VakifBank - DPR

Location:

Turkey

Project number:

47070

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Target board date:

26 Nov 2014

Status:

Repaying

PSD disclosed:

18 Dec 2014

Translated version of this PSD: Turkish

Project description:

The EBRD has invested US$125 million in the existing diversified payment rights (DPR) programme of Turkiye Vakiflar Bankasi T.A.O. (“Vakifbank”), the 7th largest bank in Turkey by asset size. The loan notes are backed by specifically defined foreign currency denominated payment orders of Vakifbank. This new DPR issuance is rated A- by Fitch.
 
The project is part of the “Finance and Advice for Women in Business” programme, a comprehensive dedicated initiative in Turkey targeting women-led SMEs. US$ 30 million of the funds of this project will be allocated to the programme. Its ultimate goal is to develop a strong women-led SME sector in Turkey by encouraging women’s participation in business, facilitating their access to finance and providing advice to women-led SMEs.
 
US$ 95 million will be used to finance SMEs operating in agribusiness in the priority regions. EBRD supports Vakifbank’s lending operations in the agribusiness sector in Turkey and its commitment to expanding agribusiness lending to SMEs particularly in the priority regions and to growing the share of agriculture SME lending in relation to its total operations.

Transition impact:

Under the “Finance and Advice for Women in Business” programme, transition impact will stem from (i) market expansion which will be achieved by increasing the availability of financing for women-owned and women-managed SMEs in Turkey; (ii) financing women-led SMEs through the introduction of new products and processes tailored to cater to the needs of these SMEs which demonstrates that it is not only commercially viable and profitable, but also scalable and replicable; and (iii) transfer of skills by providing capacity building, product development and marketing outreach support.
 
Under the agricultural lending component, transition impact will stem from market expansion by providing medium term financing to Vakifbank to help it prioritise the SMEs operating in agribusiness sector through its networks in the regions.

The client:

Vakifbank is the 7th largest bank by assets and the 3rd largest state-controlled bank in Turkey, with total assets of €52.9 billion, translating into a market share of 7.6 per cent and capital of €4.8 billion. The company is currently rated Baa3 by Moody’s and BBB- by Fitch.

EBRD finance:

US$ 125 million investment grade-rated loan notes.

Total project cost:

US$ 500 million

Environmental impact:

Categorised FI. Vakifbank is implementing the Bank’s Performance Requirements (PR), specifically PR2, Labour and Working Conditions, and PR9, Financial Intermediaries, under the existing MSME credit line and is applying the EBRD’s Environmental and Social Procedures for Small and Micro Loans. Vakifbank is submitting satisfactory annual environmental and social reports to the Bank and will be required to apply the environmental and social requirements for this project.

Technical cooperation:

Under the “Finance and Advice for Women in Business” programme, the EBRD’s investment will be supported by a comprehensive Technical Cooperation (TC) programme focusing on institutional capacity building, product development and marketing and outreach activities to build Vakifbank’s capacity to reach out to women-led SMEs. The TC will be funded jointly by the EU’s Instrument for Pre-Accession Assistance and the Turkish Ministry of Labour and Social Security.
 

Company contact:

Turkiye Vakiflar Bankasi T.A.O.
Mr. Mustafa Turan, Senior Vice President
Tel: +90 212 - 316 7500 Fax: +90 212 - 316 7126
 

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