Washington, D.C., September 21, 2005
—The International Finance Corporation, the private sector arm of the World Bank Group, has signed an agreement with Palmet Metal Endüstri ve Ticaret A.ª. in Turkey to provide $12 million for its gas distribution activities. This is IFC’s first financing of a company in Turkey’s natural gas distribution sector.
IFC’s financing package consists of a $5 million loan to Palmet’s subsidiary operating in Gebze, Palgaz Doðalgaz Daðitim Sanayi ve Ticaret A.Þ. (Palgaz); a $2 million loan to Palmet’s subsidiary operating in Erzurum, Palen Enerji Doðalgaz Daðýtým Endüstri ve Ticaret A.Þ. (Palen); and a $5 million standby loan for future concessions. The proceeds of these loans will be used to fund the subsidiaries’ gas network expansion programs.
Established in 1984, Palmet’s main activities include IT and telecommunications infrastructure, high-precision air conditioning manufacturing, raised access floor manufacturing, and, most recently, natural gas distribution. Palmet has captured a significant market niche in the telecommunications areas and has worked with all major sector players in Turkey, including service providers and equipment suppliers.
Palmet made a strategic decision to invest in Turkey’s gas distribution sector six years ago, with a view to diversifying into a regulated utility business and to leveraging the close links to international contractors and utility service providers that it has established through its telecommunications work.
Francisco Tourreilles, IFC’s Director for Infrastructure, said, “We are pleased to support Palmet’s investment in gas distribution as part of Turkey’s privatization program for the sector. The expansion of natural gas coverage in the areas Palmet covers will translate into significant benefits to industry and residential consumers, by lowering fuel costs and improving environmental performance.”
Doganay Samuray, General Manager of Palmet, said, “Palmet was one of the first companies to bid for and win gas distribution licenses in Turkey. With technical support from our partner, Terasen, and with financial backing from IFC, Palmet expects to succeed as we complete and operate the projects in Gebze and Erzurum and as we develop other gas projects in Turkey.”
Shahbaz Mavaddat, IFC’s Associate Director for Southern Europe and Central Asia, added, “The role of natural gas in Turkey’s energy matrix is at a key stage of development, and companies like Palmet are essential in its success. We are very pleased to have signed this agreement as our first financing in Turkey’s gas distribution sector, and we hope this will be the first of many projects in the sector.”
The International Finance Corporation, the private sector arm of the World Bank Group, promotes sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. Its 178 member countries provide its share capital and collectively determine its policies.
From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit
www.ifc.org
.
