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© European Bank for Reconstruction and Development 2015
Investing in EBRD’s region:
Turkey, April 2016 Jean-Patrick MARQUET Director, Head of Turkey
© European Bank for Reconstruction and Development 2015
Contents
1. INTRODUCTION TO EBRD
2. FINANCIAL INSTITUTIONS
3. INFRASTRUCTURE / PPPS
4. ENERGY AND RENEWABLES
5. CORPORATES: AGRIBUSINESS & GENERAL INDUSTRY
6. CAPITAL MARKETS DEVELOPMENT
7. CONTACTS
2
© European Bank for Reconstruction and Development 2015
What is the EBRD?
International financial institution, promotes transition to market economies in 35 countries from central Europe to central Asia.
€30 billion capital. AAA rating from all three main rating agencies.
In 2009, EBRD opened its office in Istanbul. Today, EBRD has offices in Ankara, Istanbul and Gaziantep.
In 2011, the Bank expanded to Egypt, Morocco, Tunisia and Jordan.
In 2014, the EBRD welcomed Cyprus.
In 2015 it was agreed that the Bank will invest in Greece on a temporary basis to support reforms and a return to growth.
In 2016, China became a shareholder of EBRD.
Results in 2015
• €9.4 billion invested in 381 projects
• Private sector accounted for 79% share
• Debt 86%, Equity 14%
EU 27 Countries (1)
58.7%
EBRD region excluding EU
13.8%
Others 8.7%
USA 10.1%
Japan 8.6%
Shareholding structure
(1) Includes European Community and European Investment Bank (EIB)
each at 3%. Among other EU countries: France, Germany, Italy, and
the UK each holds 8.6%
3
© European Bank for Reconstruction and Development 2015
EBRD projects span every sector
Transport Municipal & Environmental
Infrastructure
Property & Tourism
Financial Institutions Natural Resources Telecommunications,
Informatics & Media
Industry, Commerce
& Agribusiness
Manufacturing
& Services
Power & Energy
5
© European Bank for Reconstruction and Development 2015
EBRD Global YE2015
Number of projects to date 4,485
Net cumulative Bank investment EUR 107bn
Private Share 79 per cent
EBRD TURKEY YE2015
Number of projects to date 182
Net cumulative Bank investment EUR 7.3bn
Private Share 97 per cent
20%
7%
9%
15% 20%
15%
13% S.E. Europe
SEMED
Central Asia
Central Europe
E.E. Caucasus
Turkey
Russia
13%
43% 23%
21% Energy
FI
Ind. Comm. & Agribusiness
Infrastructure
EBRD business snapshot
6
© European Bank for Reconstruction and Development 2015
DECENTRALISED BUSINESS MODEL
3 offices : Istanbul, Ankara, Gaziantep
90 staff on the ground
Includes: bankers, lawyers, engineers,
technical assistance staff
CAPITAL MOBILISATION
EBRD’s over €7 billion investment in Turkey
since 2009 has additionally mobilised €16
billion in total capital.
“Every EBRD euro is supplemented by €2.5
from other sources”
The EBRD has had some great successes in
Turkey, and we see great opportunities for
further investments that will generate wealth
and improve people’s lives.
