Investing in EBRD's region: Turkey, June 2017 - Jean-Patrick MARQUET Managing Director, Turkey
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Investing in EBRD’s region:
Turkey, June 2017
Jean-Patrick MARQUET
Managing Director, Turkey
© European Bank for Reconstruction and Development 2015
Contents
1. INTRODUCTION TO EBRD
2. TURKEY MACRO ECONOMIC CONTEXT
3. FINANCIAL INSTITUTIONS
4. INFRASTRUCTURE / PPPS
5. ENERGY & NATURAL RESOURCES
6. CORPORATES: AGRIBUSINESS & GENERAL INDUSTRY
7. CAPITAL MARKETS DEVELOPMENT
8. CONTACTS
© European Bank for Reconstruction and Development 2015 2
What is the EBRD?
International financial institution, promotes
transition to market economies in 36 countries Shareholding structure
from central Europe to central Asia.
€30 bn capital. AAA rating from all three main
rating agencies. Over €41 bn portfolio.
In 2009, EBRD opened its office in Istanbul. Today,
EBRD has offices in Ankara, Istanbul and Japan
Gaziantep. USA 9%
10%
In 2011, the Bank expanded to Egypt, Morocco, Others
Tunisia and Jordan. 11%
EU 28
In 2014, the EBRD welcomed Cyprus. EBRD region Countries (1)
excluding EU 63%
In 2015 it was agreed that the Bank will invest in 7%
Greece on a temporary basis to support reforms
and a return to growth.
In 2016, China became the 67th shareholder of
EBRD.
Results in 2016
€9.4 bn invested in 378 projects
Private sector accounted for 76% share (1) Includes European Community and European Investment Bank (EIB)
each at 3%. Among other EU countries: France, Germany, Italy, and
Debt 87%, Equity 9% the UK each holds 8.6%
© European Bank for Reconstruction and Development 2015 3
Where we invest
© European Bank for Reconstruction and Development 2015 44
EBRD projects span every sector
Manufacturing & Municipal & Environmental Transport
Services Infrastructure
Financial Institutions Natural Resources Telecommunications,
Informatics & Media
Property & Tourism Power & Energy Industry, Commerce
& Agribusiness
© European Bank for Reconstruction and Development 2015 5
EBRD pursues ‘transition’ across 6 qualities
Competitive Well-governed
Promoting the rule of law, transparency,
Building dynamic and open markets that
and accountability, and stimulating firms to
stimulate competition, entrepreneurship and
adequately safeguard and balance the
productivity growth.
interests of their stakeholders.
Inclusive Integrated
Building inclusive market economies which Building geographically integrated domestic
ensure equal economic opportunity for all and international markets for goods,
and leave no group behind. services, capital and labour.
Green
Resilient Building green, sustainable market
Building resilient market economies that can economies which preserve the
withstand turbulence and shocks. environment and protect the interests of
future generations.
© European Bank for Reconstruction and Development 2015 6
EBRD business snapshot
EBRD Global YE2016 EBRD TURKEY YE2016
Number of projects to date 4,723 Number of projects to date 217
Net cumulative Bank investment € 116 bn Net cumulative Bank investment € 9 bn
Private Share 76 % Private Share 98 %
NCBI = Net Cumulative Bank Investment Annual Bank Investment and number of projects
12 120
2500 50
11 110
Annual business investment (ABI)
€ million at reported rates
10 100 45
Net cumulative bank investment
0.97 1.4 0.7
9 1.1 1.2 90 2000 40
8 80 35
7 70
1500 30
6 60
25
5 50
4 8.5 8.2 8.7 40 1000 20
7.4 6.9
3 30 15
2 20 500 10
1 10
5
0 0
0 0
2011 2012 2013 2014 2015 2016
Equity ABI
Annual Bank Investment Annual Number of Projects
Debt ABI (and guarantees)
17% 10% Central Asia 10%
Central Europe & Baltics 15% 16% Financial Institutions 36%
15% Cyprus & Greece 2% 36%
Corporate 29%
8%
Eastern Europe & Caucasus 18% 19%
2% Infrastructure 19%
Russia 10%
South-Eastern Europe 19% Energy & Natural Resources 16%
19% 18%
11% Southern Eastern Mediterranean 9%
Turkey 17% 29%
© European Bank for Reconstruction and Development 2015 7
EBRD priorities in Turkey
OPERATIONAL PRIORITIES (2015 – 2019) DECENTRALISED BUSINESS MODEL
i. Enhancing energy security and 3 offices : Istanbul, Ankara, Gaziantep
sustainability by supporting sector reform, 90 staff on the ground
promoting energy efficiency and
renewable energy Includes: bankers, syndications, lawyers,
engineers, technical assistance specialists
ii. Improving the quality of infrastructure via
commercialisation and private sector
participation CAPITAL MOBILISATION
iii. Scaling up private sector competitiveness
through innovation and improved EBRD’s €9 bn investment in Turkey has
corporate governance additionally mobilised €20 bn in total capital.
iv. Promoting regional and youth inclusion, as “Every EBRD euro is supplemented by €2.3
well as gender equality, to support long- from other sources”
run growth potential
v. Deepening capital and local currency
money markets
© European Bank for Reconstruction and Development 2015 8
Contents
1. INTRODUCTION TO EBRD
2. TURKEY MACRO ECONOMIC CONTEXT
3. FINANCIAL INSTITUTIONS
4. INFRASTRUCTURE / PPPS
5. ENERGY & NATURAL RESOURCES
6. CORPORATES: AGRIBUSINESS & GENERAL INDUSTRY
7. CAPITAL MARKETS DEVELOPMENT
8. CONTACTS
© European Bank for Reconstruction and Development 2015 9
GDP contracted in Q3 2016 but subsequently
returned to growth
The economy posted two consecutive …driven by a rebound in household
quarters of growth since Q3 2016 consumption.
• Strong growth in H1 2016 gave away to contraction of • The recovery in Q4 2016 was driven by government
1.3% in Q3 following the attempted coup in July 2016, expenditure and associated stronger private
giving rise to the first quarterly negative GDP growth in consumption.
Turkey since 2009. • Growth in 2017Q1 exceeded expectations, as
• Subsequently growth picked up in Q4 2016 to generate domestic demand continued to be driven by the
an annual growth rate of 2.9%. positive effects of the government’s measures to
• Growth of 5.0% y/y was achieved in Q1 2017. revive consumption.
© European Bank for Reconstruction and Development 2015 10…with inflation remaining well above the target
Inflation started to rise rapidly in …despite low energy prices.
December…
*Excludes energy, alcoholic and non alcoholic beverages, unprocessed
food, tobacco, and gold. • Inflation target has been persistently missed for
• The pass through of the depreciation of the lira has the past five years, with inflation well above the
driven headline inflation to 5 year heights, reaching 5% target.
almost 12% in April; this should start to moderate over • The CBRT has revised its 2017 inflation
the course of the rest of the year. estimate to 8.5%, this is conservative in the
• Headline inflation has been driven by volatile food context of ongoing weakness of the currency.
prices, although core inflation remains above 9%.
