IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
PS1: Assessment and Management of Environmental and Social Risks and Impacts
The Group E&S policies include Environmental, Sustainability, Occupational Health and Safety, and Human Resources Policies. It identifies and manages E&S risks and impacts associated with its planning and operations through compliance with applicable national standards and E&S requirements. It has an integrated ESMS management system following a risk-based approach framework aligned with IFC Performance Standards and certified as per ISO 14001 (Environment), ISO 45001 (OHS), and ISO 9001 (Quality).
In Turkiye, Environmental Impact Assessments (EIA) are not required for electricity distribution lines operations and municipal permits are sufficient for related construction activities. The Group, however, developed its electric lines route survey to screen out biodiversity and social impacts in line with regulatory requirements.
As per ESAP#1, the Group will (i) enhance its Environmental and Sustainability Policy to explicitly address biodiversity, land, community health and safety, and cultural heritage, and to apply the mitigation hierarchy across network design, construction and operations; (ii) develop Gender Based Violence and Harassment E(GBVH) procedures adopting a survivor centric approach in line with PS2 requirements and Good International Industry Practice (GIIP); (iii) develop a Child Protection Policy; (iv) develop traffic and security management plans in line with PS4 and GIIP; (v) enhance its land expropriation procedures in line with PS5 particularly on informal land users;; (vi) update the OHS and environmental contractor specifications and contractor management framework to define responsibilities for managing community, biodiversity, and cultural heritage impacts, and to enhance compliance with labor and working conditions requirements in line with IFC PS 2, including labor management monitoring, access to grievance mechanism, GBVH provisions, and alignment with IFC’s Guidance Note on Worker’s Accommodation: Processes and Standards for provided accommodation; (viii) update the E&S monitoring key performance indicators (KPIs) to reflect these policy and procedure updates, and (ix) strengthen the stakeholder engagement and external grievance mechanism
The updated Policy will be supported by screening procedures to identify the E&S sensitivity of future asset locations based on potential biodiversity impacts on Legally Protected and Internationally Recognized Areas, and associated priority biodiversity values, land access and livelihood, and cultural heritage. These procedures will guide the avoidance of high risk areas and the definition of site specific mitigation measures for each asset.
The Group’s E&S governance structure and staffing capacity are considered appropriate to the scale and nature of its operations and associated E&S risks. Oversight is provided through a Sustainability Committee that reports to the Board of Directors.
At the corporate level, ULUG has a Sustainability Directorate and an Operational Directorate, including dedicated OHS and environmental management teams, both reporting to the CEO. UEDAS maintains an OHS and Environmental Directorate and a Sustainability Team reporting to the General Manager. UPESAS has designated environmental and OHS specialists who also report to the General Manager.
The Group’s ESMS has provisions in place for monitoring and specific teams are responsible for reporting E&S data and results in line with Good International Industry Practices (GIIP). E&S key performance indications (KPIs) for Occupational Health and Safety (OHS), public-related incidents, resource use, compliance to regulations, complaints, community training and notification are reported regularly to leadership and documented in annual reports. The Group uses internal systems as well as third party laboratories and consultants to monitor specific issues and conduct audits. As per ESAP#1, E&S KPIs will have to be expanded to cover site specific issues, including stakeholder engagement, land acquisition, biodiversity, and cultural heritage.
The Group has documented an emergency response plan for its operations. The roles and responsibilities for various teams responsible for fire, earthquake, lightning strike, explosion, etc. are defined and preventative and intervention measures documented, as well as evacuation plans. Fire extinguishers, spill kits, and eye wash stations have been placed at appropriate locations. Drills are conducted regularly and workers are trained in fire safety and operation of fire safety equipment.
PS2: Labor and Working Conditions
The Group employs 3,105 direct workers, of whom 16.5% are women. More than half of the workforce is comprised of blue-collar employees.
The Group maintains a documented Human Resources (HR) framework aligned with Turkish Labor Law No. 4857 and related labor regulations. It also references International Labor Organization (ILO) Fundamental Principles and Rights at Work and the Universal Declaration of Human Rights. It also has specific policies for GBVH, Gender Equality, Human Rights, and Equal Opportunity and Inclusion, Grievance Mechanism, referred to as Speak Up Policy, and Code of Conduct for employees, stakeholders, and suppliers.
The HR Policy set out commitments to equal opportunity and non-discrimination, freedom of association and collective bargaining agreement, and a zero-tolerance to harassment, violence, and child and forced labor. These apply to employees, contractors and suppliers. The HR framework is supported by a set of internal procedures including recruitment and onboarding, working hours and overtime, leave entitlement, training, disciplinary measures and termination These procedures are communicated to workers through onboarding programs and internal announcements.
