Istanbul, Turkey, March 8, 2022—IFC signed a financing agreement to help modernize electricity distribution in western Turkey, part of an effort to strengthen the reliability of the energy distribution network and provide homes and businesses with a steady supply of power.
IFC will provide a $75 million loan denominated in Turkish lira to Osmangazi Elektrik Dagitim A.S. (OEDAS), a subsidiary of Zorlu Enerji – an existing client and one of Turkey's leading power companies. The financing will support a $350 million capital expenditure program that will see OEDAS upgrade and expand its electricity distribution network in five provinces in western Turkey with a regional population of 2.8 million inhabitants. The work is expected to improve the reliability of power supplies and reduce transmission losses. It is considered critical in Anatolia, where a fast-growing population is putting pressure on an ageing power grid.
Elif Yener, Zorlu Enerji Chief Financial Officer, said: "This is the second long-term financing in Turkish Lira from local and international financial institutions for our distribution company. This financing will enable us to focus on improvements in our regional distribution grids within our 5-year investment plan and deliver electricity to our clients in a reliable and safe manner".
IFC's investment is also expected to help stimulate the adoption of smart meters and smart-grid investments to improve the resilience of Turkey's electricity supply.
The World Bank Group has been supporting Turkey's energy reform and privatization process since the 1990s. Building on the World Bank reforms, IFC has been a long-term investor, supporting the comprehensive reform of the sector in the country.
"In an emerging market economy like Turkey, a steady supply of power is critical for economic growth," said Arnaud Dupoizat, IFC Country Manager for Turkey. "IFC will continue to support Turkey in adopting clear regulations, developing a competitive, liberalized market, and attracting significant private sector investments in both power generation and power distribution".
IFC and Zorlu Enerji are long-time partners. IFC had previously provided long-term funding for OEDAS as part of an earlier capital expenditure program and financed the renewable energy projects of Zorlu
Enerji in Turkey and Pakistan.
The company's latest expansion is to be funded with $350 million in equivalent debt financing from IFC, the European Bank for Reconstruction and Development, the Dutch Development Bank, DenizBank, as well as funding mobilized from Asian Infrastructure Investment Bank.
In Turkey, IFC has invested around $1.2 billion for its own-account and mobilized an additional $1.4 billion to support 10 power generation projects with an installed capacity of 4,300 megawatts. It has also made power distribution investments that have reached improving services for 3.9 million customers.
About Zorlu Enerji
Zorlu Enerji is an integrated utility which is involved in the generation and sale of electricity and steam, electricity and natural gas supply and trade, electricity and natural gas distribution, installation, trade and sale of solar PV panels; design and turnkey construction of power plants, installation and sale of EV charging stations and electric car sharing. Zorlu Enerji's generation portfolio in Turkey includes 2 natural gas, 7 hydroelectric, 1 wind and 4 geothermal power plants, and overseas portfolio comprises 1 wind farm in Pakistan, 1 solar power plant in Palestine and 3 natural gas power plants in Israel. 100% of Zorlu Enerji's electricity generation and 87% of its total installed power in Turkey is based on renewable energy sources.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit www.ifc.org.
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