Project Pita

Project Description

Senior secured loan of up to USD 28 million to be disbursed in TRY to Uludag Elektrik Dagitim A.S. (“UEDAS” or the “Borrower”).

UEDAS is the electricity distribution network operator in Bursa, Balikesir, Canakkale and Yalova provinces of Turkiye.  It is ultimately owned by Actis Long Life Infrastructure Fund (“Actis”) through the parent company ULUDAG Elektrik Dagitim ve Perakende Satis Hizmetleri A.S. Actis is an experienced, sustainable infrastructure focused fund. 

Project Objectives

The project will finance the implementation of 2023 & 2025 CAPEX investment plan agreed with the Energy Market Regulatory Authority for the fourth regulatory period (2021 & 2025).

Transition Impact

ETI score: 69

The Transition Impact of the project will be derived from:

Inclusive

Through the Project, the Borrower will introduce a new, accredited and gender-responsive skills development programme in partnership with a local education provider.  The Borrower will also further develop partnerships with education providers to promote STEM careers for young women through a women-focused initiative.

Green

EBRD financing will enable the successful implementation of the Borrower’s investment plan, which aims to upgrade and modernise the existing electricity distribution network improving the reliability of power supply and leading to a reduction in electricity losses.

Client Information

ULUDAG ELEKTRIK DAGITIM AS

EBRD Finance Summary

USD 28,000,000.00

Total Project Cost

USD 212,000,000.00

Additionality

The Bank’s additionality mainly derives from:

• Financing Structure: The Bank’s financing is key for UEDAS’ capex implementation given the limited funding sources available for the Borrower in local currency for the required tenor due to constraints of local banks and unfavourable macroeconomic conditions.
• Risk mitigation: The Borrower will mitigate environmental, social and governance risks through the agreed ESAP.
• Standard-setting: The Borrower will promote youth inclusion and enhance the role of women in this traditionally male dominated sector.

Environmental and Social Summary

The Project is Categorised B (2019 ESP). The environmental and social due diligence (“ESDD”) for the Project, was undertaken by an independent environmental and social (“E&S”) consultant. The ESDD comprised of an E&S assessment of UEDAS corporate arrangements, a review of UEDAS capacity, past E&S performance, engagement with UEDAS management and site visits to urban and rural premises associated the UEDAS network operations. 

ESDD confirmed that UEDAS has established an integrated management system (“IMS”) that includes systems for quality, environment, occupational health and safety (“OHS”), customer satisfaction, information security, and business continuity.  The IMS covers all site operations of UEDAS.  It was confirmed that UEDAS has recently embarked upon an ambitious sustainability plan including the development of organisational capacity, which includes the establishment of a sustainability department.  The recent lenders visit confirmed that UEDAS have recently increased their E&S capacity.  Other arrangements recently improved include E&S arrangements related to waste management, hazardous substance management and resource efficiency.  UEDAS have also recently carried out a study of transformers confirming the presence of polychlorinated biphenyls (“PCB”).  This was confirmed to be very limited and a programme of testing transformers to identify the presence of any PCBs continues.  Human resources policies are in line with PR2 requirements and UEDAS have recently confirmed a collective bargaining agreement was recently signed between UEDAS and the union representing the employees.

UEDAS confirmed that it is currently assessing building and premises under their control to assess seismic risks, and where necessary these structures are being improved or reconstructed. Contractor management arrangements within UEDAS include standard OHS and environmental clauses in contracts, although these arrangements would benefit from further development to ensure improved performance monitoring of contractors.  A draft land acquisition procedure has been developed and UEDAS confirmed there has been no physical displacement.  Expropriation is associated with electrical network poles and confirmed to be a small area.  During the lenders site visit, a number of local community representatives whose communities were previously affected by land acquisition, were consulted.  Generally, no issues or concerns were raised during the consultations with local community representatives. Positive feedback was shared to lenders during the site visit related to the ongoing network upgrade, with the community recognising the improved service performance. Further areas identified during ESDD requiring development include occupational health and safety, biodiversity and hazardous substance management, traffic management, access to information and stakeholder engagement.

A comprehensive environmental and social action plan (“ESAP”) has been developed and agreed with UEDAS.  The ESAP has been structured to bring UEDAS into compliance with the Banks Performance Requirements (“PR”s).  The ESAP includes further development of the E&S management arrangements and includes the requirement to undertake a biodiversity assessment, further development of contractor management arrangements including OHS and environmental management plans and cascading these to contractors, finalisation and implementation of land acquisition procedure.  HR procedures are to be further developed and the enhanced or trainings to workers and contractors, and the continued implementation of UEDAS equal opportunities plan.  The development of Key Performance Indicators (KPIs) for monitoring of E&S performance of contractors will also be developed.  A stakeholder engagement plan has been developed and will be implemented by UEDAS.  An independent lenders adviser will be appointed to monitor project progress and report to Lenders periodically in additions to the requirement to report to the EBRD annually on E&S matters.

Technical Cooperation and Grant Financing

The Bank will provide support the Borrower by contracting specialised consultants to support the inclusion related work streams.

Company Contact Information

Duygu Tokgoz
dtokgoz@uludagenerji.com.tr
+90 224 600 00 00
https://www.uedas.com.tr/
Cirpan Mah.
Stadyum Cad. No: 40
Osmangazi / BURSA/ Türkiye

Implementation summary

PSD last updated

16 Aug 2023

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

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General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD’s Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank’s countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.