Beijing, March 08, 2022
AIIB Signs USD75-M Loan in Turkish Lira for Electricity Distribution Network Upgrade
The Asian Infrastructure Investment Bank (AIIB) is helping Turkey finance Infrastructure for Tomorrow (i4t) through a USD75-million loan commitment that will contribute to the expansion, rehabilitation and improved efficiency of the electricity distribution network of Osmangazi region, a landlocked area located in the western part of Turkey.
AIIB’s first Turkish-lira-denominated non-sovereign loan was signed yesterday with Osmangazi Elektrik Dağıtım AŞ (OEDAŞ), the electricity distribution company indirectly wholly-owned by Zorlu Enerji, which is the incumbent operator of the medium- and low-voltage network in five western provinces of Turkey (Afyonkarahisar, Bilecik, Eskişehir, Kütahya and Uşak). OEDAŞ services approximately 1.9 million end-users across 125 towns and 1,455 villages.
This is AIIB’s first non-sovereign backed financing to an electricity network concession and paves the way for future investments in the regulated industries sector. Proceeds from the financing will support OEDAŞ’s efforts to procure, construct and operate medium- and low-voltage overhead lines, underground lines, transmission connection lines and transformers.
The AIIB loan is part of a USD350-million-equivalent club financing that includes the European Bank for Reconstruction and Development, the International Finance Corporation, the Netherlands Development Finance Company and Denizbank AŞ, part of Emirates NBD. The loan is also AIIB’s first co-financing with IFC and FMO in Turkey.
“The project will contribute to three of AIIB’s thematic priorities, namely green infrastructure, private capital mobilization and technology-enabled infrastructure,” said Supee Teravaninthorn, Director General, Infrastructure Investment Department (Region 2). “We look forward to working with Zorlu Holding and our financing partners in order to contribute to the expansion and digitalization of the electricity distribution network of the Osmangazi region.”
Turkey initiated the liberalization of its electricity distribution sector in 2004 by auctioning the operating rights of 21 distribution regions to private operators. The reforms helped the private sector mobilize substantial capital to expand and modernize Turkey’s distribution networks amid growing electricity demand.
The loan also establishes a new relationship between AIIB and Zorlu Group, an industrial conglomerate that operates across several sectors including textiles, consumer electronics and household appliances, energy, property, mining, metallurgy, financial services, aviation and tourism.
Zorlu Enerji CFO, Elif Yener, said: “This financing shows the confidence of the international financial environment towards the Turkish economy. It is our second long-term financing in Turkish Lira from an international finance institution and the first time with AIIB for our group company OEDAŞ, which provides electricity distribution service in Osmangazi region. These local-currency debt funds will enable us to bring our installation capacities to every single corner of the region within our 5-year investment plan, which aims to provide better services to millions of people."
AIIB has been active in Turkey since 2018, supporting projects to help address the country’s climate commitments and support the development of energy-efficient transport systems. To date, AIIB has committed over USD3.5 billion through 15 projects in various sectors across the Turkish market.
The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank whose mission is financing the Infrastructure for Tomorrow—infrastructure with sustainability at its core. We began operations in Beijing in January 2016 and have since grown to 105 approved members worldwide. We are capitalized at USD100 billion and Triple-A-rated by the major international credit rating agencies. Working with partners, AIIB meets clients’ needs by unlocking new capital and investing in infrastructure that is green, technology-enabled and promotes regional connectivity.
About Zorlu Enerji
Zorlu Enerji is an integrated utility which is involved in the generation and sale of electricity and steam, electricity and natural gas supply and trade, electricity and natural gas distribution, installation, trade and sale of solar PV panels; design and turnkey construction of power plants, installation and sale of EV charging stations and electric car sharing. Zorlu Enerji's generation portfolio in Turkey includes 2 natural gas, 7 hydroelectric, 1 wind and 4 geothermal power plants, and overseas portfolio comprises 1 wind farm in Pakistan, 1 solar power plant in Palestine and 3 natural gas power plants in Israel. 100% of Zorlu Enerji's electricity generation and 87% of its total installed power in Turkey is based on renewable energy sources. As of February 2017, Zorlu Enerji took over 100% shares of Osmangazi Elektrik Dağıtım AŞ (“OEDAŞ”), which is responsible for electricity distribution in the provinces of Afyonkarahisar, Bilecik, Eskişehir, Kütahya, and Uşak, and Osmangazi Elektrik Perakende Satış AŞ (OEPSAŞ), which is the assigned electricity supplier for regulated users in the same region.
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