Project Yildiz loans

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Project Description This PSD relates to a historical Bank project approved some years ago, and does not represent a new approval, or allocation of new funds.  Disclosure of this PSD was deferred in accordance with the transparency framework in place at the time, but due to an administrative oversight, was not subsequently disclosed The Board of Directors approved a facility of three loans to Ülker Bisküvi Sanayi Anonim Şirketi (the Company) and its subsidiaries to enable them to finance their capital investment programmes, including procurement and upgrade of machinery and equipment and introduction of innovative packaging solutions. Project Objectives The Company – one of Turkey’s best known-brands with a diverse confectionery product portfolio – is a fast growing player with presence in many international markets.  The availability of these loans permitted the Company and its subsidiaries to finance their capital investment programmes, including: procurement and installation of new production and packaging lines, upgrading existing equipment with resource efficiency improvements, increasing operational and resource efficiency, improving worker conditions and hygiene and food security standards, and introducing innovative packaging solutions to reduce the environmental footprint of their products and operations. Transition Impact The project was anticipated to have transition impact attributable to the ‘Green’ quality, on the basis that the planned modernisation of the Company’s manufacturing would result in considerable resource efficiency improvements, and reduce the Company’s environmental footprint. Additionality The Bank’s additionality was derived from the long-term nature of the debt financing, otherwise not available in the market.  Further, the structure of EBRD financing permitted dialogue to enhance corporate governance standards on matters including managing conflicts such as political and charitable donations as well as counter terrorist financing, and delivering compliance training to all staff.  The EBRD also provided technical support for implementation of resource efficiency investments, not otherwise available alongside financing . Environmental and Social Summary Determined to be a Category B transaction, given the nature of the activities undertaken by the Company.  Environmental and social due diligence confirmed the adequacy of environmental and operational permits, and the Company’s adherence to various international standards including relating to food safety and quality.  The Company was found to have sustainability initiatives in place, including regarding water use reduction, waste generation reduction, energy efficiency improvements, and carbon emission reductions.  An environmental and social action plan was developed and agreed, under which the Company was required to report annually to the EBRD on environmental and social issues. Technical Cooperation The Project was been supported by TC funds from the EU Instrument for Pre-Accession programme, aimed at supporting implementation of waste minimisation and packaging material reduction measures.