Zorlu Disco

completed

The proposed investment is a local currency senior loan of up to US$100 million equivalent to a Turkish electricity distribution company, Osmangazi Elektrik Dagitim A.S. (“OEDAS” or the “Company”) to finance their capital expenditure program in the 2017-2020 regulatory period (the “Project”). OEDAS is the exclusive electricity distributor of a region covering five provinces in central Turkey, namely Eskisehir, Afyon, Usak, Kutahya and Bilecik (“OEDAS Region”). It is wholly owned by Zorlu Osmangazi Enerji Sanayi ve Ticaret A.S. (“Zorlu Osmangazi”), a joint stock company incorporated in Turkey. Zorlu Osmangazi also wholly owns Osmangazi Elektrik Perakende Satis A.S. (OEPSAS), the incumbent electricity supply company serving the OEDAS Region as well as other parts of Turkey.  The Company and OEPSAS were acquired at the end of 2016 by Zorlu Enerji Elektrik Uretimi A.S. (“Zorlu Enerji”, or the “Sponsor”), a Turkish power company with approximately 1,100MW of operational assets and active in wholesale electricity trading. Zorlu Enerji is well-known to IFC through two prior investments: the 135 MW Rotor Elektrik wind project in Turkey (Project #27191) and the 56.4 MW wind project in Pakistan (Project #29251) and one investment in progress: 100 MW Zorlu Solar I solar project in Pakistan (#39399). The Sponsor is a subsidiary of Zorlu Holding, one of the largest conglomerates in Turkey, which also owns a gas distribution and supply company. OEDAS provides power distribution services to 1.6 million customers in the OEDAS Region, which has a population of 2.7 million in 194 towns and 1,596 villages, within 59 districts. OEDAS distributed a total net energy of 6.1 TWh in 2016. OEDAS’ distribution network is approximately 43,687 km long (~23,392 km is Medium Voltage (MV) -1kV to 34.5 kV-, ~ 20,295 km is Low Voltage (LV) -up to 1KV-), consisting of aerial lines and underground lines which forms ~ 8.3% of total length. OEDAS has 7,598 transformers, 630,238 poles and 387,988 armatures, whereas 14,891 transformers, 22,726 poles and 1,973 armatures operated and maintained by OEDAS are owned by third parties. OEDAS’ assets also include administrative buildings, client services centers, repair and maintenance units, main and operational warehouses, small distributed office buildings, and transformer stations. OEPSAS provides services through its 37 service centers located in the OEDAS Region. The approximately US$350 million equivalent capex program of the company for the period of project will focus on distribution network investments including expansion, upgrade and rehabilitation which will support improvement in technical efficiency, network stability and service quality. Network operation system investments, metering investments and environment, safety and other legally compulsory investments are also included in the program.