The transaction will be the first EBRD loan linked to the new Turkish Lira Overnight Reference Rate (TLREF) benchmark
The European Bank for Reconstruction and Development (EBRD) has approved a $100m loan in Turkish lira equivalent to electricity company Enerjisa Enerji to support the expansion of power distribution network in Turkey.
Enerjisa Enerji is a joint venture between industrial conglomerate company Sabanci and German electricity E.ON, with each holding a 40% share while the remaining 20% is free float shares on Turkey’s stock exchange, Borsa Istanbul.
The company serves 21 million people through its electricity distribution and retail business.
EBRD loan will support Enerjisa Enerji’s investment programme in Turkey
The bank loan will finance Enerjisa Enerji’s ongoing investment programme in the country.
EBRD stated that the deal will be its first loan linked to the new Turkish Lira Overnight Reference Rate (TLREF) benchmark, which is expected to become the reference rate for corporate lending in Turkey.
The TLREF is a new risk-free rate, developed by the Turkish government, regulator, Borsa Istanbul and other market participants with advice from the EBRD Treasury.
Enerjisa Enerji CFO Michael Moser said: “After the issuance of first-of-a-kind CPI-linked corporate bonds, Enerjisa Enerji has now completed its first corporate loan linked to the new TLREF, which will deepen this benchmark.
“The EBRD financing will be used for the improvement of electricity infrastructure, and for sustainable and high-quality energy supply and technology investments.
“We are delighted to cooperate and expand our relationship with the EBRD, one of the strongest supporters of Turkey’s private sector, in this landmark transaction.”
Under the agreement, the two parties will also collaborate to advance equal opportunities in the power sector, with a focus on supporting women’s access to employment in the sector.
EBRD Energy Eurasia director Aida Sitdikova said: “We are very pleased to expand our relationship with Enerjisa Enerji, which we see as a flagship company in the Turkish power sector, as illustrated by this transaction with the new TLREF benchmark which will support the development of the Turkish capital market.”
Since 2009, the EBRD has invested approximately €12bn ($13.34m) in 302 projects in Turkey, the majority of which are in the private sector.