Vakifbank II - TurSEFF II

Location:

Turkey

Project number:

48655

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Target board date:

20 Jul 2016

Status:

Signed

PSD disclosed:

27 Jul 2016

Translated version of this PSD: Turkish

Project Description

The EBRD has approved EUR 50 million (or its USD or TRY equivalent) financing to Turkish lender Vakifbank under the Turkey Sustainable Energy Financing Facility Framework Ext I (TurSEFF II). This is a follow-up transaction with Vakifbank under TurSEFF II and builds on the company's successful track record in on-lending funds to private sector borrowers for energy efficiency and small-scale renewable energy investments. The project can be funded through a range of financing instruments, including but not limited to senior notes issued under the company's existing Diversified Payment Rights programme or residential mortgage covered bonds.

Project Objectives

TurSEFF II aims to have a transformational impact in addressing climate change challenges in Turkey in three critical areas: (i) enhancing energy security by improving energy efficiency in key sectors of the economy, specifically targeting SMEs; (ii) supporting a clean energy transition by reducing reliance on fossil fuels and focusing on meeting energy needs in an environmentally sustainable manner, thereby reducing GHG emissions; and (iii) increasing private sector involvement in the development and financing of energy efficiency and renewable energy investments.

Transition Impact

Under TurSEFF II, transition impact will stem from: (i) commercial energy efficiency financing with focus on SMEs; (ii) expansion of sustainable energy markets, including increased penetration of low-carbon technologies; and (iii) market-supporting behaviours, skills and innovation including the transfer and dispersion of skills to banks and sub-borrowers and long-lasting internal capacity building.

Client Information

TURKIYE VAKIFLAR BANKASI T.A.O.

Vakifbank, listed on Borsa Istanbul, is a full-service commercial and retail bank in Turkey with a wide regional network. The company is a quasi-state-owned entity as it is indirectly majority-owned (58.5%) by the General Directorate of Foundations, a governmental institution. 16.1% are owned by the employees' pension fund and another 25.2% are publicly traded on Borsa Istanbul. Vakifbank is the seventh largest commercial bank by assets and the third largest state-controlled bank in Turkey and is currently rated Baa3 by Moody's and BBB- by Fitch.

EBRD Finance Summary

EUR 50,000,000.00

Total Project Cost

EUR 50,000,000.00

Environmental and Social Summary

Categorised FI. Vakifbank will be required to comply with the EBRD's Performance Requirements 2, 4 and 9, apply the EBRD's environmental and social risk management procedures for SME loans and ensure sub-borrowers financed under TurSEFF comply with national requirements for environment,
health, safety and labour standards. Vakifbank will submit annual environmental and social reports to the EBRD.

Technical Cooperation

TurSEFF II is supported by a comprehensive technical cooperation programme of EUR 5.4 million to provide implementation support to participating financial institutions and sub-borrowers. Funding is provided by the EU, initially from the EU/EBRD SME Finance Facility (2006 sub-account) and since
July 2015, from the Instrument for Pre-Accession Assistance (IPA) agreement "Enhancement of Turkish Energy Sector in line with EU Energy Strategies".

Company Contact Information

Mr. Mustafa Turan, Senior Vice President
Mustafa.TURAN@vakifbank.com.tr
+90 212 316 7500
+90 212 316 7126
http://www.vakifbank.com.tr
Camlik Caddesi, Cayir Cimen Sok. No:2 Kat:6 1.Levent 34330, Istanbul, Turkey

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