Translated version of this PSD: Turkish
A senior loan of the equivalent in Turkish lira (TL) of USD 110 million to Osmangazi Elektrik Dagitim A.S (OEDAS), the electricity distribution company of the Osmangazi region (inner western Anatolia, Turkey), which includes five provinces: Afyonkarahisar, Bilecik, Eskisehir, Kutahya and Usak.
The company is owned by Zorlu Enerji Elektrik Uretimi A.S. (Zorlu Energy) through a subsidiary, Zorlu Osmangazi Enerji Sanayi ve Ticaret A.S. (Zorlu Osmangazi), and serves around 2.6-2.7 million people in 194 towns and 1,596 villages.
The loan is part of a financing package worth the TL equivalent of USD 690 million. The TL equivalent of USD 360 million was provided in 2017 by Zorlu Energy in form of equity to acquire OEDAS and Osmangazi Elektrik Perakende Satis A.S. (OEPSAS), the electricity retail firm. The rest of the package will be provided in debt financing, in local currency, by a group of international
financial institutions, including the EBRD, and commercial banks.
The EBRD loan will finance the capital expenditure investments required by Turkey's Energy Market Regulatory Authority for the five-year regulatory period between 2016 and 2020. These include the upgrade, modernisation and expansion of the distribution network in the Osmangazi region.
The project targets the "inclusive" and "green" qualities.
Inclusive: The Bank will work with OEDAS to help the company ensure that women and men are able to equally access employment and career opportunities, and accede to the UN Women's Empowerment Principles (WEP), recognizing OEDAS adoption of international best practices and policies regarding equal opportunities.
Green: The investment programme will involve upgrading and expanding the existing network and modernising customer metering. This will reduce supply losses and outages, and will lead to incremental annual CO2 savings.
OSMANGAZI ELEKTRIK DAGITIM AS
OEDAS is owned since 2017 by Zorlu Osmangazi, a company founded in 2016 by Zorlu Holding A.S. as a 100 per cent subsidiary of Zorlu Enerji.
OEDAS is the incumbent for the distribution of electricity in the Osmangazi region which includes five provinces covering a c. 50,000 km2 area, Afyonkarahisar, Bilecik, Eskiiehir, Kutahya and Uiak, with a total population of around 2.6-2.7 million people.
The company has circa 42,000 km of distribution lines and c. 5,000MVA of transformer installed capacity.
EBRD Finance Summary
The equivalent in TRY of USD 110 million.
Total Project Cost
The equivalent in TRY of USD 690 million.
USD 360 million for the acquisition of OEDAS and OEPSAS was fully funded by Zorlu in 2017 and USD 330 million capex investments to be provided by a group of international financial institutions, including the EBRD, and commercial banks.
Environmental and Social Summary
Categorised B (2014 ESP): Independent consultants have been engaged to carry out a comprehensive environmental and social appraisal of OEDAS. This included a review of the company's current Environment Health and Safety (EHS) and labour management systems and an assessment of its operations against EBRD Performance Requirements (PR). The acquisition of the OEDAS by Zorlu also provides an opportunity to improve the company's environmental and social performance.
OEDAS distributes electricity to 2.7 million people in 194 towns and 1,596 villages. The investment programme will involve upgrading and expanding the existing network and modernising customer metering. This will reduce supply losses and outages. Due diligence identified issues including poor waste management practices and gaps in occupational and community safety systems. Actions to address these issues have been included in the Environmental and Social Action Plan (ESAP), along with measures to improve land acquisition and stakeholder engagement in line with EBRD PR.
Agreed actions include upgrading the EHS management systems and appointing an environmental and social team in each province with relevant qualifications and defined roles and responsibilities. The new owners have committed to improving EHS management in line with the ISO14001 OHSAS18001 standards. Occupational Safety and Health (OHS) management improvements will include adopting a corporate OHS policy and introducing an accident investigation and reporting procedure, near miss reporting and job safety analysis. The company will adopt new waste management practices and will take immediate action on removing and disposing existing wastes at all sites.
The project will not require any resettlement of households or businesses and the majority of the investment plan will be carried out on public land in urban locations. Some land acquisition in rural areas may be required and the company has committed to avoiding land take in agricultural areas.
A land acquisition policy framework has been prepared and will be adopted by the company. This defines consultation, compensation and monitoring measure required for any land acquisition, in line with EBRD PR and Turkish law.
EBRD will be monitoring implementation of the ESAP through annual reports provided by the client.
A Technical Cooperation (TC) component of up to EUR 75,000, operated through the EBRD Gender Advisory Services Framework, will be attached to the loan. A 10-15 per cent client contribution is expected. Under the TC, a group of specialised consultants will assist the client in strengthening equal opportunities in its human resources policy and other company policies, with a view to increase the ratio of female to male employees and to enhance career opportunities for women in the company, as well as to address areas which the client considers a priority.
Company Contact Information
+90 212 456 23 00
Levent 199, Büyükdere Cad. No:199, Postcode 34394, Istanbul
For business opportunities or procurement, contact the client company.
EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
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