© European Bank for Reconstruction and Development 2015 11Markets have recovered since the start of the year,
reflecting the broader trend in other EMs
Investor sentiment has improved, as …and reflected by lira’s rebound,
evidenced by CDS premia… alongside other EM currencies.
• Turkish CDS rose sharply by around 70 bps in • The lira depreciated substantially against the
the week after the attempted coup on 15 July dollar until end January 2017, it has
2016, and remained volatile for the rest of the subsequently recovered all of its losses.
year. Recently, improved sentiment has helped • Credit rating downgrades reflecting the external
swap rates fall back below pre-coup levels. vulnerability of the economy contributed to the
• Renewed pressure on CDS premia may emerge lira’s underperformance relative to peer
if investor sentiment towards emerging markets emerging market currencies.
deteriorates.
© European Bank for Reconstruction and Development 2015 12Equity markets moved alongside other large
emerging markets peers
Turkish equities have reached record …while non-resident bond holdings
heights… remain low.
• Following a 14% decline immediately after the • Capital inflows have tended to favour equities,
attempted coup, the Turkish equity market although both non-resident equity and bond
stabilised and the BIST 100 has recently attained holdings in dollar terms have increased since the
record highs, reflecting broader trends in start of the year, driven by currency appreciation
emerging market equities. and surging equity prices.
© European Bank for Reconstruction and Development 2015 13While public finances remain stable…
Fiscal balance remains contained… …and public debt remains moderate.
• The budget deficit remained stable at 1.1% of GDP in • Public debt level remains stable, around 30% of GDP,
2016, though it is likely to rise in 2017, driven by providing space for fiscal reaction if needed.
increased government spending and tax cuts. • The majority of public debt is domestic, with around one
third of it held in foreign currencies, mostly dollars.
• The debt has relatively long maturities, particularly the
FX debt, which has an average tenor of 9.4 years while
TRY denominated debt has an average tenor of 5.6
years.
© European Bank for Reconstruction and Development 2015 14…external imbalances are still the key
vulnerability
Current account deficit has been falling … while portfolio inflows have been volatile.
since 2014 on the back of falling oil prices…
• Low oil prices and the weakening lira helped reduce • Overall net portfolio flows recovered in 2016 after
the 12-month rolling CA deficit to around 3.8% of GDP net outflows in 2015, but capital flows have
at end 2016. However, the high share of intermediate intermittently been insufficient to finance the current
imports in Turkey’s exports limits the impact of the account, further eroding the CB’s already weak
exchange rate depreciation on the CA. reserves.
• The external position remains a weakness; the cost of • Portfolio inflows have been increasing steadily since
rolling over external debt plus financing the CA deficit the start of 2017, driven by investor interest in EM
will amount to around 25% of GDP in 2017. equities.
© European Bank for Reconstruction and Development 2015 15Following a loosening trend in 2016, monetary
policy tightened…
Central bank has backtracked from its plans …while reserve requirements for lira have
to shift from a corridor to a single rate... been successively lowered.
• Having cut the overnight lending rate throughout the • The Central Bank has lowered reserve ratios for lira
course of 2016, the Central Bank started to tighten and FX twice since September 2016, aiming to
monetary policy again in November. increase liquidity and support banks’ loan pricing.
• Since January 2017 the Central Bank has pushed up
the average cost of funding by 370bps without raising
policy rates. By progressively reducing funds available
at their auctions, the CB has forced banks to resort to
the late liquidity window, at a punitive rate of 12.25%.
© European Bank for Reconstruction and Development 2015 16…while banking sector still remains broadly
healthy
Most banking sector indicators are at …although loan to deposit ratio remains
comfortable levels… elevated.
• Nonperforming loan (NPL) ratio has edged up recently, • Loans-to-deposits ratio stood at around 125% at
but remains relatively low at around 3.2% in April 2017. end-2017Q1, indicating Turkish banks’ continued
However, the impact of the lira’s depreciation on NFCs reliance on wholesale funding.
with large FX liabilities may impact asset quality. • The structure of debt shifted favorably towards
• An active market for selling NPLs implies that impaired longer-term maturities, although this partly comes
assets are slightly higher than official figures suggest. due to accounting efforts of issuers – issuing at
• Capital adequacy ratios remain around 16%, above tenors only slightly beyond the 1-year threshold.
regulatory requirements.
© European Bank for Reconstruction and Development 2015 17Turkey: Key Macroeconomic Indicators
Source: National authorities, IMF, World Bank and EBRD calculations.
*EBRD forecasts.
© European Bank for Reconstruction and Development 2015 18Contents
1. INTRODUCTION TO EBRD
2. TURKEY MACRO ECONOMIC CONTEXT
3. FINANCIAL INSTITUTIONS
4. INFRASTRUCTURE / PPPS
5. ENERGY & NATURAL RESOURCES
6. CORPORATES: AGRIBUSINESS & GENERAL INDUSTRY
7. CAPITAL MARKETS DEVELOPMENT
8. CONTACTS
© European Bank for Reconstruction and Development 2015 19Financial Institutions
Variety of partners and instruments
Total FI investments in Turkey: > €3.5 bn
Wide coverage of financial products:
- 15/06/2017
Debt (structured, senior secured & unsecured,
sub-ordinated, trade finance)
- Equity
Cooperation with 20 FIs:
- 14 banks
- 5 non-banks (leasing, factoring, asset mgnt)
- 1 stock exchange
Priorities:
- SMEs: regional, agribusiness
- Sustainable energy: Turseff, Midseff, Tureeff
- Inclusion: Women in Business
- Capital markets: bonds, equities
Active policy dialogue with regulators
- BRSA, CBT, CMBT
© European Bank for Reconstruction and Development 2015 20TurSEFF
Small scale EE & RE private sector investments
Loan Breakdown by Technology:
20% Energy Efficiency 80% Renewable Energy
€773 m facility (€42 m from the
Clean Technology Fund)
Launched in 2010
Small investments < €5 m
Sectors:
SME Energy Efficiency
Commercial EE
Residential EE
Small Scale Renewables
Total Avoided oil
Loan Amount Number of Sub- Primary energy Annual GHG savings
Investment (€ imports (€
(€ mln) Projects savings (toe/year) (tonnes CO2eq/year)
mln) mln/year)
271 373 513 174,917 1,294,573 43
15/06/2017 © European Bank for Reconstruction and Development 2015 21MidSEFF
Scaling-up mid-size renewables
€1.5 bn facility, commercially structured
through capital market instruments
Launched in 2011
Medium size investments of €5–50 m
Renewable Energy
Energy Efficiency
Waste-to-Energy
Resource efficiency
+ EU environmental & social standards
+ Support in Carbon Market development
15/06/2017 © European Bank for Reconstruction and Development 2015 22Women-in-Business
Finance & advice for women entrepreneurs
Women
Womenin Business
in Business
Financing
Financing
Dedicated credit lines of up to €300 m to
be provided to partner banks
First loss risk cover of up to €30 m
Technical assistance to partner banks of
up to €3m
Advice for
Women in Business
Business advice and coaching €250m disbursed to 5 partner banks Vakifbank,
Finansbank, Isbank, TEB and GarantiBank
Development services for women-led
SMEs of up to €5 m €160 m allocated to women-led SMEs
Our partner banks
15/06/2017 © European Bank for Reconstruction and Development 2015 231. INTRODUCTION TO EBRD
2. TURKEY MACRO ECONOMIC CONTEXT
3. FINANCIAL INSTITUTIONS
4. INFRASTRUCTURE / PPPS
5. ENERGY & NATURAL RESOURCES
6. CORPORATES: AGRIBUSINESS & GENERAL INDUSTRY
7. CAPITAL MARKETS DEVELOPMENT
8. CONTACTS
© European Bank for Reconstruction and Development 2015 24Social Infra / PPPs
TURKISH PPP HOSPITALS FUTURE SCHOOL PPPS?
