The objective is to advance Turkey’s renewable energy and energy efficiency infrastructure.
The project will provide long-term financing (“sub-loans”) through TKYB to privately owned companies in Turkey to invest in projects (“sub-projects”) in the renewable energy and energy efficiency sectors. These include sub-projects in the wind, solar, geothermal, and biomass industries.
For more information about project financing, please review the project summary.
AIIB’s Environmental and Social Policy (ESP) is applicable to this on-lending facility. The project has been placed in Category FI, because the financing structure involves the provision of funds through an FI, whereby AIIB delegates to TKYB the decision-making on the use of AIIB’s funds in so far as the sub-projects meets the conditions of the Operations Manual. This includes the selection, appraisal, approval and monitoring of sub-projects, and the oversight on the companies and projects in line with AIIB’s ESP requirements. AIIB has defined eligibility criteria to restrict the use of AIIB’s proceeds to specific subsectors and ensure their allocation is in line with AIIB’s policies and sector strategies.
Through various discussions and engagements with TKYB, AIIB has helped define TKYB’s Environmental and Social Management System (ESMS) to be materially consistent with the provisions of the Bank’s ESP and relevant Environmental and Social Standards (ESS). TKYB’s ESMS includes an Environmental and Social Policy, an Environmental and Social Exclusion List and E&S screening, categorization, assessment and monitoring procedures and tools applicable to its lending operations.
For all sub-projects, TKYB requires its clients to provide a regulatory environmental impact assessment (EIA), environmental, health and safety clearance certificates and land acquisition related documentation (where applicable). Additionally, TKYB shall require further E&S instruments such as: Environment and Social Impact Assessment (ESIA), Environmental and Social Management Plan (ESMP), specialist studies and, where applicable, Resettlement Action Plan (RAP) prepared by independent specialized E&S consultants for all Category A and selected Category B sub-projects, or an ESMP and specialist studies where applicable for other sub-projects. In all instances, TKYB shall require the disclosure of such E&S documents by its sub-borrowers, engagement with Project-Affected People and the establishment of a GRM at the sub-project level.
AIIB will conduct an E&S review of the initial sub-projects in each sub-sector (e.g. wind, solar, geothermal and biomass) to be financed using its funds. Subsequently AIIB will receive all the TKYB sub-project appraisal forms for review prior to the allocation of AIIB’s proceeds, and may exercise further right of prior review on higher risk sub-projects.
AIIB requires regular reporting on the implementation of the ESMS and performance of sub-projects, and will conduct regular supervision of TKYB’s activities, including visits to selected sub-projects.
TKYB has also been required to establish an external communication mechanism to address third-party views, enquiries or concerns regarding their own E&S processes and outcomes, as well as E&S impacts and performances of their portfolio investments. Inquiries can be made with TKYB on: http://english.kalkinma.com.tr//environment-management-system-contactinformation.aspx (English) or http://www.kalkinma.com.tr/bize-ulasin.aspx (Turkish).