Blue collar operational workers are represented by the Trade Union and covered by a collective bargaining agreement. Consultations further indicated that several rights and benefits negotiated under the collective bargaining agreement (CBA) are applied across non-unionized blue collar workforce, reflecting the Company’s practice promoting equitable working conditions across. Workers’ consultations conducted in Bursa, Canakkale and Balikesir confirmed that employees are aware of their employment terms and conditions and routinely raise operational issues through line managers.
The Gender Equality and GBVH Policies established a zero tolerance approach to gender based discrimination, harassment and violence aligned with GIIP. The policy specifies that allegations of sexual harassment or violence will be investigated by the Ethics Committee is responsible for overseeing policy implementation and ensuring that appropriate legal and disciplinary actions are taken where violations are identified. These policies apply to all employees, including Board members, and extend to contractors, suppliers and other business partners.
The Human Rights Policy prohibits discrimination in recruitment, promotion, training and employment related decisions and explicitly prohibiting child labor, forced labor and human trafficking, while recognizing freedom of association and collective bargaining. The policies are extended to the contractors and suppliers, across the value chain.
As per ESAP #1, the Group will develop and adopt a written procedure for handling GBVH, which will include a survivor centered approach to its prevention and management consistent with IFC Performance Standards 2 requirements and GIIP. This will include confidential reporting channels, prohibition of retaliation, and survivor-center control over reporting and referral decisions. The Group will provide referral pathways to external medical, psychosocial and legal support services and document that GBVH cases are handled in accordance with the principles of safety, confidentiality, informed consent and non discrimination.
The Group’s worker grievance mechanism provides multiple accessible channels for reporting concerns regarding workplace conduct, ethical violations, discrimination, harassment, and other misconduct. The primary channel is the Uludag Energy Ethics Line, operated by an independent third party provider on a 24/7 basis. Complaints can be lodged via telephone, email, and a web-based platform, with provisions for confidential and anonymous submissions. The Group maintains a strict non-retaliation policy; retaliation against complainants is explicitly prohibited and handled as a disciplinary matter. Alternatively, workers may raise concerns through line management, senior management, internal audit reporting routes, and worker representation and trade union mechanisms which constitute additional avenues for collective issue raising and resolution. Interviews indicate that awareness of formal grievance procedures is uneven across regions.
As per ESAP #2, the Group will increase grievance mechanism awareness program across the Group including site and operational locations. This will be included during employee induction and refresher training, highlighting the confidentiality and non retaliation aspects. The Group has established a comprehensive contractor management framework, which includes supplier code requirements, contractor specific occupational health and safety (OHS) obligations, pre start risk assessments and emergency preparedness documentation, induction and practical safety training, structured audits, digital monitoring tools, incident investigation, and corrective action tracking.
As set out under ESAP #1, the contractor specifications and contractor management framework will be further strengthened to enhance monitoring of contractor labor conditions, in line with IFC Performance Standard 2. This will include oversight of wages and overtime in accordance with applicable labor law, access to grievance mechanisms without fear of retaliation, implementation of updated GBVH procedures, and provision of worker accommodation designed in line with the IFC Worker Accommodation Guidelines, where applicable.
The Group has a comprehensive OHS Management System consistent with GIIP, including monitoring OHS performance across its operations, internal OHS audits, contractor safety inspections, digital video confirmation systems, management safety walks, workplace health inspections, incident investigations and external certification audits, covering employees and contractors. All inspection findings, incidents, observations and corrective actions are recorded and tracked through the Company’s Quality and Document Management System (QDMS), which are followed up until closure of nonconformities. The OHS incident records suggest that the most material OHS risks are associated with electrical hazards, field-based operational work, and contractor lead activities. The OHS and environmental contractor specifications include detailed requirements for the prevention and management of the OHS impacts. The Group maintains formal incident investigation procedures, including root cause analysis and corrective and preventive actions. Investigation outcomes are integrated into operational procedures. It also implements a structured training and capacity building program covering occupational safety, electrical safety certification, technical competency, first aid and emergency preparedness.
The Group monitors and reports occupational health and safety (OHS) leading and lagging indicators on an annual basis. Performance is tracked using key metrics, including total recordable incident rates and fatalities, and is benchmarked against peers within the local industry. In 2025, the Group Lost Time Injury rate (LITFR) in 2025 is 5.9, which has increased compared to the past two years of operations. In line with ESAP #3, The Group will further strengthen its OHS program and benchmarking approach by aligning performance assessment with GIIP (e.g., OSHA and the U.S. Bureau of Labor Statistics), with LTIFR of 4.5, and will enhance its OHS strategy accordingly to support continuous improvement. As per ESAP#4, for the UEDAS’s main warehouse in Bursa where new and decommissioned transformers are stored, UEDAS will monitor the indoor air quality and implement measures such as increasing the air exchange rates in order to minimize workers’ potential exposure to volatile organic compounds (VOCs) and improve overall indoor air quality.