29 new hospitals with 42,000 high-quality hospital Replication of the government’s successful Hospital
beds for of up to €14bn. PPP Programme to modernise its existing school
Facility Management only. Clinical services remain infrastructure
with MoH. Process started in 2010, delayed as the Hospital PPP
28.5 years PPPs incl. construction 3.5 years. Programme was prioritized
14 Hospitals have reached financial close with a total An ambitious programme to deliver 40 new education
investment cost of €7.2 bn facility campuses across 16 cities in Turkey
MoEdu was planning to make project packages with a
EBRD INVOLVEMENT AND SUPPORT total size of TL500m each, made up of 4-5 campuses
Framework envelop of €950m (6.7% of the BLT model, MoEdu to make APs and SPs
Programme) debt or equity. Expected contract term: 20 years, after an estimated
Advisory role over 24 months to make the PPP construction period of 2.5 years.
contracts bankable The Bank is expecting the programme to be revived in
Technical cooperation to MoH for Value for Money 2018.
Methodology and PPP Contract Monitoring unit.
To date, 7 projects signed under the Framework with
EBRD INVOLVEMENT AND SUPPORT
an investment of circa (ca. 512m). EBRD offered 2 technical cooperation assignments to
Mobilisation 1.7x EBRD finance. support the PPP programme.
Involvement of various foreign sponsors: Astaldi and
Salini (Italy), Meridiam (France), Samsung (Korea),
Vamed (Austria), Sojits (Japan), General Electric (USA)
© European Bank for Reconstruction and Development 2015 25Case Studies
Social Infra – Etlik Hospital PPP
BORROWER: Ankara Etlik Hastane Saglik Hizmetleri A.S.
SPONSORS: Astaldi (51%) – Turkerler (49%)
T YPE OF PPP CONTRACT: Design – Build – Finance – Lease - Transfer (DBFLT)
PROJECT DESCRIPTION: Design, construction, equipping, financing and maintenance of an
integrated health campus in Adana, Turkey.
NUMBER OF BEDS: 3,566
TOTAL PROJECT COST: €1.1 bn
T YPE OF FINANCE: Project Financing/Senior Loan
EBRD FINANCE: € 125 m A-Loan/€ 131 m B-Loan
DEAL SIGNED: 2015
LENDERS: EBRD, IFC, BSTDB, DEG (A- Lenders) – Credit Agricole, Unicredit,
Banca IMI, Deutsche Bank(B-Lenders) – Isbank, TSKB, Akbank
(Commercial Lender).
IMPACT: The largest public-private project to be financed to date under
the Turkish government’s €14 bn programme to build or expand
about 29 hospitals across the country in collaboration with the
private sector.
The giant complex is expected to deliver better hospital facilities
for the Turkish capital and central Anatolia, a region with about
12 million people.
© European Bank for Reconstruction and Development 2015 26Case Studies
Social Infra – Elazig Hospital PPP
BORROWER: ELZ Saglik Yatirim A.S. / ELZ Finance
SPONSORS: Ronesans (43.75%) – Meridiam (36.25%) – Sila, Sam and TTT
(20%)
T YPE OF PPP CONTRACT: Design – Build – Finance – Lease - Transfer (DBFLT)
PROJECT DESCRIPTION: DBFLT of an integrated health campus in Elazig, Turkey.
NUMBER OF BEDS: 1,038
TOTAL PROJECT COST: €360m
T YPE OF FINANCE: Project Bond
EBRD FINANCE: €89m via two contingent liquidity instruments
DEAL SIGNED: December 2016
LENDERS: Credit enhancers: EBRD and MIGA ; Enhanced bondholders: MUFG,
Siemens, ICBC, Intesa Sanpaolo, Proparco and FMO; Unenhanced
bondholders: IFC
IMPACT: Because of the EBRD’s and MIGA’s innovative credit enhancement,
this transaction has resulted in several first time events, including:
Turkey’s first greenfield project bond
Turkey’s first PPP financing with a 20-year maturity
Turkey’s first “green and social bond”, aligning with the COP21
global commitment to support emerging countries’ Sustainable
Development Goals.
© European Bank for Reconstruction and Development 2015 27Case Studies
Social Infra – Konya Hospital PPP
BORROWER: ATM Saglik Konya Yatirim ve Isletme A.S.
SPONSORS: YDA (100%)
T YPE OF PPP CONTRACT: Design – Build – Finance – Lease - Transfer (DBFLT)
PROJECT DESCRIPTION: DBFLT of an integrated health campus in Konya, Turkey.
NUMBER OF BEDS: 838
TOTAL PROJECT COST: € 548 m
T YPE OF FINANCE: Project Financing/Senior Loan
EBRD FINANCE: € 67.5 m A-Loan/€ 80 m B-Loan
DEAL SIGNED: 2015
LENDERS: EBRD, Islamic Development Bank, BSTDB, (A-Lenders) – Unicredit,
Siemens (B- Lenders)
IMPACT: It is the first hybrid project financed under both conventional
financing and sharia-complaint Islamic financing under a dual-
tranche structure.
Project Finance Deal of the Year
© European Bank for Reconstruction and Development 2015 28Environment / PPPs
WASTEWATER PPPS FUTURE SOLID WASTE PPPS?