NEW OPERATIONAL PRIORITIES (2015 – 2019)
Our operational priorities are:
i. Enhancing energy security and
sustainability by supporting sector reform,
promoting energy efficiency and
renewable energy
ii. Improving the quality of infrastructure via
commercialisation and private sector
participation
iii. Scaling up private sector competitiveness
through innovation and improved
corporate governance
iv. Promoting regional and youth inclusion, as
well as gender equality, to support long-
run growth potential
v. Deepening capital and local currency
money markets
EBRD priorities in Turkey
7
© European Bank for Reconstruction and Development 2015 8
EC donor funds have represented 80% of all donor funds mobilised by EBRD in Turkey
With €67m contributed by the EC across 2009-2015 and €6.8bn invested by EBRD,
EC donor funds have achieved a 100x leverage ratio
EU donor input in EBRD business in Turkey
TURKEY - TC and non-TC grant commitments since inception
EURm 2009 2010 2011 2012 2013 2014 2015Grand
Total
EU TC funds TC 1 6 4 2 1 12 27
EU non-TC funds Non-TC 0 0 3 0 37 0 40
EU Donor Funds Total 0 1 6 7 2 38 12 67
EBRD Investment 150 494 890 1,049 920 1,394 1,900 6,797
Mobilisation ratio - 928x 143x 146x 409x 36x 154x 102x
© European Bank for Reconstruction and Development 2015
Contents
1. INTRODUCTION TO EBRD
2. FINANCIAL INSTITUTIONS
3. INFRASTRUCTURE / PPPS
4. ENERGY AND RENEWABLES
5. CORPORATES: AGRIBUSINESS & GENERAL INDUSTRY
6. CAPITAL MARKETS DEVELOPMENT
7. CONTACTS
9
© European Bank for Reconstruction and Development 2015
EBRD Turkey Financial Institutions
13/04/2016
• Total FI investments in Turkey: >€3 bn
• Wide coverage of financial products:
- Debt (structured, senior unsecured, sub-
ordinated, trade finance)
- Equity
• Cooperation with various 19 FIs:
- 12 banks
- 6 non-banks (leasing, factoring, insurance,
asset management)
- 1 stock exchange
• Priorities:
- SMEs: industrial, agribusiness
- Sustainable energy: Turseff, Midseff, Tureef
- Inclusion: Women in Business
- Capital markets: bonds, equities
• Active policy dialogue and collaboration
with regulator
© European Bank for Reconstruction and Development 2015
$285 million facility ($50 million from
the Clean Technology Fund) launched
in 2010 for small investments (below
$5 million) in:
• SME Energy Efficiency
• Commercial EE
• Residential EE
• Small Scale Renewables
Loan Breakdown by Technology:
67% Energy Efficiency 33% Renewable Energy
Loan
Amount,
($ mln)
Total Investment
($ mln)
Number of Sub-
Projects
Primary energy
savings
(toe/year)
Annual GHG
savings (tonnes
CO2eq/year)
Avoided oil
imports
($ mln/year)
265 464 370 232,000 645,000 145
TurSEFF MidSEFF Direct Lending
Turkey Private Sector SEFF:
Small scale EE & RE investments
13/04/2016
© European Bank for Reconstruction and Development 2015 12
€1 billion facility, commercially structured
through DPR launched in 2011 for €5 – 50
million sub-investments in:
• Renewable Energy
• Energy Efficiency
• Waste-to-Energy
+ EU environmental & social standards
+ Support in Carbon Market development
Loan
Amount,
(€ mln)
Total Investment
(€ mln)
Number of Sub-
Projects
RE generated
(TWh/year)
Annual GHG
savings (tonnes
CO2eq/year)
Avoided oil
imports
(€ mln/year)
715 1,100 42 2.3 1.35 million 383
TurSEFF MidSEFF Direct Lending
Mid-Size SEFF
Scaling-up renewables
13/04/2016
© European Bank for Reconstruction and Development 2015 13/04/2016
This programme is funded by the European Union, the EBRD and the Republic of Turkey
Women in Business
Financing
• Dedicated credit lines of up to €300
million to be provided to partner banks
• First loss risk cover of up to €30
million
• Technical assistance to partner banks
of up to €3million
• Business advice and business
• Development services for women-led
SMEs of up to €5 million
Advice for Women in Business
Women in Business Financing
• €175 million disbursed to 4 partner banks
Vakifbank, Finansbank, Isbank and TEB
• €70 million allocated to women-led SMEs
Finance and Advice for Women in Business
© European Bank for Reconstruction and Development 2015
Contents
1. INTRODUCTION TO EBRD
2. FINANCIAL INSTITUTIONS
3. INFRASTRUCTURE / PPPS
4. ENERGY AND RENEWABLES
5. CORPORATES: AGRIBUSINESS & GENERAL INDUSTRY
6. CAPITAL MARKETS DEVELOPMENT
7. CONTACTS
14
© European Bank for Reconstruction and Development 2015
Transport / PPPs
AIRPORTS
Many private airports:
Istanbul Ataturk, Sabiha Gokcen, and
Third Airport
Ankara Esenboga
Izmir Adnan Menderes (EBRD loan)
Dalaman (EBRD loan).
