AkCez II

completed

The proposed investment is a senior loan to Akcez Enerji Yatirimlari Sanayi ve Ticaret A.S.(Akcez) in Turkey, which is a holding company of the electricity distribution, Sakarya Elektrik Dagitim A.S. (SEDAS) and electricity supplier, Sakarya Elektrik Perakende Satıs A.S (SEPAS). SEDAS (the company), which was acquired through privatization in February 2009, is the exclusive electricity distributor in its license region covering the provinces of Sakarya, Bolu, Duzce and Kocaeli. Electricity supplier, Sepas, was unbundled from Sedas in 2013. Akcez is jointly owned and managed jointly by Akkök Holding A.S, Turkey (50%) and CEZ a.s, Czech Republic (50%). CEZ a.s. is an integrated electricity conglomerate headquartered in the Czech Republic with operations in a number of countries in Central and Southeastern Europe and Turkey.SEDAS has approximately 57,000 km of distribution network (~13,000 km is Medium Voltage (MV) V–1kV to 34.5 kV- , ~44,000 is LV Low Voltage -up to 1KV-) consisting of aerial lines and underground lines which forms ~10% of total length. The company serves 1.5 million customers.SEDAS has 7598 transformers, 630,238 poles and 387,988 armatures, whereas 7427 transformers, 22726 poles and 1973 armatures, operated/maintained by SEDAS, are owned by third parties. SEDAS assets also include administrative buildings, client services centers, repair and maintenance units, main warehouses, operational warehouses, small distributed office buildings, transformer stations and a SCADA operation system.The scope of the proposed project is to refinance the outstanding debt of USD 250 m raised in 2010 for the acquisition of SEDAS, and to finance SEDAS capital expenditures in electricity distribution sector in the new regulatory period (2016-2020). Capital expenditures are aimed at providing continuous and high quality electricity distribution services through renewal of the distribution network and capacity increase in order to meet new customers and decrease of technical losses.The investments of SEDAS within the Phase II financing period of the project (i.e. 2016-2020 period) will include:Network capacity increase investmentsNetwork renewal investmentsNetwork improvement investmentsInvestments subject to load distribution changesEnvironment, safety and other legally compulsory investmentsLighting investmentsNetwork operation system investmentsOther expenditures considered investment expendituresNetwork capacity increase and renewal investments aim to cover the demands of new customers who will join the distribution system and to mitigate issues like under-voltage, power scarcity and technical energy losses.