Arcelik GET and R and D

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A long-term loan of up to EUR 150 million (or the equivalent in TRY) to Arcelik A.S. (the "Company"), a Turkish company engaged in production, sales and aftersales services of consumer durable goods and consumer electronics, to finance energy and resource efficiency investments at the Company's refrigerator plant in Eskisehir and washing machine plant in Cayirova, as well as the planned investment in a new R&D technology centre in Istanbul. The Project is in line with EBRD's Strategy for Turkey as it supports (i) competitiveness of Arcelik and the consumer durables industry overall through financing R&D investments and new product development; and (ii) the energy and resource efficiency improvements both at the production facility and at the consumer level. The Project is also aligned with the EBRD's Green Economy Transition (GET) Approach given the associated CO2 emission savings. The transition impact of the Project will be derived from: (i) the Competitive quality as a portion of Bank financing will be used for establishment of a large scaled technology centre, improving Arcelik's innovation capabilities and its cooperation with local universities; and, (ii) the Green quality, where through modernization investments in the production processes, development of new energy and resource efficient products and construction of an LEED certified R&D building, c. 90K tonnes per annum direct and indirect CO2eq savings are expected. In this respect, the Project is fully aligned with GET. ARCELIK AS Arcelik A.S. is a joint stock company incorporated in Turkey for production, sales and aftersales services of consumer durable goods and consumer electronics. Established in 1955 in Istanbul, Arcelik is the leading white goods manufacturer of Turkey and has 20 different production facilities in 8 countries including Turkey, Romania, Russia, China, South Africa, Pakistan, Thailand, and India. The Company is majority owned and controlled by Koc Group, the largest industrial conglomerate in Turkey, with a 57.24% shareholding, while Burla Group has a 17.61% shareholding in the Company. The remaining 25.15% stake of the Company is listed on Borsa Istanbul. EUR 150,000,000.00 EUR 166,200,000.00 Categorised B (2014 ESP). Investment into CAPEX and energy efficiency improvements for a durable consumer goods manufacturer are associated with environmental and social risks which are site-specific and can be addressed by means of implementing an Environmental and Social Action Plan ("ESAP"). The ESAP has been prepared following the outcomes of a comprehensive corporate ESDD and has been agreed with the Company. Environmental and Social ("E&S") due diligence ("ESDD") has been undertaken by an independent consultant and focused on review of the corporate E&S management systems, regulatory compliance status, operational practices and supply chain management. The evaluation established that the Company is generally in compliance with the requirements of the EBRD's Performance Requirements ("PR"s) and national E&S regulatory requirements. The ESDD confirmed that the Company has well-established environmental, health and safety and social management systems in place and is able to deliver the Project in compliance with the Bank's requirements. The potential adverse impacts are low and mainly include labour and safety, emissions, wastes and supply chain management. In order to address the gaps identified in the process of the ESDD, the Borrower will be required to implement an ESAP, which includes, inter alia, further upbringing of the existing corporate environmental and safety management systems across all businesses; improvements of the HR practices, including implementation of the grievance mechanism, social accountability standards; addressing issues associated with hazardous materials and wastes; promotion of the safe operational practices and; enhancement of supply chain and contractor management. Non-Technical Summary Technical Cooperation of approximately EUR 36,000 was used to assess current status and impact of new investment plans on the Company's energy and environmental performance, funded by the EU IPA 2013 - "EBRD i EU Energy Efficiency and Renewable Energy Programme for Turkey" under the Near Zero Waste (NOW) programme. Hande Saridal investorrelations@arcelik.com +902123143434 +902123143490 www.arcelikas.com Karaagaç Cad. No: 2-6, Sutluce-34445; Istanbul, Turkey