YDA Bond Project

Location:

Turkey

Project number:

47021

Business sector:

Transport

Notice type:

Private

Environmental category:

B

Target board date:

26 Nov 2014

Status:

Complete

PSD disclosed:

17 Dec 2014

Translated version of this PSD: Turkish

Project description

The Bank has subsribed to TL 40 million (€14 million equivalent) of a TL 200 million bond issue by YDA İnşaat Sanayi ve Ticaret (YDA). This senior unsecured Turkish lira-denominated bond has a three-year tenor.
 
The proceeds from the Bank’s participation are envisaged to go towards YDA’s equity commitment under the Dalaman Airport concession project. The remaining proceeds of the bond are expected to be used to support other recently awarded infrastructure PPP projects.

Transition impact:

The transition impact of the project is derived from the following:
 
(i) The issue of a three-year local currency bond by a construction company will contribute to the development of the local currency capital markets in Turkey by encouraging institutional investors to extend maturities and other companies to diversify their sources of funding by accessing the local bond market.
(ii) The Project will support improvements in YDA’s corporate governance standards. The Company will implement a corporate governance action plan based on best practices. It is expected to have a strong demonstration effect for similar firms in the Turkish market, encouraging them to improve their standards.

The client:

YDA İnşaat Sanayi ve Ticaret A.Ş. (YDA) is a joint stock company incorporated in Turkey. YDA is the construction & contracting arm of the Turkish conglomerate YDA Group, which is expanding its role as a concessionaire for development and operation of infrastructure assets under PPP arrangements. In addition to construction, with its associates, YDA is also engaged in aviation (via Dalaman Airport in Turkey and Aktau Airport in Kazakhstan), hospital facilities management under PPP schemes, agriculture, geothermal energy, medical, smart outdoor advertising and service sectors. The company is an active player in the Turkish hospital PPP projects with its vast experience both in construction of hospital infrastructure and in facility management. Recently awarded PPP projects include Dalaman Airport and the Integrated Health Campuses of Kayseri, Konya and Manisa.

EBRD finance:

EBRD is participating in the amount of TL 40 million (€14 million equivalent) in the three-year TRY 200 million senior unsecured bond.

Total project cost:

TL 200 million (€70 million equivalent).

Environmental impact:

Categorised B. The environmental and social (E&S) issues associated with the YDA bond issue are expected to be limited. Due to the general corporate finance nature of the project, Environmental and Social Due Diligence (ESDD) focused on reviewing corporate policies, management systems and procedures via questionnaires and discussions with the company’s management. In addition to the use of questionnaires, ESDD also drew upon E&S documentation provided by the company in relation to its Dalaman Airport new domestic terminal project.
 
ESDD showed that the company has in place various management systems, procedures and associated capacities to appropriately manage the impacts and risks associated with its activities. These systems are certified to international standards including ISO 14001, OHSAS 18001 and ISO 9001. Company management systems and procedures are in place at a corporate level and are then applied and tailored to individual projects. Projects that are operated by the company have their own management systems while construction projects use E&S action plans and standard company procedures. The company undertakes Environmental and Social Impact Assessments (ESIAs) aligned with the international standards for all its PPP projects (generally major construction projects), even if exempted from EIA by the relevant authorities. The company makes use of various contractors and includes E&S provisions in all tenders and contracts. This is supported by inspections and audits by the company.
 
The company’s HR policies and procedures are in line with Turkish legislation and the EBRD’s Performance Requirement (PR) 2. Women are employed at all levels of the company but with particular focus to professional and administration roles noting the nature of the company’s business. There is the opportunity to increase women in management positions and this has been included in the ESAP. Occupational Health and Safety (OHS) provisions, including procedures, training and worker performance are generally aligned with PR2 requirements although some improvements are required with respect to contract OHS performance reporting. The company undertakes limited consultation and discloses information through ESIA processes and via its website. Stakeholders are able to contact the company to raise concerns. The company will be required to formalise these activities in a corporate stakeholder engagement plan, which can be revised and tailored to specific projects.
 
An ESAP has been developed to bring the company in line with the PRs and has been agreed with the company. Key ESAP actions requires the company to: define specific environmental and OHS organisation structure for each project with clear reporting lines; develop a standalone equal opportunities and non-discrimination policy; promote women in management positions; introduce contractor environment, health and safety (EHS) reporting and review supply chains; develop EHS key performance indicators; develop and implement measures to avoid community impacts; and develop a corporate stakeholder engagement plan. The company will be required to submit annual E&S reports to the Bank.

Technical cooperation:

None.

Company contact:

A. Türkekul Doğan - Head of Corporate & Project Finance
Tel: +90 312 459 4444; Mobile: +90 530 312 2678
Email: turkekul.dogan@yda.com.tr
 
 

Business opportunities

For business opportunities or procurement, contact the client company.

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