Municipal WW: The Bank allocated TC funds of 64 cities facing severe SW-related environmental
circa. €1m to develop PPP structure for WWTPs. issues. Chronic lack of investment. No separation
The studies to demonstrate the value expected in at source hence low quality SW.
the Project and show similar methodology can be Two private operators of WTE facilities:
followed for future pipeline of water PPP projects
o ITC (8 gasification facilities across Turkey,
EBRD INVOLVEMENT AND SUPPORT 4.4Mt SW, 400M kWh electricity)
Existing project: Dilovasi industrial WW BoT o Hexagon (Pamukova anaerobic digester,
o Akfen Water and Tahal, 27 years contract 60kt SW)
o €14m project, €11m EBRD loan o More companies are looking at Solid Waste PPP
opportunities in the country.
EBRD is currently in the process of selecting a
pilot city for supporting the development of PPPs EBRD INVOLVEMENT AND SUPPORT
in Municipal WW sector: Initial steps to prepare a solid waste PPP in Izmir:
Technical cooperation to pilot city : €110m modern integrated waste management
i. Value for Money analysis: to provide a plant for 2,100 tonnes/day with recycling, energy
detailed feasibility and VfM. generation and biogas production.
ii. Legal support: to enable PPPs. EBRD technical assistance for feasibility study,
procurement support and city corporate
EBRD will look at financing the operator. development.
© European Bank for Reconstruction and Development 2015 29Case Studies
Industrial Wastewater – Dilovasi WWTP BoT
BORROWER: Akfen Su Arbiogaz Dilovasi
SPONSORS: Akfen Water - 75% (JV between Tahal/Kardan N.V.- 50% and Afken
Holding- 50%)
Arbiogaz - 25%
T YPE OF PPP CONTRACT: BOT 27 years
PROJECT DESCRIPTION: Construction and operation of Wastewater Treatment Plant and
Main Collector Line in Dilovasi Organized Industrial Zone (OIZ)
CAPACITY: 21,144 m3/day
TOTAL PROJECT COST: €14m
T YPE OF FINANCE: Project Financing/ 10 years Senior Loan
EBRD FINANCE: € 10.5m
DEAL SIGNED: 2010
LENDER: EBRD
IMPACT: The Project is servicing (i) the second largest Organized
Industrial Zone (OIZ) in Turkey, with an area covering 822ha and
4 industrial marine ports within its vicinities, consisting of 210
factories and room for 500 additional factories; (ii) the 43,000
inhabitants of Dilovasi town.
• OIZ guarantees annual minimum wastewater volume and tariff:
1.325 €/m3 for the first 11 year, 0,825 €/m3 for the rest of the
operation period.
© European Bank for Reconstruction and Development 2015 30Municipal Sector
EBRD INVOLVEMENT AND SUPPORT REFUGEE RESPONSE
Sectors covered: Water supply, wastewater, urban Municipal Resilience Refugee Response
transport, solid waste, energy efficiency. Framework: €150m EBRD lending window for
Since 2009, EBRD financed eight municipal Turkey to promote resilience and sustainability.
projects across 6 cities in Turkey including Bursa, Investments targeting municipalities and
Izmir, Gaziantep, Istanbul, Mersin and Bodrum municipal entities most affected by the Syrian
(ca. € 235 m). refugee crisis in southeast Turkey.
The Bank mobilised grant funds (zero budget Projects to be accompanied by investment grants
allocation for cities) for: to respond to affordability constraints.
project preparation, feasibility studies, DEVELOPMENT UNDER THE FRAMEWORK
environmental studies, and;
Gaziantep CNG Buses Project - (first Turkish
implementation support for tender project under the EBRD’s refugee crisis
preparation, procurement, and supervision response) signed in November, 2016.
of works,
EBRD €5 m loan and €5 m investment grant to
city support: to improve operational ease strain on public transport.
efficiency and management capacity; to
enhance the service quality and to increase The Bank is in discussions with other cities to
private sector involvement. continue supporting the Bank’s response to the
refugee crisis.
© European Bank for Reconstruction and Development 2015 31Case Studies
Municipal Lending – Gaziantep CNG Busses
BORROWER: Gaziantep Metropolitan Municipality
PROJECT DESCRIPTION: €5m loan and a €5m investment grant to the city of Gaziantep in south-
eastern Turkey for the acquisition of 50 new buses with the aim of
supporting municipalities exposed to the continuing Syrian refugee crisis.
USE OF PROCEEDS procurement of 50 CNG buses
TOTAL PROJECT COST: € 10 m
LENDERS EBRD as sole lender
EBRD FINANCE: € 5m senior loan and € 5m grant
DEAL SIGNED: November 2016
TECHNICAL COOPERATION: Procurement and Implementation Support for the procurement of the buses
according to the EBRD PP&Rs. Assignment cost: € 200,000.
Corporate Development Programme for the development of key performance
indicators and the commercialization of bus stops. Assignment cost: €
200,000.
IMPACT: sustainable urban transport within the context of rapid response to
refugee crisis in the city.
development of key performance indicators for urban bus service delivery
energy efficiency gains and emissions reduction from modern CNG buses
commercialisation of bus stops and tram stations (e.g. through coffee
shops, kiosks, etc.) to enhance non-fare revenues of the City
© European Bank for Reconstruction and Development 2015 32Case Studies
Municipal Lending – Istanbul Metro
BORROWER: Istanbul Metropolitan Municipality
PROJECT DESCRIPTION: € 88.3m to the City of Istanbul to finance the construction of Atakoy-Ikitelli
metro line with a total length of 13.4 kilometres
USE OF PROCEEDS the construction of Atakoy-Ikitelli metro line including twelve underground
stations and modification of depot area as well as electromechanical works
of the entire line
TOTAL PROJECT COST: € 338.3m
LENDERS EBRD and EIB (as majority co-financier)
EBRD FINANCE: € 88.3m senior loan to the municipality
DEAL SIGNED: January 2017
TECHNICAL COOPERATION: Policy Dialogue Support to identify opportunities in terms of commercial real
estate and car park and ride developments. Assignment cost: € 200,000.
Corporate Development Programme to assist with urban rail management
techniques, business and capital investment planning and capacity building.
Assignment cost: € 400.00
IMPACT: a Green Economy Transition project supporting sustainable transport,
significantly contributing to the reduction of emissions
Corporate Development Programme to improve operating, technical and
financial management methods within the metro
assessment of commercial real estate and car park & ride development
opportunities on the metro line
© European Bank for Reconstruction and Development 2015 33Contents
1. INTRODUCTION TO EBRD
2. TURKEY MACRO ECONOMIC CONTEXT
3. FINANCIAL INSTITUTIONS
4. INFRASTRUCTURE / PPPS
5. ENERGY & NATURAL RESOURCES
6. CORPORATES: AGRIBUSINESS & GENERAL INDUSTRY
7. CAPITAL MARKETS DEVELOPMENT
8. CONTACTS
© European Bank for Reconstruction and Development 2015 34Energy and Renewables
ELECTRICITY MARKET RENEWABLES
6th largest electricity market in Europe, with Mostly Hydro, Wind and Geothermal.
