46788 - YKL Climate

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Summary of Investment Information

Project Number

46788

Company Name

YAPI KREDI FINANSAL KIRALAMA ANONIM ORTAKLIGI

Date SPI Disclosed

Aug 22, 2022

Country

Turkiye

Region

Central Asia and Turkiye

Projected Board Date

Sep 22, 2022

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Mar 23, 2023

Department

Regional Industry FIG MCT

Industry

Financial Markets

Previous Events

Approved : Sep 29, 2022
Signed : Sep 30, 2022
Invested : Oct 14, 2022

Sector

Leasing Services

Project Description

The project is a senior unsecured loan up to US$120 million to Yapi Kredi Leasing (?YKL?), a long-standing IFC client in T?rkiye to finance eligible Climate Change Mitigation and Adaptation Projects in T?rkiye. The proposed financing will support the development of T?rkiye?s Climate Finance market by providing an innovative new product to the largest leasing company which has an extensive reach into the small and medium enterprises (?SME?) segment.

Established in 1987, Yapi Kredi Leasing is a fully owned subsidiary (99.99%) of Yapi Kredi Bank, the third largest private bank in T?rkiye by assets. The Company benefits from the extensive network of Yapi Kredi, its client base, underwriting procedures and risk management policies.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	80.0
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Syndications	Labeled: Green;Blue;Social-Loans/Bonds
Straight Senior Loan	Labeled: Green;Blue;Social-Loans/Bonds
Syndications	Labeled: Green;Blue;Social-Loans/Bonds

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

The most significant expected project-level outcome is increased access to climate finance, including climate mitigation and adaptation financing in the form of green and blue leasing loans for SMEs. Beyond the Project, IFC anticipates that the Project will increase the market?s sustainability by catalyzing other market participants to also engage in blue financing via innovation and demonstration channels.

Financing structure : IFC will provide counter-cyclical 3-year funding to support the growth of YKL?s green portfolio and launching a new blue leasing product at a time when there is no access to such funding available on the market. ? Knowledge Sharing and Capacity Building: IFC will support YKL to establish a blue finance portfolio, identify blue projects within its portfolio and pipeline in line with IFC?s blue finance taxonomy, and eventually help the Company develop its blue finance strategy and a blue finance framework.

E&S Category Rationale / Risks and Mitigation

IFC’s investment proceeds will be used to support the Yapi Kredi Leasing’s climate-related business lines i.e., green and blue segments of leasing portfolio for Turkish SMEs. Overall E&S risks associated with these transactions is considered as medium and therefore, the project has been categorized as FI-2 in accordance with IFC’s Sustainability Policy. IFC fund will not be used to support any activities on IFC Exclusion List, coal-related activities, solar projects, or higher risk business activities that may include: a) involuntary resettlement, b) risk of adverse impacts on indigenous peoples, c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage or d) significant occupational health and safety risks. For this investment, the client will be required to screen eligible SMEs loans against the IFC Exclusion List, and Turkish E&S laws and regulations. In addition, Yapi Kredi Leasing will continue to be in line with Life & Fire safety requirements and the requirements of IFC’s Performance Standard 2 on Labor and Working conditions.

As an existing IFC’s client, YKL established and implements its ESMS. The ESMS is applied to the YKL’s SME portfolio and outlines the E&S policy, procedures, tools, monitoring, reporting and responsibilities for E&S risk management of leasing activities in line with IFC’s applicable E&S requirements being the IFC Exclusion List, and Turkish E&S laws and regulations. The E&S staff has been assigned. The external communication mechanism is in place. For this transaction, Yapi Kredi Leasing will be required to continue applying its existing ESMS to the SME leasing activities, maintain proper internal capacity, conduct E&S training to the relevant staff and provide regular reports including implementation records.

Contacts

For Inquiries About the Project, Contact

YAPI KREDI FINANSAL KIRALAMA A.O.
Serkan Gunal
Director of Treasury
+90 (212) 3399051
Serkan.Gunal@ykleasing.com.tr
Levent Mahallesi, C?mert Sokak No:1A, BESIKTAS / ISTANBUL
www.ykleasing.com.tr

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