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Turkey: TKYB Renewable Energy and Energy Efficiency On-Lending Facility

SUMMARY

STATUS
Approved
MEMBER
Turkey
SECTOR
Financial Institution
E&S CATEGORY
FI
PROJECT NUMBER
000141

FINANCING

APPROVED FUNDING
USD300 million
FINANCING TYPE
Sovereign

TIMELINE

CONCEPT REVIEW
May 8, 2018
APPRAISAL REVIEW/FINAL REVIEW
September 24, 2019
FINANCING APPROVAL
November 12, 2019
LATEST FIELD VISIT
August 2021
ADDITIONAL FINANCING APPROVAL
October 13, 2021
LOAN CLOSING/LAST DISBURSEMENT
March 2024

OBJECTIVE

To advance Turkey’s renewable energy and energy efficiency infrastructure.

DESCRIPTION

The project will provide long-term financing (sub-loans) through TKYB to privately owned companies in Turkey to invest in projects (subprojects) in the renewable energy and energy efficiency sectors. These include subprojects in the wind solar, geothermal, and biomass industries.

ENVIRONMENTAL AND SOCIAL INFORMATION

AIIB’s Environmental and Social Policy (ESP), including the Environmental and Social Standards (ESSs) and Environmental and Social Exclusion List (ESEL), applies to this on-lending facility. The project has been placed in Category FI, as 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 subprojects meet the conditions of the Operations Manual (OM). The OM includes the selection, appraisal, approval, and monitoring of subprojects, in accordance with AIIB’s ESP requirements. Coal mining, coal transportation or coal-fired power plants, as well as infrastructure exclusively dedicated to support any of these activities will be excluded.

The on-lending facility is expected to support subprojects in renewable energy such as wind, solar, geothermal, and biomass. Land acquisition, occupational health and safety of workers, and impacts on sensitive habitats, ecosystems and its services, are potential ES risks associated with such subprojects.

For all subprojects, 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 others, where applicable, Resettlement Action Plan (RAP) and specialist studies for other subprojects. 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 Grievance Redress Mechanism (GRM) at the subproject level. For all subprojects involving Higher Risk Activities, TKYB shall use a suitably qualified and experienced third-party consultant to conduct the ES due diligence (ESDD) and action plan.

AIIB will conduct prior review and consent of Category A subprojects to be financed using its funds. AIIB will receive subproject appraisal forms for all subprojects, regardless of categorization, and may exercise right of prior review and consent on them. AIIB will conduct ongoing monitoring of Category A subprojects, as well as post-reviews of the selection and implementation of other subprojects as part of its regular supervision, comprising engagement with IDCOL, potential site visits and review of the ES documentation of selected subprojects.

TKYB has disclosed its E&S policy and the relevant ES documents of all subprojects involving Higher Risk Activities on its website. An External Communication Mechanism (ECM) is established 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 https://kalkinma.com.tr/en/contact-us/contact-information in both English and Turkish.

PROJECT TEAM LEADER

Francisco José Fortuny

Senior Investment Operations Specialist

fj.fortuny@aiib.org

 

BORROWER

Ozlem Cinemre

Executive Vice President – Treasury and Financial Institutions

ozlem.cinemre@kalkinma.com.tr

 

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