Turkish operators: TAV (38% ADP), YDA, IC Ictas.
Future projects: regional airports:
1. Samsun/Carsamba (ca. €100m)
2. Nevsehir/Cappadoccia (ca. €100m).
3. Mersin-Adana/Cukurova (€350-450m).
PORTS
Privatisations to date through “Transfer of
Operating Rights” for 36 years.
Examples: Mersin (EBRD bond), Asya (EBRD
loan), etc.
15
ROADS
Three PPPs to date:
1. Eurasia Tunnel (€150m EBRD loan)
2. Gebze-Izmir motorway (Astaldi)
3. 3rd Bosphorus Bridge (IC Holding/Astaldi).
Future projects:
o North Marmara Motorway (tender 2Q2016)
o 2nd Istanbul Tunnel
o Canakkale suspension bridge
RAILWAYS
State Railways (TCDD) monopoly up to now, but
Liberalisation legislation in place, however no
secondary legislation yet, hence no implementation.
Government 2016 action plan includes opening up:
o Third-party access for private rolling stock
o 49 years concessions for private developers of
new railway lines
© European Bank for Reconstruction and Development 2015
Case Studies Transport – Eurasia Tunnel
Industry Recognition 2012
Infrastructure Deal of the Year
BORROWER: Avrasya Tuneli Isletme Insaat ve Yatirim A.S.
SPONSORS: Yapi Merkezi and SK E&C Group
TYPE OF PPP CONTRACT: Build – Operate – Transfer (BOT) (30.5y concession incld. 55m
construction period)
ADMINISTRATION/ GRANTOR Ministry of Transportation, General Directorate of Railways,
Seaports and Airports Construction, Republic of Turkey (DLH)
EBRD FINANCE: EUR 137.2 million (equivalent of USD 150 million)
TYPE OF FINANCE: Senior Loan
TOTAL PROJECT COST: EUR 1,139.3 million
YEAR: 2012
OTHER SENIOR LENDERS: EIB (USD 150m), KEXIM (USD 250m) Direct Facilities
SMBC, Standard Chartered, Mizuho under Kexim Cover (USD30m)
and Ksure Cover (USD180m)
PROJECT DESCRIPTION: The project is a design, finance-build-operate and transfer
concession for the Istanbul Strait Road Tube Crossing
IMPACT: It was an advanced BOT model developed for large
infrastructure projects, having direct agreement with Ministry of
Transport and Debt assumption by Turkish Treasury in case of
termination. This model has used later on Gebze – Izmir highway
and 3rd Bosporus Bridge project.
EBRD Sustainability Award 2015
Infrastructure Deal of the Year
16
© European Bank for Reconstruction and Development 2015
Case Studies Transport – Mersin International Port
BORROWER: Mersin International Port
SPONSOR: Akfen Holding A.S.
TYPE OF PPP CONTRACT: Privatization through 36-year concession (Transfer of operation of rights)
EBRD FINANCE: USD 79.5 million (equivalent of EUR 61.2 million)
TYPE OF FINANCE: Eurobond denominated in USD
TOTAL PROJECT COST: USD 737 million (equivalent of EUR 690 million)
YEAR: 2013
OTHER PARTICIPANTS: IFC (USD 66 million) Clifford Capital (USD 79.5 million)
PROJECT DESCRIPTION: First Eurobond transaction from Turkey since early May 2013: the deal
reopens the market for Turkish borrowers
First-ever infrastructure bond for Turkey
IMPACT: The Project is the first Eurobond issue by an infrastructure project
company in Turkey representing innovation in the Turkish market for
infrastructure companies and successful placement will contribute
substantially to the development of the capital markets and demonstrate
new ways of financing for infrastructure investments by encouraging
companies to diversify their source of funding through the
development/creation of the corporate/project bonds market.
Industry Recognition 2013
Port Deal of the Year (MEA)
17
© European Bank for Reconstruction and Development 2015
BORROWER: YDA Havalimani Yatirim ve Isletme A.S.
SPONSOR: YDA Insaat Sanayi ve Ticaret A.S.
