Istanbul, Turkey, June 1, 2018
— IFC, a member of the World Bank Group, EBRD, European Bank for Reconstruction and Development and the Dutch Development Bank FMO have joined forces to finance improvements in the electricity distribution network in Turkey’s Osmangazi region in Western Anatolia.
The financing package of Turkish Lira equivalent of $330 million to Osmangazi Elektrik Dagitim A.S (OEDAS), will help to upgrade, modernisation and expansion of the distribution network which serves around 2.7 million people in 194 towns and 1,596 villages. OEDAS is the electricity distribution company of the Osmangazi region, which includes five provinces: Afyonkarahisar, Bilecik, Eskisehir, Kutahya and Usak. IFC is extending a loan worth US$ 80 million, the EBRD is providing US$ 110 million and FMO is contributing US$ 65 million.
Zorlu Enerji CFO Elif Yener said: “ The new long-term financing in Turkish Lira from international finance instritutions for our distribution company will enable us to focus on improvements in the infrastructure and grids, providing better services to millions of people”.
Improvements are expected to reduce electricity losses and enable the connection of increased solar capacity, as a result saving at least 30.000 tonnes carbon emissions per year. They will also enhance environmental and safety standards and improve efficiency and reliability of supply. These investments are part of a capital expenditure programme required by Turkey's Energy Market Regulatory Authority for the five-year regulatory period between 2016 and 2020.
Wiebke Schloemer, IFC’s Regional Director for Europe and Central Asia, said: “Power sector development is one of the priority areas identified in the World Bank Group’s strategy for Turkey. The financing package in local currency tranches, will help our long-term partner Zorlu Enerji and its subsidiary OEDAS to further improve the quality and reliability of service to over 2.5 million people in provinces of Turkey. The structure of this significant agreement demonstrates IFC’s important role in mobilizing other financial resources and a good example of cooperation between multilateral institutions.”
OEDAS is ultimately owned by Zorlu Enerji which together with its subsidiaries, engages in establishing, renting, and operating electrical energy production plants in Turkey. It is part of the Turkish conglomerate Zorlu Holding.
The World Bank Group has been a long-time partner in the development of power sector in Turkey. Since 2008, IFC consistently continues to support the sector with a series of high impact projects. IFC has financed over 5GW capacity generation by investing or mobilizing more than $3 billion in the Turkish power sector. Turkey is IFC’s second-largest country exposure globally and IFC’s office in Istanbul, established 30 years ago, is one of its largest outside Washington, D.C. providing services across regions.
The EBRD is a major investor in Turkey. Since 2009 it has invested €10 billion in various sectors of the Turkish economy, with almost all investments in the private sector. Earlier this year it invested in the debut bond issuance by Zorlu Osmangazi, the OEDAS parent company.
FMO has long term relations with several key players in the Turkish industry and financial sector. During the last few years, FMO’s Energy Department increased its focus on renewable energy projects. The investments as executed by Zorlu Osmangazi and OEDAS also contribute, among others, to improved state-of-art, more efficient (i.e. reducing losses and CO2-emissions) electrical grids and distribution systems, more smart metering and a dedicated, professional approach to facilitating and managing the intermittency of wind-, solar and hydro powered projects in Turkey.
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In FY17, we delivered a record $19.3 billion in long-term financing for developing countries, leveraging the power of the private sector to help end poverty and boost shared prosperity. For more information, visit