By Olga Rosca
As the first project under its new Vital Infrastructure Support Programme, the European Bank for Reconstruction and Development (EBRD) is providing new financing worth US$125 million to Turkey’s largest utilities, Enerjisa Enerji, as the company is safeguarding electricity supply for 21 million people amid the coronavirus pandemic.
Anticipating the adverse impact of the Covid-19 outbreak on its operations and investment programme, Enerjisa, which also servers Turkey’s largest cities Istanbul and Ankara, has proactively requested new funds to avoid disruptions.
Similarly to other electricity distribution and supply companies, the utility is expected to be affected by the fall in demand due to lower industrial and commercial activity in the country and a drop in collection rates. EBRD funds will support the implementation of the company’s investment plans during the period of uncertainty.
EBRD Managing Director for Sustainable Infrastructure, Nandita Parshad said: “This pandemic puts pressure on every part of the economy and society. As a show of support to our strong partner, we have secured sufficient liquidity to ensure Enerjisa’s operations and investment plans continue uninterrupted.”
Enerjisa Enerji’s Chief Financial Officer, Dr. Michael Moser added: “We are very happy with the good relationship our company has with the EBRD. We are aware of the important role the EBRD is playing during the Covid-19 pandemic across the world and highly appreciate its efforts. We are also proud of our swift decision to implement measures early on to protect our business, and doing so at a time when the global crisis has just started to unfold. Securing the energy supply at all times is of utmost importance, not only for the Turkish economy but also for the wellbeing of the population. This is particularly true in the times of Covid-19. Therefore, our top priority is to ensure the continuity of our power distribution operations and investments.”
The new funds follow a US$100 million loan extended by the EBRD to Enerjisa last December and are denominated in the Turkish lira to avoid currency mismatch. The loan is linked to the new Turkish Lira Overnight Reference Rate (TLREF) benchmark, which is expected to become the reference rate for corporate lending in Turkey.
In the wake of the coronavirus pandemic, the EBRD has launched a support programme for infrastructure providers. It is part of the Bank’s overall Solidarity Package which also includes short-term liquidity, working capital and restructuring of exposure for existing clients, as well as trade finance. The EBRD stands ready to provide support worth €21 billion over the 2020-21 period across 38 countries.