ADMINISTRATION Ministry of Transportation, DHMI (Airport Authority)
TYPE OF PPP CONTRACT: 25-year concession (until 2040)
EBRD FINANCE: EUR 162 million (EUR 81 A Loan / EUR 81 B Loan (UniCredit))
TYPE OF FINANCE: Senior Loan
TOTAL PROJECT COST: EUR 385.2 million (55% equity and IGC, 45% debt)
YEAR: 2015
PROJECT DESCRIPTION: Financing the construction of a new domestic terminal for the Dalaman
Airport including ancillary facilities in accordance with the concession
agreement.
IMPACT: The new concession contract at Dalaman Airport removes all annual
passenger traffic guarantees and hence shifts the entire traffic risk to
the private concessionaire. This new model with more risk transferred
to the private sector is expected to have demonstration effects in terms
of future airport PPP structures in Turkey based on full traffic risk.
Assessment of energy and sustainability performance and any gaps,
definition of a set of indicators and development of a toolkit with
specific and achievable benchmarks and elements for improved
sustainability for Dalaman Airport at each transition stage.
This is the first regional airport
PPP financed by the Bank in
Turkey.
Case Studies Transport – Dalaman Airport
18
© European Bank for Reconstruction and Development 2015
Social Infra / PPPs
TURKISH PPP HOSPITALS
60 new hospitals with 50,000 high-quality
hospital beds for of up to €12bn. 17 hospital
PPPs already awarded (Phase 1), for €6 bn.
Phase 2 tenders have started mid -2015.
Facility Management only. Clinical services
remain with MoH.
28.5 years PPPs incl. construction 3.5 years.
EBRD INVOLVEMENT AND SUPPORT
Framework envelop of €600m debt or equity.
Advisory role over 24 months to make the PPP
contracts bankable
Technical cooperation support to MoH for Value
for Money Methodology and PPP Contract
Implementation and Monitoring unit.
3 projects signed under the Framework to date:
i. Adana Hospital (Ronesans/Meridiam)
ii. Ankara Etlik Hospital (Astaldi Turkerler)
iii. Konya Hospital (YDA)
FUTURE SCHOOL PPPS?
Government strategy for 90 education campus
projects.
As the total project cost of each project is in the
range of TL 100-150m, MoEdu is planning to
make project packages made up of 4-5
campuses close to each other in each package
with a total size of TL500m.
The expected contract term would be 20 years,
after an estimated construction period of 2.5
years.
The programme is expected to come to the
market in late 2016.
EBRD INVOLVEMENT AND SUPPORT
EBRD offered 2 technical cooperation
assignments to support the PPP programme.
Once the PPP scheme is properly established and
the successful tenders are in place, the EBRD will
be looking to finance the private operators.
19
© European Bank for Reconstruction and Development 2015
Case Studies Social Infra – Etlik Hospital PPP
BORROWER: Ankara Etlik Hastane Saglik Hizmetleri A.S.
SPONSORS: Astaldi (51%) – Turkerler (49%)
TYPE 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
TYPE 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 €12 billion programme to build or
expand about 60 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.
20
© European Bank for Reconstruction and Development 2015
Case Studies Social Infra – Adana Hospital PPP
BORROWER: ADN PPP Saglik Yatirim A.S.
SPONSORS: Ronesans (40%) – Meridiam (40%) – Sila (10%) – Sam (10%)
TYPE 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: 1,550
TOTAL PROJECT COST: €542 m
TYPE OF FINANCE: Project Financing/Senior Loan
EBRD FINANCE: € 115 m A-Loan/€ 100 m B-Loan
DEAL SIGNED: 2014
LENDERS: EBRD, IFC, DEG, Proparco (A- Lenders) – KDB, BBVA, HSBC, Siemens (B-
Lenders) – SMBC (Commercial Lender).
IMPACT: The project is one of the first hospital facilities management PPPs in
Turkey to reach financial closure, setting a benchmark for international
best practice.
It is also a pioneer project for the Turkish government’s €12bn
Hospital PPP Programme, which aims to build 60 hospitals giving a
total capacity of 50,000 beds across the country in collaboration with
the private sector.