PS3: Resource Efficiency and Pollution Prevention
The Group has implemented measures to improve resource efficiency, including monitoring and setting KPIs to reduce energy, water, and raw material consumption. Greenhouse gas (GHG) emissions are quantified using recognized methodologies. GHG emissions were reported in 2024 as 305,270 tons CO2-equivalent annually. The information is disclosed in the Group’s Sustainability report published on their website. The Group Research and Development team develop technological solutions to reduce transformer-related emissions and electricity distribution losses, contributing to the mitigation of Scope 2 emissions. Water consumption is managed with efficiency and reuse measures, and the client has established goals to further reduce water usage.
The Group demonstrates effective waste management practices, including waste minimization, reuse, and recycling programs. Hazardous and non-hazardous waste is managed in compliance with good international industry practices (GIIP), with secure on-site storage and licensed third-party contractors ensuring proper disposal. The main waste managed by the Group includes: batteries, cables, conductors, transformers, wire, poles. The client maintains an auditable chain of custody for hazardous waste. UEDAS conducted an analysis of parts of old buildings to determine which contained asbestos. Based on the assessment, several asbestos containing parts were removed and disposed of by a licensed contractor. In other places, warning signs were posted and there is a plan to remove asbestos from those sites as well. Within the framework of the Regulation on the Control of Polychlorinated Biphenyls (PCB) and Polychlorinated Terphenyls, UEDAS conducted an analysis of PCB oils found in transformers. Only one transformer was found to have PCB contaminated oil and the transformer is stored properly in a separate part of the warehouse and will be handled by a licensed contractor.
PS4: Community Health, Safety and Security
The UEDAS operates electricity distribution infrastructure in close proximity to communities, including residential areas, public roads, and agricultural land. Community health and safety risks associated with periodic activities such as maintenance works, excavation activities, emergency repairs, substation interventions and contractor implemented field operations are managed through the Company’s operational safety procedures, emergency preparedness response and contractor management systems.
Community health and safety considerations are integrated into operational planning through work authorization processes, risk assessments and verification of safety conditions prior to field interventions. UEDAS has a video confirmation system to provide additional control for visual verification of safe site conditions before work is authorized. Contractor activities are subject to periodic inspections and OHS audits, with findings recorded and tracked through the Company’s corrective action management system. Emergency response plans prepared at regional and sub regional levels address a range of scenarios that may affect surrounding communities, including fire, electrical accidents, natural hazards and other crisis situations, and define communication and coordination procedures during incidents. In line with ESAP#5, the Group will develop and implement a community safety awareness program for local communities and schools to strengthen community safety communication, including localized notices, school engagement initiatives, and information on risks related to network construction and operations, with the objective of preventing accidents and improving public safety.
Each of the UEDAS facilities are constructed in compliance with the relevant local legislation and regulations on life and fire safety, and operations commence only after obtaining the required approval certificate from the Fire Department. As per ESAP#6, UEDAS will conduct a fire safety assessment for the transformer located at the Bursa Branch office , including a review of the current technical design, standard operating procedures, and transformer oil testing results. Based on the assessment outcomes, UEDAS will enhance the fire protection system, as appropriate, through the implementation of active fire protection measures (e.g. deluge systems, adequately sized fire hoses), passive fire protection measures (e.g. firewalls), or a combination of both, in line with GIIP, including relevant National Fire Protection Association (NFPA) codes.
Contracted security presence is maintained at certain operational locations, including warehouse and storage facilities, where armed security personnel are deployed to ensure the protection of infrastructure and operational facilities. As per ESAP #7, the Group will prepare and implement a Security Management Plan defining security rules, procedures, and roles and responsibilities for security personnel engaged at its facilities and operational sites. This will be aligned with IFC’s Good Practice Handbook on the Use of Security Forces: Assessing and Managing Risks and Impacts, and will apply a proportional, preventive and rights respecting approach to security management. This will also include requirements for compliance and training on GBVH, confidentiality, and respectful conduct. Community members will be able to raise concerns related to security arrangements or the conduct of security personnel through the Company’s external grievance mechanism, which is accessible to neighboring communities.
