost

TRY 1,000,000,000.00

Environmental and Social Summary

Category B (2014 ESP): Due to the nature of and rules for capital market transactions, the Bank was not in a position to undertake detailed or specific environmental and social due diligence (ESDD) in accordance with the Bank's Environmental and Social Policy before the bond issuance.

Nevertheless, a fit for purpose ESDD was undertaken focusing on reviewing corporate policies, management systems and procedures via questionnaires and discussions with the company's management. In addition to the use of questionnaires, ESDD also drew upon E&S documentation provided by the company in relation to its HSE, labour and land acquisition policy and practices.

Overall, 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. These systems will be certified to international standards including ISO 14001, and OHSAS 18001 and applied in each subsidiary company (three energy distribution companies under EEDAS). Projects that are operated by the subsidiary companies have their own management systems while construction projects use Group HSE requirements and standard company procedures. The company makes use of various contractors and includes HSE and social/labour provisions in all tenders and contracts. This is supported by inspections and audits by the subsidiary companies managed by a central HSE unit of EEDAS.

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 workers are unionised and subject to the conditions agreed under Collective Labour Agreement and Labour Code of Turkey and Sabanci Group HR Policy and procedures. Occupational Health and Safety (OHS) provisions, including procedures, training and worker performance are generally aligned with PR4 requirements although some improvements are required with respect to improvement of OHS performance within the supply chain. The Company will be required to conduct regular inspections/audits and provide more HSE training to its contractors through distribution companies. The company has a competent communications department and discloses information through
various channels about company operations such as its website. Company has an advanced Complaints and Demands Mechanism for customers and stakeholders are easily able to contact the company to raise concerns. The company will be required to formalise these activities in a corporate stakeholder engagement plan, which can be revised and tailored to specific projects. As part of its Corporate Social Responsibility programme, the company will continue to conduct energy efficiency awareness raising activities in the regions of operation.

An ESAP has been developed to bring the company in line with the Bank PRs and has been agreed with the company. Key ESAP actions requires the company to develop and implement an Environmental Management System (ISO 14001) and Occupational Health and Safety Management System (OHSAS 18001) certifications and consider a long term programme to reduce energy consumption and energy efficiency at all operational sites; develop and implement an E&S Aspect and Impact Analysis procedure to define how projects will be screened/categorized and E&S impacts will be assessed on a site-by-site basis; introduce contractor environment, health and safety (EHS) reporting and regularly review supply chains; continue to implement measures to avoid community impacts and implement community safety campaigns; Update the existing Corporate Land Acquisition procedure to acknowledge the rights of informal users in line with the expropriation law; update HR policy and procedures in line with PR 2 requirements; include "Employee Grievance Mechanism" as a requirement for all Contractors working for EEDAS and its subsidiaries; develop and implement a Stakeholder Engagement Plan (SEP), and continue to disclose non-financial data through Sabanci Group's Sustainability Reports.

The company will be required to submit annual E&S reports to the Bank.

Technical Cooperation

None.

Company Contact Information

Aysegül Öcal
ENERJISA_FINANS@enerjisa.com
+90 212 385 8861
Sabanci Center Kule-2 4.Levent, 34330, Istanbul, Turkey

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP 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. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.