TASK Water Venture - Equity

cancelled

The EBRD is considering providing a loan of up to €16 million and an equity investment to Turkish water company TASK, a joint venture between the Akfen Group (Turkey) and water company Tahal (Israel) with a view to upgrading and extending water and wastewater infrastructure in project cities/zones operated by TASK including refinancing and acquisitions. EBRD will assist in increasing private sector participation in the water market in Turkey by supporting the Company’s ongoing investment plans and acquisitions. Transition impact for the Project comes from: (i) Increased Private Sector Participation. By supporting TASK, the Bank will be increasing private ownership forms in the water sector in Turkey through restructuring and improving water and wastewater services and will support the Company’s growth and expansion mainly though acquisition of new assets. The project will help to demonstrate that the private sector can be instrumental in implementing improvements in efficiency and increased service level in the water and wastewater sector. (ii) Demonstration effects of good corporate governance, transparency and business standards. TASK, a Turkish private company, is involved in managing and constructing facilities for production of drinking and potable water from surface and surface springs, collecting domestic and industrial water and providing wastewater treatment services. TASK has been awarded concessions for the Gulluk, Corlu, and Kars Water Supply and Wastewater Treatment systems as well as the Dilovasi Industrial Zone Wastewater Treatment and Main Collector Line BOT. Equity: an equity investment for up to 20% in TASK. Debt: up to €16 million long term senior debt primarily for the Dilovasi project including refinancing. Up to €22 million. 1. Screening categories and rationale for classification This project was categorised "B" in accordance with EBRD's 2008 Environmental and Social Policy, indicating that, where there are environmental and social impacts associated with the project, these are likely to be site-specific and easily addressed through mitigation measures. The project will improve the quality and efficiency of water supply and wastewater collection and treatment in Gulluk and wastewater collection and treatment in Dilovasi Organised Industrial Zone. 2. Information reviewed The environmental and social due diligence included a review of the Company corporate environmental, health and safety and social (EHSS) management systems; site visits to Dilovasi and Gulluk; and a review of Concession and Service Level Agreements to assess current performance against EBRD's Performance Requirements (PRs). Due diligence has confirmed that the Company and its operations are generally in compliance with the applicable Turkish environmental, health and safety and labour requirements. A review of the EIA for Dilovasi found that the project has been structured to meet Turkish and EU environmental, social, health and safety standards. Project related documents are available on the Sponsor’s website http://taskgulluk.com/ The Stakeholder Engagement Plan and a summary of the Environmental and Social Action Plans are available at: The EIA for TASK Dilovasi is available at Dilovasi Organize Sanayi Bölgesi Müdürlüğü, Fatih Mah. Fabrikalar Cad. No: 6 Dilovasi-Gebze. 3. Environmental and Social issues Due diligence identified that the Company Corporate Management Systems are largely based on international standards (ISO 14001, ISO 18000), however some additional resources and procedures are needed for the successful implementation of these systems and to achieve compliance with EBRD’s Performance Requirements (PR’s). There are currently no Corporate due diligence procedures for assessing the environmental, health and safety and social risks of projects as part of the investment planning process. 4. Environmental or social opportunities TASK is seeking to invest in the water networks in Turkey to improve the management of water and waste water, to ensure ensuring that water quality and EU standards are met. 5. Summary of Environmental and Social Action Plan An Environmental and Social Action Plan (ESAP) agreed with the Company addresses environmental and social issues identified during the due diligence, associated with the existing facilities and future investments. It aims to achieve and maintain compliance with national and EU standards and EBRD Performance Requirements within a reasonable time-frame. The ESAP includes: None. Tuna Ozaner Levent Loft, Büyükdere Cad. no: 201 Daire: 4 Levent 34394 İstanbul Tel: +90 212 283 09 29 Fax: +90 212 283 2663 E-mail: tuna.ozaner@taskas.com.tr