Industry Recognition 2014
Euromoney Project Finance
European PPP Deal of the Year
21
© European Bank for Reconstruction and Development 2015
Environment / PPPs
WASTEWATER PPPS
Municipal WW: 40 municipalities do not have any
WWTPs at all. MoEnv looking to apply the PPP
Scheme to WWTP. First pilot: Denizli Municipality
(700,000 inhabitants) has sought the support of
EBRD for the preparation and financing of a
750,000m2/d WWTP PPP.
Industrial WW: Organised Industrial Zones
EBRD INVOLVEMENT AND SUPPORT
Existing project: Dilovasi industrial WW BoT
o Akfen Water and Tahal, 27 years contract
o €14m project, €11m EBRD loan
EBRD technical cooperation to Denizli :
i. Value for Money analysis: to provide a
detailed feasibility and VfM.
ii. Legal support: to enable PPPs.
EBRD will look at financing the operator.
22
FUTURE SOLID WASTE PPPS?
64 cities facing severe SW-related environmental
issues. Chronic lack of investment. No separation
at source hence low quality SW.
Two private operators of WTE facilities:
o ITC (8 gasification facilities across Turkey,
4.4Mt SW, 400M kWh electricity)
o Hexagon (Pamukova anaerobic digester,
60kt SW)
EBRD INVOLVEMENT AND SUPPORT
Initial steps to prepare a solid waste PPP in Izmir:
€110m modern integrated waste management
plant for 2,100 tonnes/day with recycling, energy
generation and biogas production.
EBRD technical assistance for feasibility study,
procurement support and city corporate
development.
© European Bank for Reconstruction and Development 2015
Case Studies Industrial Wastewater – Dilovasi WWTP BoT
BORROWER: Afken Su Arbiogaz Dilovasi
SPONSORS: Afken Water - 75% (JV between Tahal/Kardan N.V.- 50% and Afken
Holding- 50%)
Arbiogaz - 25%
TYPE 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
TYPE 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.
23
© European Bank for Reconstruction and Development 2015
Contents
1. INTRODUCTION TO EBRD
2. FINANCIAL INSTITUTIONS
3. INFRASTRUCTURE / PPPS
4. ENERGY AND RENEWABLES
5. CORPORATES: AGRIBUSINESS & GENERAL INDUSTRY
6. CAPITAL MARKETS DEVELOPMENT
7. CONTACTS
24
© European Bank for Reconstruction and Development 2015
Energy and Renewables
ELECTRICITY MARKET
6th largest electricity market in Europe, with
CAGR of 8% since the 1980s.
The sector is largely unbundled and is overseen
by an independent regulator. Since 2006 Turkey
has open day-ahead, intraday and balancing
market allowing for real time balancing of
supply and demand.
However, substantial presence of state owned
companies. EUAS (generation) for 30%, TEIAS
(transmission) for 100%, TETAS (wholesale
market) as dominant supplier.
Distribution is fully privatised.
The Turkish government’s strategy is to
encourage the use of renewable, lignite and
nuclear in order to reduce dependence on
imported energy.
However, gas will continue to constitute a
substantial part of the generation.
RENEWABLES
Mostly Hydro, Wind and Geothermal.
Renewables shall reach 30 per cent by 2023.
Renewables enjoy a FiT of
USD 73/MWh for HPPs/WPPs,
USD 105/MWh for geothermal
USD 133/MWh for solar/biomass
plus bonuses for local content .
Hydros represent 1/3 of installed capacity but
less than 1/4 of the overall generation. No
specific benefits in terms of offtake/PPA.
High demand for solar energy tenders totalling
600 MW in the first half of 2015, both licensed
and unlicensed solar plants (<1MW).
25
© European Bank for Reconstruction and Development 2015
Case Studies Energy and renewables – Rotor Wind Farm
CLIENT: Rotor Elektrik Uretim A.S.
SPONSOR: Zorlu Enerji Electric Generation Company
TYPE OF LICENCE: Generation Licence provided by EMRA (Energy Regulatory Authority)
EBRD FINANCE: EUR 45 million
TYPE OF FINANCE: Senior Loan
TOTAL PROJECT COST: EUR 213.9 million
The remainder of the required financing is provided through parallel
loans by IFC (EUR 55 million) and EIB (EUR 30 million guaranteed by
Denizbank (EUR 20 million) and HSBC (EUR 10 million))
YEAR: 2010
PROJECT DESCRIPTION: Development of a greenfield 135 MW onshore wind independent power
project located in Osmaniye in Southern Turkey, which became the
largest WPP in Turkey on commissioning.
