The sponsor of the project is Mr. Ihsan Arslan, who founded the company in 1990 and currently owns 96.5% of the company. The remaining 3.5% shareholding is held by other family members.

Total financial requirements are estimated at $42.5 million. The proposed IFC corporate loan consists of senior debt of up to $22 million for IFC’s own account. Financing a portion of the total investment as a C loan is also a possibility. The remaining financing needs will be funded through the company's internal cash generation.

25.0 million (USD)

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

* These investment figures are indicative

The company is headquartered in Merter, Turkey and has operations across four facilities in Turkey and one in Jordan. The project would also include the establishment of a greenfield seamless wear facility in Egypt. The project will principally be undertaken in the company’s four facilities in Turkey, namely Corlu, Usak, Ikitelli and Kirac.

The project will have the following positive developmental impacts: South-South Expansion: The project will allow Atateks to set up operations in Egypt, which is in line with IFC’s south-south strategy and the sector strategy of expanding textile manufacturing capacities in cost competitive environments. Expanding into Egypt will reduce the company’s manufacturing costs as well as help Atateks improve its overall competitiveness and become a leading regional exporter. Employment: The Project will create about 400 new jobs, and help ensure the sustainability of 1,800 existing jobs in Turkey and Jordan thus benefiting the local economies of three countries. - Transfer of Technology and Know-How: The project will necessitate the training of the company’s Egyptian workforce in some of the latest state-of-the-art textile technology. Establishing a Positive Example of Good Labor Practices: The project will establish a good practice example of sound, externally audited labor practices in Egypt.

- Environmental, Labor, and Social Advice: IFC’s involvement will help strengthen the company’s implementation of environmental and social best practices, especially in the area of labor management, where the company has faced challenges in terms of its Jordanian operation in the past. During the pre-appraisal, the client expressed a strong interest in working with IFC and its jointly sponsored program with the ILO, USAID and others known as “Better Work Jordan” which can help further reinforce the company’s now leading labor practices and solidify its market access to socially responsible brands and customers in Europe and the United States. IFC’s advice on best practice environmental, social and labor management systems will also be beneficial to the company for its greenfield project in Egypt. - Country and Sector Knowledge: Discussions between IFC and Atateks have helped the company validate their expansion plan into Egypt. The company has been especially interested in working with IFC given its global knowledge and sector expertise and hopes to build a long-term relationship where IFC can provide advice on the company’s strategy, especially outside of Turkey. Atateks has welcomed IFC’s review and its industry specialist’s suggestions to strengthen market access and improve existing operations. Long-Term Partner: IFC will be providing Atateks with long-term financing of up to eight years. The company is looking to partner with IFC for its ability to provide both long tenor debt and the value-added services detailed above.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.

Key environmental, health and safety, human resources and social issues in a project in this industry sector include the following:

- Management capacity to manage environmental, health and safety, human resources and social risks and issues;
- Assessment and integrated management systems to ensure environmental, health and safety, human resources and social performance;
- Terms of employment and working conditions for local and migrant workers;
- Occupational Health and Safety;
- Effluent management;
- Monitoring and control of air emissions;
- Solid and hazardous waste management and disposal;
- Hazardous material management; and- Management of outsourcing activities.

While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards:

- PS1: Social and Environmental Assessment and Management System;
- PS2: Labor and Working Conditions;
- PS3: Pollution Prevention and Abatement; and
- PS4: Community Health Safety and Security.

Issues relating to PS5: Land Acquisition and Involuntary Resettlement have not been identified and are not expected. For the project in Egypt the site will be constructed on a Free Trade Zone and the company will ensure the ESIA covers the aspects covered in PS5. For existing facilities, all plants are located in industrial or urban areas.

Issues relating to PS6: Biodiversity Conservation and Sustainable Natural Resource Management; PS7: Indigenous Peoples and PS8: Cultural Heritage have not been identified at present. However these aspects will be assessed for the project in Egypt in order to determine applicability.