CAGR of 8% since the 1980s.
Renewables shall reach 30 % by 2023.
The sector is largely unbundled and is overseen
Renewables enjoy a FiT of
by an independent regulator. Since 2006 Turkey
has open day-ahead, intraday and balancing $ 73/MWh for HPPs/WPPs,
market allowing for real time balancing of $ 105/MWh for geothermal
supply and demand.
$ 133/MWh for solar/biomass
However, substantial presence of state owned
plus bonuses for local content .
companies. EUAS (generation) for 25%, TEIAS
(transmission) for 100%, TETAS (wholesale Hydros represent 1/3 of installed capacity but
market) as dominant supplier. less than 1/4 of the overall generation. No
specific benefits in terms of offtake/PPA.
Distribution is fully privatised.
High demand for solar energy; tenders for
The Turkish government’s strategy is to
licensed projects totalling 600 MW in the first
encourage the use of renewable, lignite and
half of 2015, over 1,000 MW unlicensed solar
nuclear in order to reduce dependence on
plants (PLUTO
Early Stage Private Sector Geothermal Development
Framework to support private sector early stage development:
• Deploying $25m of CTF concessional funds to partially
mitigate early stage risk and unlock commercial direct
financing
• Mobilising $100m in EBRD financing and over $200m in
private sector resources to finance site and plant
development
• Engaging global experts as to implement best industry
practices at all stages
TC Funds and technical support – EU IPA 2013
Surface Test drilling, Production and reinjection wells drilling
modelling and assessment studies,
Technical
Power plant construction, testing and
site design site preparation & commissioning
exploration drilling
Geothermal resource development
Financial
source
Sponsor Sponsor Sponsor + EBRD + Private sector
+
PLUTO
© European Bank for Reconstruction and Development 2015 36Case Studies
Energy and renewables – Karacaoren HEPPs
BORROWER: Kremna Enerji Uretim ve Ticaret A.S.
SPONSOR: Gama Enerji A.S.
CONCESSION: Transfer of operational rights for a period of 49 years
EBRD FINANCE: $ 44 m
T YPE OF FINANCE: Senior loan
TOTAL PROJECT COST: $ 195 m
OTHER SENIOR LENDERS: International Finance Corporation (IFC) and Industrial Commercial Bank
of China (ICBC)
YEAR: 2016
PROJECT DESCRIPTION: $ 132 m senior loan to Kremna Enerji Uretim ve Ticaret A.S. established
to take over the operating rights of Karacaoren-1 (32MW) and
Karacaoren-2 (46.4MW) hydroelectric power plants from the Privatization
Administration of Turkey.
IMPACT: support further privatization of power generation assets
Industry Recognition improvement of operational and technical efficiencies of the
2017 Bonds and Loans Awards
Runner up – Project Finance
hydroelectric power plants under private ownership
Deal of the Year
© European Bank for Reconstruction and Development 2015 37Case Studies
Energy and renewables – Tredas Financing
BORROWERS: IC Ictas Elektrik Ticaret A.Ş. (ICEL), Trakya Elektrik Dağıtım A.Ş. (TREDAS)
and Trakya Elektrik Perakende Satış A.Ş. (TREPAS)
SPONSOR: IC Holding, a diversified Turkish conglomerate
T YPE OF LICENCE: Distribution Licence provided by EMRA (Energy Regulatory Authority)
EBRD FINANCE: $ 134.8 m
T YPE OF FINANCE: Senior secured dual currency loan with limited guarantee from Sponsor
TOTAL PROJECT COST: $ 700 m
OTHER SENIOR LENDERS: Garanti Bank, IS Bank, VakifBank and TSKB
YEAR: 2016
PROJECT DESCRIPTION: The $ 700m financing package aims at (i) optimising the Borrowers’
financing structure and (ii) implementing capital investment plans for
2016-2020. These include expanding and upgrading the network,
enhancing metering systems, implementing environmental, health and
safety improvements and increasing network efficiency.
IMPACT: The project will enhance the integration of renewable sources and
reduce losses and related carbon emissions.
Industry Recognition Beyond the company’s capex programme, and through Technical
2017 EMEA Finance Best Assistance, the EBRD will help ICEL promote equal opportunities and a
Structured Finance Deal in CEE
greater role for female employees.
This Project will also support the Borrowers in implementing measures
to improve their internal corporate governance.
© European Bank for Reconstruction and Development 2015 38Case Studies
Energy and renewables – Akfen Energy equity
LEAD PARTNER: Akfen Holding
EBRD INVESTMENT: Up to $100m (+ $15m discretionary)
T YPE OF FINANCE: Equity
OTHER PARTNERS IFC committed for up to $100m for equal share in the Company
YEAR: 2015
PROJECT DESCRIPTION: Up to $115m capital increase to acquire a 16.67% post-money equity
stake in a portfolio of renewable generation assets which will be owned
by Akfen Renewable Energy (the Company), an energy holding company
and a subsidiary of Akfen Holding
IMPACT: The investment will enable Akfen Renewable Energy to triple its
renewable electricity generation capacity from 210MW to more than
600MW by 2020.
Akfen Energy will become one of the leading pure renewable players in
the Turkish electricity generation market, operating a portfolio of hydro,
solar and wind assets.
The Bank’s investment is structured to lead to an IPO of the Company
and it will ensure that the Company conducts its business in
accordance with best practice standards.
© European Bank for Reconstruction and Development 2015 39Case Studies
Energy and renewables – Efeler GPP
BORROWER: Gurmat Elektrik
SPONSOR: Guris Insaat ve Muhendislik A.S.
T YPE OF LICENCE: Generation Licence provided by EMRA (Energy Regulatory Authority)
EBRD FINANCE: $ 200m
T YPE OF FINANCE: Senior Loan
TOTAL PROJECT COST: $ 1 bn (Debt: 72% and Equity 28%)
OTHER SENIOR LENDERS Parallel loans by İşBank ($ 325 m), TSKB ($ 130 m) and Black Sea Trade
and Development Bank ($ 65 m).
YEAR: 2015
PROJECT DESCRIPTION: Development of a 170 MW Greenfield geothermal power plant located in
Aydin-Germencik province, Turkey.
IMPACT: The longest tenor financing for a geothermal/renewable project in
Turkey (15 years) with a merchant tail.
Significant contribution to both current geothermal capacity and the
governments’ strategic targets for renewables.
The Project benefits from a FiT of $ 105/MWh for 10 years,
comprehensive security package typical for project finance and step-in
rights for the lenders.
Largest geothermal plant in Turkey, 2nd largest in Europe and in top-10
in the world.
