50923 - Templeton Turkey Fund II SCSp

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Summary of Investment Information

Project Number

50923

Company Name

Templeton Turkey Fund II L.P

Date SPI Disclosed

May 8, 2025

Country

Turkiye

Region

Central Asia and Turkiye

Projected Board Date

Jun 20, 2025

Environmental Category

FI-2 - Limited

Status

Pending Disbursement

Last Updated Date

Mar 4, 2026

Department

Equity Portfolio Management

Industry

Funds

Previous Events

Approved : Jun 18, 2025
Signed : Feb 27, 2026

Sector

Growth Equity Fund

Project Description

The proposed transaction is an equity investment of up to US$ 25 million to Templeton Turkey Fund II SCSp. (“Templeton Turkey II” or the “Fund”), a closed-end private equity fund targeting small and mid-market companies in Türkiye. The Fund will be domiciled in Luxembourg.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	25.0

Development Impact

The Fund is expected to increase access to private equity (PE) capital and value-creation for small to mid-market companies in Türkiye. The persistent devaluation of the Turkish Lira against the US Dollar over the past decade has led to a decline in private equity investments in the country. Templeton Turkey II will provide equity financing and create value to portfolio companies through business development, operational improvement, fundraising, and M&A efforts, also leveraging the parent company's network and expertise. A meaningful share will also be invested in women owned or led businesses. Beyond the project, IFC expects that the successful raising of this fund will help signal market recovery and encourage the re-engagement of fund managers and institutional investors in the country.

IFC’s support through own account equity will help the fund to achieve first close. Fundraising activities in Türkiye have steadily declined in recent years due to macroeconomic challenges, political uncertainties, and persistent high-risk perception among investors. IFC’s support as an anchor investor will be critical to mobilize capital from other institutional investors and reach fund target size. IFC’s non-financial additionality includes helping the Fund Manager implement an ESMS per IFC standards and building E&S capacity through IFC's training programs and an internal training plan.

Indicator	Metrics	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
Investees with SME Classification at time of Acquisition (%)	SME Investees (%) [Calculated]	Not Available	Not Available	Not Available
Investees in IDA Countries (%)	Investees in IDA Countries (%) [Calculated]	Not Available	Not Available	Not Available
Corporate Governance: Investees where Fund Manager has Board Seat (%)	Investee Boards with Fund Manager (%) [Calculated]	Not Available	Not Available	Not Available

E&S Category Rationale / Risks and Mitigation

The Fund will target investments across a range of sectors, including healthcare, consumer goods, industrial manufacturing, software, and digital services in Turkiye. The key E&S risks and impacts of the Project derive from the E&S risks associated with the Fund's investment activities and its E&S capacity and systems in place to manage these risks. These risks typically include labor and working conditions, occupational health and safety, waste management, and community impacts, among others. These risks are considered limited and readily addressed through mitigation measures. The overall Fund portfolio risk is considered medium. Thus, the Project has been categorized as FI-2 according to the IFC’s Environmental and Social Sustainability Policy.

The Fund will not invest in any coal-related activities and/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, (d) risk of retrenchment or (e) significant occupational health and safety risks. IFC's applicable E&S requirements for this Project are the IFC Exclusion List, host country laws and regulations, and the IFC Performance Standards. In addition, the Fund Manager will adhere to the requirements of Labor and Working Conditions of IFC’s Performance Standard 2. The Fund Manager will also enhance its grievance mechanism for employees and anti-harassment policies in line with Performance Standard 2.

Templeton Turkiye Fund II has developed a draft ESG Risk Management Framework that is applied across the investment cycle. The framework includes screening against the IFC’s Exclusion List, inherent E&S risk ratings at the initial review stage, ESG screening checklists, and ESG due diligence conducted with third-party advisors. Monitoring tools include quarterly management reports, annual ESG reporting, and incident reporting procedures. The Fund Manager is required to enhance the framework and develop detailed procedures for due diligence and monitoring of the investments, including procedures for assessment of the investments against IFC applicable requirements, and exclusion of Category of A and higher risk projects. In addition, the Fund Manager is required to develop an External Communication Mechanism.

S.no	Title	Anticipated Completion Date	Status
1	ESMS enhanced	02/27/2026	Completed
2	Capacity building on E&S risk management for Templeton Turkiye team	06/30/2025	Completed
3	HR policies and procedures strengthened	02/27/2026	Completed

Contacts

For Inquiries About the Project, Contact

Franklin Templeton Danismanlik Hizmetleri A.S.
Erman Kalkandelen
CEO
+90 212 319 3303

Franklin Templeton Danismanlik Hizmetleri A.SFerko SignatureBüyükdere CaddesiNo: 175 Levent34398 ISTANBUL TURKEY
https://www.franklintempleton.com/

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