Turkey - Mid-Size Sustainable Energy Financing Facility

Location:

Turkey

Project number:

41955

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Approval date:

14 Dec 2010

Status:

Approved

PSD disclosed:

04 Nov 2010

Sub-projects signed under this framework

Translated version of this PSD: Turkish

Project Description

The EBRD launched a framework operation on 14 December 2010, valued at up to EUR 400 million, under which the Bank provides funding to at least four commercial banks in Turkey for on-lending to private sector borrowers for mid-size energy efficiency, renewable energy and waste-to-energy investments (MidSEFF).

This MidSEFF framework operation includes EUR 300 million senior loans/DPR programmes and EUR 100 million of EBRD direct risk participation in select sub-projects. An additional EUR 300 million of co-financing is anticipated from other multilateral or bilateral financing institutions.

Following the successful co-operation with the first three commercial banks under the Mid-SEFF, the EBRD will launch an extension framework operation (MidSEFF II) of EUR 300 million under which financing will be provided by EBRD to up to three commercial banks in Turkey, for on-lending to private sector borrowers for mid-size renewable energy (RE), waste-to-energy (WtE) and industrial energy efficiency (EE) investments. This extension is sought in order to increase the scale and market impact of current operations and further encourage partner banks and project sponsors to comply with higher standards of environmental preparedness of mid-size renewable energy investments (maximum individual Sub-loans up to EUR 40 million).

Transition Impact

The Project generates transition impact by promoting the acceleration and scale-up of sustainable energy investments, including diversification of technologies in Turkey.

The Project also promotes new financing mechanisms through the expansion and development of the voluntary carbon market in Turkey, by assisting project sponsors and the participating financial institutions to monetise the carbon credits arising from their sustainable energy investments.

The Project will transfer and build expertise, among financial institutions, project sponsors and local advisory companies, related to the technical and financial assessment of energy efficiency and renewable energy investments.

In addition, the Project promotes and builds capacity for the performance of best-practice environmental and social due diligence for renewable energy, municipal waste-to-energy investments and carbon markets. This will also contribute to enhanced corporate governance amongst financial inistitutions and sub-project sponsors.

 

The Client

Clients of the facility will be up to 7 commercial banks in Turkey. Clients are selected from leading commercial banks with the institutional capacity and commitment to successfully expand a business line in sustainable energy investments as one of their priority areas. As of December 31th 2011, four agreements have been signed with Garanti Bank, Vakifbank, Deniz Bank and AkBank for EUR 525 million. YKB was the first bank under the extended Facility with IsBank and FinansBank expected to be included as additional banks in MidSEFF II during 2012.

EBRD Finance

The original Framework consisted of EUR 300 million in unsecured senior loans or loans secured by current and future remittances, to be accompanied by EUR 100 million of direct Risk Participation agreements.

Under the extended framework EUR 225 million will be provided as EBRD exposure to commercial banks (either through unsecured senior loans or securitised DPRs programmes and will be complemented by EUR 75 million of EBRD direct risk participation in selected sub-projects. Direct participation will be administered under Risk Participation Agreements (RPAs) with the same commercial banks.

Project Cost

MidSEFF I EUR 400 million.
Extension (MidSEFF II) EUR 300 million.

Environmental Impact

Categorised FI (2008). All participating banks are required to comply with the EBRD's Performance Requirements for FIs (specifically, PR2 and 9) and adhere to the EBRD's Environmental and Social Exclusion and Referral Lists and submit Annual Environmental and Social Reports to the EBRD. An independent Project Consultant is in place to ensure that sub-loans comply with the national environmental, health and safety legislation requirements and the EBRD's eligibility criteria for hydropower and wind power projects.

Technical Cooperation

The Facility is currently supported by a comprehensive technical assistance programme to provide implementation support to participating banks and project sponsors. Funding for the TC programme is provided under the current EC IPA 2009 funding allocation to EBRD EE (TurSEFF and MidSEFF) operations (up to EUR 3.967 million of EUR 7.7 million EE window allocation).

In addition to the Project Consultant’s role to support the preparation and appraisal of sub-projects for MidSEFF, a separate Carbon Finance Consultancy assignment will be contracted for the Facility including this extension for a total of EUR 1.95 million (funded by EBRD Shareholders Special Fund), to support the development of the voluntary carbon market in Turkey by assisting sub-borrowers under the MidSEFF to structure and register their carbon transactions and to build the capacity of participating banks to participate in the monetisation of carbon credits as a new business line.

Company Contact

Oksana Pak
E-mail: pako@ebrd.com

 

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

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Text of the PIP

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