© European Bank for Reconstruction and Development 2015 40Case Studies
Energy and renewables – Kirikkale CCGT
BORROWER: Acwa Güç Elektrik Işletme ve Yönetim Sanayi ve Ticaret A.Ş
SPONSORS: Acwa Power International
T YPE OF LICENCE: Generation Licence provided by EMRA (Energy Regulatory Authority)
EBRD FINANCE: $ 200 m
T YPE OF FINANCE: Senior Loan
TOTAL PROJECT COST: $ 1.05 m
OTHER SENIOR LENDERS: Korea EximBank, IFC, Korea Development Bank, Standard Chartered and
Akbank
YEAR: 2012 - 2014
PROJECT DESCRIPTION: Development of a greenfield 928MW independent power plant to be
structured on a merchant basis and located 50km east of Ankara, near
the city of Kirikkale, Turkey.
IMPACT: The project’s impact stems from three factors:
Market expansion through sale of electricity through a combination of
private off take agreements, to eligible customers and to the
Balancing Market where market dynamics dictate the price; and
More widespread private ownership through supporting a privately
Industry Recognition
2014 PFI MENA Power Deal of developed project in Turkey where the state still holds a significant
the Year share in electricity generation.
2014 EMEA Best Power Deal CEE
2014 EMEA Best Project Finance No state support in the form of floor tariff mechanism in hard currency
deal for CEE (Full merchant risk)
© European Bank for Reconstruction and Development 2015 41Natural Resources
OIL & GAS / MINING FINANCING INSTRUMENTS
• Flexible financing solutions: Equity
Reserve-based lending, trade finance, convertible
Convertible debt
debt and early equity are some examples of the
Bank’s wide product range. Mezzanine / Subordinated debt
Senior project finance debt
• Support to all stages of development.
Senior reserve based debt
The EBRD works with strong sponsors in pre-
development stage financing, mine/field
development, project expansion and remediation.
The Bank also works with services providers.
© European Bank for Reconstruction and Development 2015 42Case Studies
Natural Resources – TUPRAS
EBRD Finance
Project
Summary
Signed in $ 150 m loan to Tüpraş, Turkey’s largest industrial company
and the owner of the country’s four refineries.
2016 Project
$ 232 m resources efficiency programme, including a new on-
site thermal power plant, waste heat recovery system, stack
gas treatment, water treatment unit, new fluid catalytic
cracker and hydrocracker unit at Kirikkale and Izmir plants.
Environmental Impact
Reduction in NOx and CO2 emissions (270,000 tonnes/year)
and water consumption (2.6 mcm/year) as a direct result of
the project. Comprehensive Environmental & Social Action
Plan (ESAP) to bring the plants in line with EU standards.
Transition Impact
(1) Largest resource-efficiency programme in the Turkish
industrial sector to date, fully in-line with the Bank’s Green
Economy Transition (GET) approach. (2) Demonstration of
increased competitiveness stemming from efficiency
upgrades. (3) Demonstration of OHS standards in line with EU
Seveso III Directive and beyond national requirements.
Link to Project Summary Document
© European Bank for Reconstruction and Development 2015 43Case Studies
Natural Resources – Balpet Petrol
EBRD Finance
Project
Summary
Signed in Up to € 10 m loan to Balpet Petrol Ürünleri Taşımacılık Sanayi
ve Ticaret A.Ş., a mid-size private distributor of motor fuels and
2016 logistics company that operates a network of more than 360
stations in Turkey.
Project
The loan will be used to finance the company's optimisation,
expansion and refurbishment programme for 2016- 2017,
which includes the aacquisition and upgrade of up to 30
gasoline stations.
Environmental Impact
Through the agreed Environmental and Social Action Plan, the
EBRD will also help Balpet to further advance its
environmental health and safety standards.
Transition Impact
(1) Setting standards for corporate governance and business
conduct; (2) Demonstration of new replicable behaviours and
activities (energy efficiency); (3) More widespread private
ownership by supporting a small player in a concentrated
market.
Link to Press Release / Link to PSD
© European Bank for Reconstruction and Development 2015 44Case Studies
Natural Resources – Centerra Turkey
EBRD Finance
Project
Summary
Signed in $ 75 m senior secured project finance loan to Öksüt Madencilik
Sanayi ve Ticaret A.S. (OMAS), a 100% subsidiary of Centerra
2016 Gold Inc, a large Canadian international gold mining company
with operations in Kyrgyzstan and Mongolia. The EBRD loan is
part of a $ 150 m project finance package arranged together
with UniCredit Bank.
Project
$ 230 m greenfield development of the open-pit of Öksüt gold
deposit and associated facilities near Kayseri.
Environmental Impact
A very comprehensive environmental and social appraisal has
been carried out by the lenders in line with EBRD standards.
The detailed ESIA is published online and builds on local EIA.
Transition Impact
(1) Compliance with Publish What You Pay (PWYP) standards of
transparency; (2) Promotion of equal opportunities and
economic inclusion through technical cooperation; (3) High
standards of transparency, EH&S and governance; (4) External
certification of cyanide use management and transport.
Link to Project Summary Document / Press Release
© European Bank for Reconstruction and Development 2015 45Contents
1. INTRODUCTION TO EBRD
2. TURKEY MACRO ECONOMIC CONTEXT
3. FINANCIAL INSTITUTIONS
4. INFRASTRUCTURE / PPPS
5. ENERGY & NATURAL RESOURCES
6. CORPORATES: AGRIBUSINESS & GENERAL INDUSTRY
7. CAPITAL MARKETS DEVELOPMENT
8. CONTACTS
© European Bank for Reconstruction and Development 2015 46Agribusiness and General Industry
AGRIBUSINESS GENERAL INDUSTRY
Agribusiness contributes 8% to the country’s Mix of blue chips and family-owned “Mittelstand”.
GDP and comprising 25% of the active labour Many JVs with international companies e.g. Renault.
force (2015).
Dynamic sector but need to move up the value chain
Turkey is the 7th largest agricultural producer through R&D (develop links with universities and
of the world and is the world leader in the research centres) and partnerships with foreign
production of dried figs, hazelnuts, companies (integrate in the global value chain).
sultanas/raisins, honey, and dried apricots
with agricultural exports close to $17 bn. Squeeze effect of the terms of trade and finance at
present with weak EUR depressing the value of
Activities throughout the production chain, exports (driven by ECB quantitative easing) and
from farming, processing and trading to food strong US$ increasing the debt burden (most
distribution, packaging and retail. corporate debt in US$).
EBRD policy dialogue to promote market- Progress needed as regards corporate governance
oriented policies. EBRD currently working with (family ownership and management), disclosure and
the Ministry of Food, Agriculture and Livestock standards as prerequisite to access the equity capital
on study which will be mapping Agribusiness markets.
support measures towards improved sector
competitiveness in the agribusiness sector in Insufficient access to debt capital markets (very
Turkey. narrow corporate bond market and 75% of the bonds
are 1 year or shorter).