IMPACT: Deepening the extent of then nascent Turkish power market by
becoming the first large scale wind project in Turkey developed on a
project finance basis
The Project benefits from a FiT of USD 73/MWh for 10 years,
comprehensive security package typical for project finance and step-in
rights for the lenders. However, the project has elected each year to
sell its output in the day ahead market or through bilateral contracts at
higher prices, thus acting as a fully merchant project.
Industry Recognition:
Project Finance Magazine -
European Onshore Wind Deal of
the Year 2009
26
© European Bank for Reconstruction and Development 2015
Case Studies Energy and renewables – Kirikkale CCGT
BORROWER: Acwa Güç Elektrik Işletme ve Yönetim Sanayi ve Ticaret A.Ş
SPONSORS: Acwa Power International
TYPE OF LICENCE: Generation Licence provided by EMRA (Energy Regulatory Authority)
EBRD FINANCE: USD 200 million
TYPE OF FINANCE: Senior Loan
TOTAL PROJECT COST:
OTHER SENIOR LENDERS:
USD 1.05 million
Korea EximBank, IFC, Korea Development Bank, Standard Chartered and
Akbanak
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
developed project in Turkey where the state still holds a significant
share in electricity generation.
No state support in the form of floor tariff mechanism in hard currency
(Full merchant risk)
Industry Recognition
2014 PFI MENA Power Deal of
the Year
2014 EMEA Best Power Deal CEE
2014 EMEA Best Project Finance
deal for CEE
27
© European Bank for Reconstruction and Development 2015
Case Studies Energy and renewables – Efeler GPP
BORROWER: Gurmat Elektrik
SPONSOR: Guris Insaat ve Muhendislik A.S.
TYPE OF LICENCE: Generation Licence provided by EMRA (Energy Regulatory Authority)
EBRD FINANCE: USD 200 million
TYPE OF FINANCE: Senior Loan
TOTAL PROJECT COST:
OTHER SENIOR LENDERS
USD 1 billion (Debt: 72% and Equity 28%)
Parallel loans by Türkiye İş Bankası AŞ (USD 325 million), Turkiye Sınai
Kalkınma Bankası A.S. (USD 130 million) and Black Sea Trade and
Development Bank (USD 65 million).
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 USD 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.
28
© European Bank for Reconstruction and Development 2015
Contents
1. INTRODUCTION TO EBRD
2. FINANCIAL INSTITUTIONS
3. INFRASTRUCTURE / PPPS
4. ENERGY AND RENEWABLES
5. CORPORATES: AGRIBUSINESS & GENERAL INDUSTRY
6. CAPITAL MARKETS DEVELOPMENT
7. CONTACTS
29
© European Bank for Reconstruction and Development 2015
Agribusiness and General Industry
AGRIBUSINESS
Agribusiness contributes 7.4% to the country’s
GDP and comprising 23.6% of the active
labour force (2013).
Turkey is the 7th largest agricultural producer
of the world and actively trades in the world
market. In 2013, raw agricultural products
faced a $1.9 billion trade deficit.
Activities throughout the production chain,
from farming, processing and trading to food
distribution, packaging and retail.
EBRD policy dialogue to promote market-
oriented policies. EBRD currently working with
the Ministry of Food, Agriculture and Livestock
on a comprehensive mapping study of all the
existing support mechanisms in the
agribusiness sector in Turkey.
GENERAL INDUSTRY
Mix of blue chips and family-owned “Mittelstand”.
Many JVs with international companies e.g. Renault.
Dynamic sector but need to move up the value chain
trough R&D (develop links with universities and
research centres) and partnerships with foreign
companies (integrate in the global value chain).
Squeeze effect of the terms of trade and finance at
present with weak EUR depressing the value of
exports (driven by ECB quantitative easing) and
strong US$ increasing the debt burden (most
corporate debt in US$).
Progress needed as regards corporate governance
(family ownership and management), disclosure and
standards as prerequisite to access the equity capital
markets.
