Gama Enerji Equity

Location:

Turkey

Project number:

47081

Business sector:

Power and energy

Notice type:

Private

Environmental category:

A

PSD disclosed:

15 Jul 2015

Project Description

The EBRD is considering an equity investment of up to US$ 105 million in Gama Enerji A.S (“GEAS”).

GEAS is 73 per cent owned by Gama Holding A.S (“Gama Holding”) and 27 per cent by International Finance Corporation (“IFC”) and IFC Global Infrastructure Fund (“GIF”).

GEAS owns three wind farms and three hydropower plants in Turkey and is currently building a new combined-cycle gas turbine power plant (CCGT) in Turkey with a capacity of 840 MW. The company also operates a water system in Jordan with a conveyance capacity of 100 mcm/year.

This EBRD investment will support the growth of GEAS’ operational capacity up to 2,000-2,500 MW through new projects with a focus on renewable energy and gas-fired plants. The EBRD will also help with the preparations for a potential IPO in the future.

Transition Impact

The transition impact of the project will be derived from:

  1. Private ownership: presence of IFIs as equity investors will add value and help GEAS tap new investors at a potential IPO, which will promote the equity funding strategy. This will serve as an example to other local medium-sized private companies seeking funding to grow into sizeable owners/operators of power and infrastructure assets.
  2. Setting standards for corporate governance and business conduct: support to GEAS’ strategy to grow its capacity up to 2,000-2,500 MW with a focus on renewable energy generation (hydro, wind, solar) and gas-fired plants, putting in place best industry practices, procedures and environmental standards.

The Client

GEAS is a private power and water company headquartered in Turkey with operational assets in Turkey and Jordan. It operates and maintains two hydropower plants (Lamas, Çakırlar), three wind power plants (Sares, Karadağ and Gök II), holds minority shares for a reservoir type hydropower plant with a capacity of 672 MW (Birecik) and is currently building a 840 MW gas-fired power CCGT plant in Kırıkkale (commercial operation date planned for August 2016). GEAS is also a sole owner of a water supply company in Jordan with a conveyance capacity of 100 mcm/year.

Gama Holding is a private holding company headquartered in Turkey, active in construction, engineering, procurement and construction (EPC) contracting, healthcare concession, energy generation and trading. Through its 19 subsidiaries and 20 joint ventures, the group is present in Turkey, Europe, the Middle East, south-east Asia and north Africa.

EBRD Finance

An equity investment of up to US$ 105 million in GEAS.

Project Cost

Up to US$ 105 million.

Environmental Impact

Category A (2014 ESP). The Bank has been requested to provide equity financing to a power company operating and developing a number of medium-sized hydro and wind projects and a large gas-fired CCGT power plant in Turkey. The company’s projects range from small scale wind power projects (10 MW and upwards) to the 672 MW Birecik hydroelectric power plant on the Euphrates River, as well as the large 840 MW İç Anadolu CCGT project and large Disi water conveyance project in Jordan operational since 2014. None of the project sites are located in or near to protected areas.

The use of proceeds is for the acquisition of GEAS’ shareholding and the financing of a partially constructed 840 MW CCGT plant as well as potential future renewable projects.

In line with the EBRD’s Environmental and Social Policy and Public Information Policy, the project requires a fit-for-purpose Environmental and Social Impact Assessment (ESIA) to be disclosed of the A-category CCGT power plant for 60 days prior to EBRD board consideration. GEAS’ operations have been previously subject to a due diligence process by the IFC, and IFC has classified the project as A-category, with a disclosure commencing on 15 September 2014. The company has disclosed environmental information on its website.

In accordance with the Bank’s Environmental and Social Policy an equity investment in a multi-sites operation requires an Environmental and Social Due Diligence study (ESDD) of the company's operations to be carried out in addition to the ESIA disclosure of the A-category project. 

EBRD has undertaken an ESDD which included the assessment of GEAS’ Environmental and Social (E&S) policies, procedures, and practices against the EBRD’s Performance Requirements (PRs). The scope of the EBRD’s review comprised the following activities: (i) review of corporate E&S management systems; (ii) review of project planning documentation prepared for project approvals/permits, primarily consisting of Environmental Impact Assessments (EIAs) for existing projects including İç Anadolu CCGT project and Disi groundwater extraction and conveyance project; (iii) review of project monitoring reports; and (iv) field visits, including on-site discussions with project staff.

The ESDD has confirmed that the company has the capacity to fully implement the Bank’s Performance Requirements and has a good and robust environment, health and safety (EHS) management system. The ESDD also confirmed that the new CCGT plant is designed to recognized industry standards, incorporating safe operating features and the project is structured to comply with the Bank’s Environmental and Social Policy.

The ESDD, among others, identified the need for additional strengthening of corporate EHS management systems and procedures. Based on the ESDD, a corporate Environmental and Social Action Plan (ESAP) has been developed and agreed with the company. This builds on a previously developed environmental and social action plan with IFC and allows the project and future operations to be structured to comply with the Bank’s performance requirements as well as EU environmental standards in addition to IFC’s Performance Standards.

It should be noted that GEAS plans to develop new renewable energy projects in the future, some of which may be Category A under separate financing agreements. For these projects the company will need to develop appropriate corporate standards in line with the EBRD’s performance requirements. The EBRD will monitor the projects throughout the construction and operation, and the company will submit regular reports on the status of each requirement in the Environmental and Social Action Plan.

An environmental and social impact assessment is available for this project

Technical Cooperation

None.

Company Contact

Doruk Bilge Tuncer, EHS Manager

dtuncer@gamaenergy.com

+90 312 248 46 00

Gama Building Nergis sok. No:9

Sogutozu Ankara, 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.