© European Bank for Reconstruction and Development 2015 47Near Zero Waste (NØW)
Waste minimisation and material valorisation in circular economy
Component 1: Component 2: Component 3: Component 4:
Commercial + Technical support Policy dialogue to Awareness &
Concessional for project improve waste knowledge sharing
Financing developers management of relevant
practices technologies
• In Turkey, the waste sector contributes 9% of the country’s
GHG emissions
• Support the development of the necessary infrastructure to
recover valuable materials
• Financing SMEs by developing a leasing mechanism for
upgrading recycling equipment
• Establishing a Waste Market Place
• Promote waste-to-energy as alternative to landfilling
© European Bank for Reconstruction and Development 2015 48Case Studies
Agribusiness – Anatolian Orchards
BORROWER: AEP Anadolu Etap Penkon Gıda ve Tarım Ürünleri Sanayi ve Ticaret
A.Ş.
EBRD FINANCE: € 50 m
T YPE OF FINANCE: Long-term loan
TOTAL PROJECT COST: € 72 m
YEAR: 2016
PROJECT DESCRIPTION: Established in 2009, Anadolu Etap is predominantly active in the
processing of fruit juice concentrate and puree, and fruit farming.
The Company was created as a joint venture Anadolu Efes,
Sucocitrico Cutrale and Özgörkey Holding.
The operation will enable the Company to support its sustainable
growth by implementing a capital expenditure programme involving
i) investments in orchard plantations ii) fruit processing facilities in
Turkey and iii) limited balance sheet restructuring.
IMPACT: The transition impact of the project is derived from i) transfer and
dispersion of skills through backward linkages to farmers via
provision of technical assistance and strong focus on women
inclusion and ii) setting standards for corporate governance and
business conduct.
© European Bank for Reconstruction and Development 2015 49Case Studies
Agribusiness – Uludağ
BORROWER: Erbak-Uludağ İçecek A.Ş
EBRD FINANCE: € 30 m
T YPE OF FINANCE: Long-term loan
TOTAL PROJECT COST: € 30 m
YEAR: 2014
PROJECT DESCRIPTION: Uludağ is one of the oldest and largest producers of branded soft
drinks in Turkey, its 102-year history dating back to 1912.
The Project is supporting the company’s 2014-15 investment
programme which includes the launch of new, state-of-the-art
production facilities and measures to increase resource
efficiency.
IMPACT: The project supports i) procurement of new production facilities,
which includes innovative technology to improve the quality and
lifespan of its products and ii) Energy efficiency improvements.
© European Bank for Reconstruction and Development 2015 50Case Studies
Industry – Brisa
Client
Project Brisa is a leading manufacturer and seller of tyres and rubber
Signed in
Summary products in Turkey and in Europe. The Company operates as a
2016 joint venture between Bridgestone Corporation and Haci Omer
Sabanci Holding A.S. each holding 43.63% equity stake. The
Company is listed on Borsa Istanbul.
EBRD Finance
$150 m long-term loan to Brisa.
Use of Proceeds
The proceeds of the loan will finance the construction of a new
tyre plant in Aksaray, Central Anatolia, which will have an
annual production capacity of almost 4.2m tyres for passenger
cars and light commercial vehicles. The loan will also contribute
to the acquisition of additional equipment for the Company's
existing plant located in Izmit, a city in north-western Anatolia,
Turkey.
EBRD value added
The Project will assist in modelling the Company’s existing
policies in relation to youth and gender inclusion and support
regional inclusion in Aksaray. The project will also contribute
towards the Bank's ongoing inclusion policy dialogue initiative
in Turkey that creates direct links between the private sector
and Turkish education authorities to improve skills standards in
line with employers' needs.
© European Bank for Reconstruction and Development 2015 51Case Studies
Industry – Erdemir
Client
Project Erdemir Group, founded in 1960, is Turkey’s largest steelmaker,
Signed in
Summary accounting for approximately a quarter of Turkey's crude steel
2016 production (9.1m liquid steel capacity).
EBRD Finance
€ 75m long-term loan to the steelmakers Erdemir and Isdemir,
both part of Erdemir Group.
Use of Proceeds
The EBRD loan will finance a comprehensive investment
programme that to support Erdemir make the most effective
use of resources in manufacturing processes. The investment
programme include top-pressure recovery turbines, which
utilises high-pressure gases collected at blast furnaces to
generate electricity.
EBRD value added
The Project will support Erdemir and Isdemir to implement a
series of resource, energy and operational efficiency measures
at the production facilities in Ereğli and İskenderun. Supporting
companies such as Erdemir to adopt the best resource efficient
technologies is part of the EBRD’s Green Economy Transition
approach, which is devoted to investments that bring
environmental benefits and seeks to increase the level of EBRD
financing for sustainable resources.
© European Bank for Reconstruction and Development 2015 52Case Studies
Industry – Tofas
Client
Project Tofas is the only automotive company in Turkey producing both
Signed in
Summary passenger cars and light commercial vehicles. Tofas is a joint
2015 venture between Fiat Auto S.p.A, and Koç Holding A.Ş., and is
listed on Borsa Istanbul and the Luxembourg Stock Exchange.
EBRD Finance
EBRD arranged a syndicated loan of €200m through an A/B
structure, of which €100m was for the EBRD’s account and the
rest was syndicated to commercial banks.
Use of Proceeds
The proceeds of the loan financed the development and launch
of the new hatchback and station wagon models for the
passenger car segment. The Project included research and
development (R&D) investments for the engineering, design
and prototype development.
EBRD value added
The Project will support innovation and R&D stemming from
collaboration between industry, academia and local suppliers.
The Project will also support Tofaş’s existing policies with
respect to youth and gender inclusion. The cooperation
between Tofaş and EBRD is expected to create demonstration
effects within the sector in relation to vocational education and
training and equal opportunities.
© European Bank for Reconstruction and Development 2015 53Case Studies
Industry – Vestel Electronics
Project Client
Signed in
Summary
Vestel is one of the leading consumer electronics and
2015 white goods manufacturers in Europe which designs
and manufactures products for global brands. Zorlu
Holding owns a 78% controlling stake in Vestel, while
the remaining 22% is free floating on the Borsa
Istanbul.
EBRD Finance
In 2015, EBRD provided € 50m long-term loan finance
for R&D on the next generation of TV sets and LED
products.
Use of Proceeds
The loan financed a series of investments in Research,
Development and Innovation (RDI) activities.
EBRD value added
The Bank’s financing will assist shifting the company’s
focus in R&D from adaptation of new technologies to
conducting research in new technologies that will result
in reducing costs, improving efficiency, increasing profit
margins and decreasing dependence on foreign
suppliers. The project will also lead to the transfer and
dispersion of skills by strengthening linkages with local
academic institutions.