Insufficient access to debt capital markets (very
narrow corporate bond market and 75% of the bonds
are 1 year or shorter).
30
© European Bank for Reconstruction and Development 2015
Case Studies Agribusiness – Uludağ
BORROWER: Erbak-Uludağ İçecek A.Ş
EBRD FINANCE: EUR 30 million
TYPE OF FINANCE: Long-term loan
TOTAL PROJECT COST: EUR 30 million
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.
31
© European Bank for Reconstruction and Development 2015
Project
Summary
Case Studies Industry - Ford Otosan
Client
Ford Otosan is a JV between Ford Motor Corporation
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 million
through an A/B structure. €70 million 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.
2014 Signed in
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© European Bank for Reconstruction and Development 2015
Project
Summary
Case Studies Industry - Sisecam
Client
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 Euro 30 million
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.
2014 Signed in
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© European Bank for Reconstruction and Development 2015
Project
Summary
Case Studies Industry - Vestel Electronics
Client
Vestel is one of the leading consumer electronics and
white goods manufacturers in Europe which designs
and manufactures products for global brands. Zorlu
Holding owns a 78 per cent controlling stake in Vestel,
while the remaining 22 per cent is free floating on the
Borsa Istanbul.
EBRD Finance
In 2015, EBRD provided Euro 50 million 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.
2015 Signed in
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© European Bank for Reconstruction and Development 2015
Project
Summary
Case Studies Industry - Aksa Akrilik
Client
Aksa Akrilik is one of the largest acrylic fibre manufacturers
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 Euro 50 million 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.
2015 Signed in
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© European Bank for Reconstruction and Development 2015
Project
Summary
Case Studies Industry - Ege Profil
Client
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 Euro 25 million
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.
2015 Signed in
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© European Bank for Reconstruction and Development 2015
Case Studies Telecom – Turk Telekom
BORROWER: Turk Telekom A.S
EBRD FINANCE: EUR 100 million
TYPE OF FINANCE: Corporate Loan
TOTAL PROJECT COST: EUR 176 million
YEAR: 2012
PROJECT DESCRIPTION: A loan to Türk Telekom, the incumbent operator and leading
communication and convergence technology group in Turkey. The
financing is being used to support the expansion of reach and
capacity of Türk Telekom’s fixed broadband networks in the
eastern provinces of Turkey which will allow the company to provide
high-quality broadband internet services to its customers.
IMPACT: The project addresses the lack of sufficient broadband
infrastructure and growing demand for broadband internet access
from individuals and small and medium businesses in the remote
regions of Turkey. Today, the fixed broadband penetration in these
regions is still lagging behind the rest of the country due to limited
investments in infrastructure from telecom operators. Improving
the access to broadband internet, an important part of the
essential information infrastructure, is crucial for the development
of the knowledge-based economy in those remote regions and the
country as a whole.
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© European Bank for Reconstruction and Development 2015
Case Studies E-commerce – HepsiBurada.com
BORROWER: D-Market Elektronik Hizmetler ve Ticaret A.S.
EBRD FINANCE: USD 15M
TYPE OF FINANCE: Equity Investment
TOTAL PROJECT COST: USD 112M million
YEAR: 2015
PROJECT DESCRIPTION: An equity investment into HepsiBurada.com, Turkey’s largest
ecommerce property. Hepsiburada is the Amazon of Turkey with
thousands of orders delivered to every corner of Turkey daily.
IMPACT: EBRD investment will be used to optimize the logistics
infrastructure, including a purpose built warehouse for the online
retail sector. This is expected to lead to high operational synergies.
The resulting improvements will provide a demonstration effect to
other players in the e-commerce sector which operate through a
different delivery model with several distribution warehouses at
the same time.
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© European Bank for Reconstruction and Development 2015
Contents
1. INTRODUCTION TO EBRD
2. FINANCIAL INSTITUTIONS
3. INFRASTRUCTURE / PPPS
4. ENERGY AND RENEWABLES
5. CORPORATES: AGRIBUSINESS & GENERAL INDUSTRY
6. CAPITAL MARKETS DEVELOPMENT
7. CONTACTS
39
© European Bank for Reconstruction and Development 2015
Capital markets development
EQUITY
Shallow market: ca. 30% of GDP (vs. 100%
Germany, 250% UK).
