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Turkey: TSKB Sustainable Energy and Infrastructure On-lending Facility

SUMMARY

STATUS
Approved
MEMBER
Turkey
SECTOR
Financial Institution
E&S CATEGORY
Category B
PROJECT NUMBER
000132

FINANCING

PROJECT TYPE
Stand-alone
APPROVED FUNDING
USD200 million
FINANCING TYPE
Sovereign

TIMELINE

LATEST FIELD VISIT
September 2019
CONCEPT REVIEW
May 8, 2018
APPRAISAL REVIEW/FINAL REVIEW
August 6, 2018
FINANCING APPROVAL
September 28, 2018
LOAN CLOSING/LAST DISBURSEMENT
April 1, 2022

OBJECTIVE

The objective is to support sustainable infrastructure development in Turkey through providing a long-term source of financing.

DESCRIPTION

Loan proceeds will be primarily used to finance renewable energy projects (including solar, hydropower, wind, geothermal and biomass), energy efficiency projects and to a smaller extent, in other infrastructure fields such as transport, water management and treatment, power transmission and telecommunications.

PROJECT FINANCING

For more information about project financing, please review the project summary.

ENVIRONMENTAL AND SOCIAL INFORMATION

AIIB’s Environmental and Social Policy (ESP) is applicable to this on-lending program. The project has been placed in Category FI because the financing structure involves the provision of funds through a financial Intermediary, whereby AIIB delegates to the Borrower the decision-making on the use of AIIB funds insofar as the projects meet the eligibility criteria and environmental and social (E&S) conditions agreed with AIIB, including the selection, appraisal, approval and monitoring of the Sub-projects. AIIB retains the right to conduct prior review of the E&S due diligence of the Sub-projects throughout the course of the facility by engaging with the Borrower.

The Borrower has developed an extensive environmental, social and governance management system with individual policies on sustainability, environmental and social impact, human rights, occupational health and safety and anti-bribery and corruption. These have been disclosed on its website (http://www.tskb.com.tr/en/sustainable-banking/tskbsurdurulebilirlik-yonetim-organizasyonu/our-sustainability-policy).

The Borrower has also developed an exclusion list that is generally aligned with that of AIIB and other multilateral development banks and defined sustainability goals applicable to both the Borrower’s internal operations and to the management (including identification, quantification and mitigation of environmental and social risks induced by their activities and services). For that purpose, in addition to the use of the TSKB-developed Environmental Risk Evaluation Tool (ERET)—which conforms with Turkish regulatory requirements and international standards such as AIIB’s ESP and Environmental and Social Standards (ESSs), the IFC Performance Standards and EBRD Performance Requirements—the Borrower has developed an extensive set of procedures and framework plans comprised in an Environmental and Social Management System (ESMS). The project team has assessed that the Borrower’s ESMS is materially consistent with the provisions of AIIB’s ESP and relevant ESSs.

The Borrower shall conduct screening to identify higher-risk transactions, categorize Subloans into a four-tier (A, B+, B- and C) system of categories reflecting environmental and social risks and impacts, complete E&S due diligence and appraise potential Sub-loans accordingly.

The Borrower shall require its Sub-borrowers to develop instruments proportionate to the level of E&S risks and impacts of their activities and commit to regular monitoring and reporting against the applicable E&S standards. The Borrower integrates relevant E&S covenants and where necessary a legally binding Environmental and Social Action Plan in its Sub-loan agreements.

The Borrower is required to conduct regular monitoring of the Sub-projects, report to AIIB on a semiannual basis on compliance status of all ongoing Sub-projects and present corrective actions for any noncompliance. AIIB will conduct annual supervision of the Borrower, including site visits and documentation review of selected Sub-projects.

PROJECT TEAM LEADER

Seung Myun Lee

Senior Private Sector Operations Specialist

sean.lee@aiib.org

 

BORROWER

Coşkun Kanberoğlu

Department Head
Development Finance Institutions
Turkiye Sinai Kalkinma Bankasi A.S.

kanberoglu@tskb.com.tr

 

IMPLEMENTING ENTITY

Coşkun Kanberoğlu

Department Head, Development Finance Institutions TSKB

kanberoglu@tskb.com.tr

 

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