© European Bank for Reconstruction and Development 2015 54Case Studies
Industry – Aksa Akrilik
Project Client
Signed in
Summary Aksa Akrilik is one of the largest acrylic fibre manufacturers
2015 in the world. Majority of Aksa Akrilik is owned by Akkok
Group and it is listed on Borsa Istanbul.
EBRD Finance
In March 2015, EBRD provided € 50m long-term loan to
Aksa Akrilik.
Use of Proceeds
The loan financed a series of environmental, health and
safety, resource efficiency and new product investments at
the company’s manufacturing facility in Yalova, in
northwestern Turkey.
EBRD value added
With the implementation of new health and safety
standards, the Company will be the first company in the
chemicals industry in Turkey compliant with the EU SEVESO
Directive, an EU directive aimed at safeguarding sites
containing large quantities of hazardous and dangerous
substances.
In addition, the EBRD loan will finance the construction of a
wastewater treatment facility. The facility, which will also be
used by other companies nearby, will reduce wastewater
discharge in the region and increase the amount of
recycled water.
© European Bank for Reconstruction and Development 2015 55Case Studies
Industry – Ege Profil
Project
Signed in Client
Summary
2015 Ege Profil is a leading PVC profile manufacturer in
Turkey. Deceuninck NV, a leading Belgian PVC window
systems and building products manufacturer, holds
98% of the shares of the Company, while the rest are
listed on Borsa Istanbul.
EBRD Finance
In September 2015, EBRD provided € 25m long-term
loan to Ege Profil.
Use of Proceeds
The loan will finance the construction of a PVC profile
manufacturing plant in Izmir including energy and
resource efficiency investments.
EBRD value added
The loan will be extended under the EBRD’s new Near-
Zero Waste programme which finances waste
minimisation projects in Turkey.
EBRD will provide support in establishing the necessary
framework to accelerate PVC recycling in Turkey, setting
standards for energy efficiency and better
environmental performance.
© European Bank for Reconstruction and Development 2015 56Case Studies
Industry – Sisecam
Project
Signed in Client
Summary
2014 Sisecam is one of the largest glass producers in the
world active in all key areas of glassmaking; flat glass,
glassware, glass packaging, and glass chemicals.
Isbank controls 72% of the Company’s shares, whereas
28% are listed on Istanbul Stock Exchange.
EBRD Finance
In September 2014, EBRD provided € 30 m long-term
loan to Sisecam.
Use of Proceeds
The loan financed a series of resource efficiency
investments and a glass recycling project in Turkey.
EBRD value added
With the implementation of new energy and
environment management standards, the Company one
of the best glass producers in the region.
In addition, EBRD will provide technical support for the
implementation of energy efficiency and environmental
investments and expertise in the glass and corporate
energy efficiency sectors.
© European Bank for Reconstruction and Development 2015 57Case Studies
Manufacturing & Services - Ford Otosan
Project Client
Signed in
Summary
Ford Otosan is a JV between Ford Motor Corporation
2014 and Koc Group. It is one of the largest motor vehicle
manufacturers and domestic industry leader in Turkey
with sales at c. €4 bn in 2013.
EBRD Finance
EBRD arranged a syndicated loan of €140 m through
an A/B structure. €70 m for the EBRD account and the
rest was syndicated to commercial banks.
Use of Proceeds
The Project will finance the development of a new
Ecotorq engine to be used in heavy Ford Cargo trucks,
and other R&D activities in Turkey. Ford Otosan has the
largest private R&D center in Turkey employing around
1,300 engineers.
EBRD value added
The Bank’s financing will support innovation and
research and development (R&D) stemming from
collaboration between industry, local academia and
local suppliers. The Project will also set new corporate
human resources standards in the industry in relation
to inclusion and gender equality.
© European Bank for Reconstruction and Development 2015 58Case Studies
Industry – Turk Telekom
BORROWER: Turk Telekom A.S/Memorex
EBRD FINANCE: $ 150 m
T YPE OF FINANCE: Corporate Loan
TOTAL PROJECT COST: $ 202 m
YEAR: 2016
PROJECT DESCRIPTION: A loan to Türk Telekom group, the incumbent operator and leading
communication and convergence technology group in Turkey. The
financing is being used to support the expansion of the broadband
infrastructure in Turkey including in the eastern regions which
remain less penetrated compared to the rest of the country. The
financing also supports the investment in an alternative, high
capacity, high quality access to international data traffic via the
submarine fiber optic cable connecting Turkey to Western Europe
and South East Asia.
IMPACT: The project addresses the lack of sufficient broadband
infrastructure and growing demand for broadband internet access
from individuals and small and medium businesses including in
the remote regions of Turkey. Mobile broadband access is
especially important given the low fixed penetration in the country.
Furthermore, the demand for increased connectivity reflects an
end-user and business environment in which ultra fast broadband
access is essential for sustainable growth and development
© European Bank for Reconstruction and Development 2015 59Case Studies
Agribusiness/Property – TFI TAB Gida
CLIENT TFI TAB Gida Yatirimlari A.S
EBRD FINANCE: $ 50 m
T YPE OF FINANCE: Preferred stock issuance
TOTAL PROJECT COST: $ 150 m
YEAR: 2016
PROJECT DESCRIPTION: Subscription in the preferred stock issuance of the Company
Investment in a customized / structured instrument alongside
global institutional co-investors (EBRD invested $ 50 m in preferred
shares of TFI Tab Gida alongside $ 100 m invested by Goldman
Sachs and an investment vehicle advised by Credit Suisse)
IMPACT: Use of proceeds to finance domestic and international roll out,
expansion of supply chain and implementation of resource-
efficiency measures
Objective to support TFI’s corporate governance improvements,
enhance its sustainability standards.
EBRD will work with TFI on raising vocational skill levels in
Turkey and prepare for public markets in the near future
© European Bank for Reconstruction and Development 2015 60Case Studies
Construction / Property– NEF Real Estate
Client
Project Nef is a leading Turkish residential developer with an
Signed in
Summary innovative business model. Nef’s hallmark is Fold home
2017 concept, which is a block of flats with up to 24 shared
facilities such as guest rooms, a cinema, fitness centre,
meeting rooms, kitchen and dining rooms. In 2016 Nef also
launched its firs student housing project under Novu brand.
EBRD Finance
$ 60m contribution to a $120m joint venture with NEF.
Use of Proceeds
The joint venture will finance residential and student
housing developments under the Fold concept.
EBRD value added
The joint venture addresses multiple priorities of EBRD in
Turkey, including
- Urban regeneration and provision of earth-quake proof
housing – most of the capital will be allocated to urban
regeneration projects;
- Sustainability – All assets will be designed in accordance
with Leed Gold standards. For student housing projects,
a community engagement programme will be
implemented which will educate students on
sustainability and incentivise to save energy.
© European Bank for Reconstruction and Development 2015 61You can also read
