OSMANGAZI ELEKTRIK DAGITIM A.S.
Status: Approved investmentWhy disclosure?
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In case of questions
In case of questions, please contact us at disclosure@fmo.nl
Disclaimer
The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.
Who is our customer
Osmangazi Elektrik Dagitim A.S. ("OEDAS") is established in Turkey. OEDAS is one of the twenty-one regional electricity distributors covering five provinces in central Turkey. OEDAS is owned by Zorlu Osmangazi Enerji Sanayi ve Ticaret A.S. ("Zorlu Osmangazi"), which in turn is part of the Zorlu Holding/Group.
What is our funding objective?
OEDAS plans to invest >USD400m during the period 2021-2025. For the financing of the required investments, FMO provides a senior long term loan in local currency ("TRY") up to the equivalent of USD100m out of which USD25m is uncommitted. FMO co-invests with International Finance Corporation (IFC"), European Bank for Reconstruction and Development ("EBRD"), the Asian Infrastructure Investment Bank ("AIIB") and DenizBank A.S. ("DenizBank"). OEDAS will fund the remainder from its cash flows. The investment objective and rationale are as follows: (i) the reconstruction and modernization of OEDAS' existing substations and lines and replacement of outdated equipment; (ii) the expansion of the automated electricity metering system (reading and billing); (iii) the expansion of the network and connection of new users; and (iv) installation of a new automatic control system and other auxiliary investments. For OEDAS' investments during 2017-2020, IFC, EBRD, Denizbank and FMO signed their first loan agreements in May 2018, with FMO then taking a USD65m (in local currency equivalent).
Why do we fund this investment?
OEDAS' investments contribute to among others an improved distribution network with lower technical losses, better metering and more electricity to end-users in need. Supporting the funding of OEDAS' investments does fit well with FMO's strategy, which includes among others (i) contributing to energy savings (by among others reducing technical losses, better metering, etc.) and (ii) enabling more and better connections with all end-users of electricity. FMO's Green and Reducing Inequalities Labels do also apply to this transaction.
What is the Environmental and Social categorization rationale?
FMO's E&S category for this transaction is B+, reflecting health and safety risks to employees and communities, and potential impacts on informal land users, biodiversity and cultural heritage. IFC PS1-4 are triggered; 5, 6 and 8 may potentially be triggered due to the nature of the distribution network, spread over the country. IFC PS7 is not expected to be triggered as the project is not likely to impact communities of indigenous people. Explicit reference is made to EBRD?s ex ante Disclosure and Project Summary Documents: this can be found at EBRD?s website (i.e.: https://www.ebrd.com/work-with-us/projects/psd/52705.html).
More investments
| Date | Total FMO financing |
|---|---|
| 5/31/2018 | USD 65.00 MLN |
- Region
- Europe & Central Asia
- Country
- Türkiye
- Sector
- Energy
- Publication date
- 9/14/2021
- Effective date
- 12/17/2021
- Total FMO financing
- USD 75.00 MLN
- Funding
- FMO NV
-
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk
Environmental & Social Category
(A, B+, B or C) - B+