Governance issues in family ownership culture.
However need for more equity to manage
leverage and to have a ‘currency’ to form
partnership (esp. with FDI).
EBRD market development efforts are 3-fold:
1. Equity investments in selected companies
with a view to doing an IPO within 3-5
years (2015: €450m equity investment in
12 companies)
2. Technical assistance to Capital Markets
Board to promote corporate governance
standards.
3. Acquisition of 10% of Borsa Istanbul and
nominee director at the board to support
development of the exchange and
international expansion
DEBT
Narrow debt capital markets due to limited pool of
savings in Turkey.
Bond market dominated by state issuance and
quasi inexistent corporate bond market (only 7% of
total private sector market).
Short maturities inadequate to finance investment
(75% of the bonds are 1 year or shorter).
Low transparency and deficient rating system
(‘qualified investor’ market).
EBRD market development efforts are 3-fold:
1. Subscription to bonds issued by selected
companies with longer maturity
2. Policy dialogue with Capital Markets Board
to promote higher disclosure and
transparency.
3. Policy dialogue with Treasury and Central
Bank to reform the money market index and
open up the market to international capital.
40
© European Bank for Reconstruction and Development 2015
Project
Summary
Case Studies Industry - Pasabahce
Client
Pasabahce is the third largest player in the glassware
industry worldwide, and is a subsidiary of Sisecam –
one of the leading glass producers in the world and a
long-time client of the EBRD.
EBRD Finance
EBRD invested €125 million in equity with Pasabahce.
Use of Proceeds
The EBRD funds will be used in various EBRD countries
of operation to invest in operational efficiencies and
energy efficiency and in capital expenditures.
EBRD value added
As a pre-IPO investment, the EBRD will actively support
higher corporate governance and support the listing
efforts of the Company.
2014 Signed in
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© European Bank for Reconstruction and Development 2015
Case Studies Energy – Akfen Renewable Energy Equity
CLIENT: Akfen Renewable Energy, part of Akfen Holding
EBRD FINANCE: $100 million
TYPE OF FINANCE: 20% Equity Stake
YEAR: 2015
PROJECT DESCRIPTION: Subscription to new shares to finance the development of assets
already licensed.
IMPACT: Portfolio of renewable projects, including operational hydro and
solar power plants as well as several wind, solar and hydro projects
under development.
Objective to triple the size of installed capacity to 500MW.
Pre-IPO investment: the EBRD will actively support higher corporate
governance and the listing efforts of the Company.
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© European Bank for Reconstruction and Development 2015
Case Studies Construction – Ronesans Holding TL bond
BORROWER: Ronesans Holding
EBRD FINANCE: TL100 million
TYPE OF FINANCE: Corporate bond
TOTAL PROJECT COST: TL200million
YEAR: 2016
PROJECT DESCRIPTION: Subscription to a senior unsecured corporate bond in local
currency, based on the TL TRLIBOR interest rate index.
IMPACT: EBRD subscribing only in the 3-years tranche, hence increasing the
maturity of Ronesans’ corporate debt.
First ever TL bond based on TRLIBOR, an interest rate index that
international investor can access and hedge, hence opening up the
market.
Bond intended to finance Ronesans’ equity contribution to the
Elazig Hospital PPP project
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© European Bank for Reconstruction and Development 2015
Contents
1. INTRODUCTION TO EBRD
2. FINANCIAL INSTITUTIONS
3. INFRASTRUCTURE / PPPS
4. ENERGY AND RENEWABLES
5. CORPORATES: AGRIBUSINESS & GENERAL INDUSTRY
6. CAPITAL MARKETS DEVELOPMENT
7. CONTACTS
44
© European Bank for Reconstruction and Development 2015
Contacts
For all further enquiries,
please contact:
Jean-Patrick MARQUET
Director, Turkey
T: +90 212 386 1100
E: MarquetJ@ebrd.com
EBRD Turkey Office
Buyukdere Caddesi, 185
Kanyon Ofis, Kat: 2
34394, Levent
Istanbul, Turkey
www.ebrd.com
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