PS5: Land Acquisition and Involuntary Resettlement
Land acquisition for the electric lines network is implemented by UEDAS on behalf of TEDAS which is carried out in accordance with the national expropriation framework (Law No. 2942). UEDAS has established a formal Land Acquisition and Expropriation Procedure covering route determination, stakeholder engagement, valuation, compensation, grievance management, and legal follow up. the procedure applies route planning principles aimed at avoiding and minimizing social and livelihood impacts, consistent with the mitigation hierarchy under PS5. These principles include prioritizing public corridors where feasible, reusing existing line routes, locating poles near parcel boundaries to reduce land fragmentation, and avoiding residential areas and productive assets such as barns, irrigation infrastructure. The procedure further provides for compensation for crop and asset damage that may occur during construction activities. As per ESAP #1, the Group will strengthen its existing Land Expropriation Procedure by including a structured screening and process to identify economic displacement risks for all categories of affected persons, particularly informal land users, including those who are livelihood dependent to it, and document and implement compensation in line with PS5, The procedure will also establish requirements for early consultation with affected persons and local authorities prior to route finalization and land entry. The screening, documentation, and implementation will be codified in the Environment Policy update.
PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources.
UEDAS’s existing infrastructure in Bursa, Balikesir, Canakkale and Yalova is predominantly located in urban areas. However, some of the above-ground distribution lines fall within Legally Protected and Internationally Recognized Areas. UEDAS conducts an E&S risk screening process, including a criteria and assessment scoring system through which, any overlap of distribution line routes with Legally Protected Areas, wetlands, forests and bird migration routes is identified. Construction-phase impacts on forests and associated biodiversity values are mitigated through implementation of the Procedure for Construction Works in Forest Areas. For the distribution lines that are located along the bird migration routes, UEDAS has been working with Doga Dernegi, the local BirdLife partner in Turkiye, and implementing conductor insulation, bird blocker insulation and insulated jumper applications to minimize bird electrocution risks. Insulators are updated as part of annual maintenance activities. As per ESAP#1, the Group will develop and implement a Biodiversity Policy, as part of the Group Environmental and Sustainability Policy update As per ESAP #8, the Group will develop a Biodiversity Screening Procedure in line with PS6, which will build on the group’s existing E&S screening that includes biodiversity considerations and expand it to cover identification of high-risk areas including; (i) both Legally Protected and Internationally Recognized Areas (i.e. Key Biodiversity Areas), and (ii) Internationally Recognized Areas, including areas of Natural Habitat, airspace for bird species (i.e. migration routes), and terrestrial habitats that are significant for bird species and other priority biodiversity values. For new asset locations, UEDAS will review the proposed routes following the Screening Procedure, which, in line with IFC PS mitigation hierarchy, will assess feasibility of limiting infrastructure development to modified habitat or urban areas, and avoiding high-risk areas within Legally Protected and Internationally Recognized Areas. Where avoidance is not possible, UEDAS will engage and consult with relevant stakeholders such as the Regional Forestry Department and conservation organizations, in defining and implementing mitigation measures including insulated overhead distribution cables, insulators on poles, and safe distancing. in alignment with PS6 requirements. For the existing electricity distribution infrastructure in Key Biodiversity Areas, UEDAS will also follow the Biodiversity Screening Project, and similarly consult with relevant stakeholders to identify high-risk areas for bird electrocution. UEDAS will also engage and consult with TEDAS on the technical feasibility of insulation and related permitting requirements. Based on the outcome of the screening and stakeholder consultations, the Group will develop and implement a suite of site-specific Biodiversity Management Plans (BMPs) for both new and existing assets that are identified to be in high-risk areas for biodiversity (ESAP#8). The BMPs will be developed in line with IFC PS1 and PS6 requirements to define mitigation measures commensurate with the risk of existing lines and new assets and report how avoidance and minimization measures are/will be implemented. The Group will insulate poles and lines in high-risk areas in line with a schedule to be determined based on the outcomes of the screening, which will also determine the length of distribution lines and number of poles to be insulated, as well as required time and workforce to do the insulation. .
PS8: Cultural Heritage
UEDAS has established procedures for managing cultural heritage risks, including a Chance Finds procedure integrated into construction contracts. Stakeholder engagement with cultural heritage authorities and affected communities is conducted during project planning to identify and mitigate cultural heritage impacts. Access to cultural heritage sites is maintained or alternative routes are provided. UEDAS collaborates with authorities to address impacts on replicable cultural heritage, applying mitigation measures and restoration efforts. No removal of non-replicable cultural heritage has occurred, and the client avoids impacting critical cultural heritage, complying with relevant laws and consulting with authorities when operating near protected areas. UEDAS demonstrates compliance with national and international cultural heritage laws, though documentation of enhancement opportunities could be improved. As per ESAP#1, the Group’s commitment in implementing the Cultural Heritage and Change Find procedure will be codified in the Environment Policy update.
