PROJECT

Projects

Environmental & Social Review Summary

Project Number

45265

Company Name

OSMANGAZI ELEKTRIK DAGITIM AS

Date ESRS Disclosed

Sep 15, 2021

Country

Turkiye

Region

Central Asia and Turkiye

Last Updated Date

Feb 19, 2025

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Dec 21, 2021
Signed : Mar 7, 2022
Invested : Apr 1, 2022

Sector

Distribution Business

Industry

Infrastructure

Department

Regional Industry INF MCT

Project Description

Osmangazi Elektrik Dagitim A.S. (“OEDAS” or the “Company”) is an electricity distributor serving a region covering five provinces in central Turkey, namely Eskisehir, Afyon, Usak, Kutahya and Bilecik (“OEDAS Region”). It is owned by Zorlu Osmangazi Enerji, Sanayi ve Ticaret A.S. (“Zorlu Osmangazi”), a joint stock company incorporated in Turkey in 2016 by Zorlu Enerji Elektrik Uretim A.S. (“Zorlu Enerji”, or the “Sponsor”), a Turkish power company with approximately 1,300MW of operational assets in Turkey, Israel and Pakistan. Zorlu Osmangazi also wholly owns Osmangazi Elektrik Perakende Satis A.S. (“OEPSAS”), the incumbent electricity supply company serving the OEDAS Region and OEPSAS follows the sponsor’s corporate management systems.

IFC had a previous investment in OEDAS through Zorlu Disco 1 (project #39691 – https://disclosures.ifc.org/enterprise-search-results-home/39691). The sponsor is also well-known to IFC through two prior investments: the 135 MW Rotor Elektrik wind project in Turkey (Project #27191-https://disclosures.ifc.org/project-detail/ESRS/27191/rotor-elektrik-uretim-a-s) and the 56.4 MW wind project in Pakistan (Project #29251-https://disclosures.ifc.org/project-detail/ESRS/29251/zorlu-pakistan). 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 has 1.9 million subscribers serving a population of 2.8 million in 125 towns and 1,457 villages, within 59 districts. OEDAS has a distributed total net energy of 6,777 TWh in 2020 and a distribution network of approximately 50,787 km long (~24,202 km is Medium Voltage (MV) -1kV to 34.5 kV-, ~ 26,585 km is Low Voltage (LV) -up to 1KV-), consisting of aerial lines and underground lines which forms ~ 16.3% of total length. OEDAS has 43 repair and maintenance units and five main warehouses distributed in OEDAS regions. OEDAS’ assets also include administrative buildings, client services centers, small office buildings, and transformer stations.

The proposed IFC investment is an A Loan for up to US$75 million equivalent in Turkish to support the Company’s capital expenditure program in the 2021-2025 regulatory period (the “Project”). The approximately US$400 million equivalent capex program of the Company for the period of the project includes 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, environment, safety, and other legally compulsory investments are also included in the program. 

Overview of IFC's Scope of Review

IFC’s review of the proposed investment consisted of appraising environmental, health and safety (EHS), occupational health and safety (OHS), contractor management and social related information submitted by the Company, publicly available reports such as sustainability reports, EHS policies, human resources policy and procedures, code of business ethics, biodiversity assessment procedures as well as the following documents:

- Environmental and Social Assessment of Osmangazi Elektrik Dagitim A.S. (OEDAS) Project, prepared by consultant, ACE, July 2021,

- Stakeholder Engagement Plan, revised by consultant, ACE, July 2021,

- Non-technical Summary, prepared by consultant ACE, August 2021.

- Review of Land Acquisition Procedure, prepared by consultant ACE, August 2021.

- OEDAS Financing - Review of 2021 - 2025 Investment Program Due Diligence Report, prepared by consultant, Mott Macdonald, August 2021.

- Ecological and Ornithology Research and Assessment Reports, prepared by consultant, ECOGEN, 2018 and 2020.

Given current travel restrictions related to the COVID-19 pandemic, IFC conducted follow up video conferences with OEDAS’ teams of Business Development and Sustainability Management, EHS and OHS Management, HR Management, Real Estate and Construction Management, Legal and Compliance in corporate headquarter between August 18 and 19, 2021. The regional manager and workplace representative of the union were also interviewed as part of this review. An interview of the Sponsor’s sustainability manager was also conducted. Key focus areas of the virtual conferences included OHS, community health and safety, labor, contractor management, land acquisition, waste management and security. The appraisal will be supplemented with a field review after COVID-19 travel restrictions are removed.

IFC’s appraisal built upon the performance of the company and the sponsor during the following previous investments: (i) Rotor Elektrik (project #27191, Category B, disclosed on July 28, 2008); (ii) Zorlu Enerji Pakistan, (project #29251, Category B, disclosed on April 11, 2011) and (iii) Zorlu Disco 1 (project #39691, Category B, disclosed on February 26, 2018). The E&S performance of all the projects is satisfactory.

E & S Project Categorization and Applicable Standard

Environmental and Social Mitigation Measures

Stakeholder Engagement

Broad Community Support

Environmental & Social Action Plan