Zorlu - Kizildere III GPP Extension

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Project ID 48791

Status Complete

Location

Türkiye

Business Sector

Energy

Notice Type

Private

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Project ID 48791

Status Complete

Location

Türkiye

Business Sector

Energy

Notice Type

Private

Environmental Category

Approval Date

05 Apr 2017

Disclosure date

09 Dec 2016

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Translated version of this PSD: Turkish

Project Description

Provision of a senior loan of up to USD 70 million to Zorlu Dogal Elektrik Uretimi A.S. (Zorlu Dogal) guaranteed by Zorlu Enerji Elektrik Uretimi A.S. (Zorlu Enerji) and Zorlu Holding A.i. (Zorlu Holding).

The transaction is part of an up to USD 270 million financing package to be used for the construction of the 70MW Kizildere III Unit 2 geothermal power plant located in West Anatolia, Turkey.

Project Objectives

Contribution to the development of base load, indigenous energy resources in Turkey that are essential to support macro-economic stability in a sustainable manner as they reduce the country's needs for energy imports.

Transition Impact

The project's transition impact is expected to stem from three factors:

1. the demonstration of new replicable activities through the use and market expansion of innovative technologies including triple-flash turbines and Organic Rankine Cycle, the latter being applicable to many other sectors in the form of waste-heat-recovery systems;

2. the increase in private ownership in the generation sector in Turkey, still dominated by stateowned EUAS;

3. the setting of standards for business conduct with the implementation of GHG emission abatement safeguards to limit carbon emission associated to non-condensable gases dissolved in geothermal resources.

Client Information

ZORLU DOGAL ELEKTRIK URETIMI A.S.

Zorlu Dogal was established in 2008 to build and operate renewable energy assets. It is fully owned by Zorlu Enerji, one of the largest independent power producers in Turkey listed in the ISE and which was the Bank's first client in Turkey. Zorlu Enerji is in turn majority owned by Zorlu Holding, an important Turkish conglomerate with activities in textile, electronics, energy and real estate.

EBRD Finance Summary

USD 70,000,000.00

Total Project Cost

USD 270,000,000.00

The transaction is part of an up to USD 270 million financing package to be co-financed by Akbank, IsBank and TSKB.

Environmental and Social Summary

Categorised A. The Project is the increase of an existing Geothermal Power Plant (GPP) from 100 MWe at the Kizildere III (unit1) to 165 MWe through the construction and operation of Kizildere III GPP (Unit 2), consisting of a new generating unit as well as the associated boreholes, pipelines and transmission lines. Due to the size, location and cumulative impacts from existing units (Kizildere I, II and III), the Project required an Environmental and Social Impact Assessment (ESIA) in accordance to the Bank's Environmental and Social Policy prior to Board consideration. An ESIA disclosure package was disclosed by the Sponsor on 8 December 2016.

The Company acquired the 17.4 MWe Kizildere I GPP in 2008, which has been in operation since 1984 and expanded this in 2013 with the 80 MWe Kizildere II GPP. Kizildere III GPP (unit 1) is a new project in the same field and is currently under construction. Although this is not part of the Bank's
financing, the Bank's due diligence and ESIA disclosure includes cumulative issues associated existing operations of Kizildere I and II as well as the Kizildere III (Unit 1) under construction and the planned expansion through the construction of Kizildere III (Unit 2).

An independent consultant was retained to undertake an Environmental and Social Due Diligence (ESDD) of the Project. The ESDD confirmed that the Project will have no impacts on any protected areas, and is structured to comply with the Bank's Performance Requirements, National and Equator Principle requirements. The project is being subject to a Turkish Environmental Impact Assessment (EIA) process, which is running in parallel to the Bank's disclosure process. A positive conclusion of the Competent Authorities and issue of permits is a condition of financing the Project.

The ESDD has confirmed that the Sponsor has been broadly implementing good international practice at the existing geothermal power plant sites and has had good experience with addressing EHS management and engagement with local civil society. Nevertheless, the ESDD identified additional measures to be implemented as part of good international practice and these have been included in an agreed Environmental and Social Action Plan (ESAP). These include among others additional monitoring and development of additional integrated Environmental, Health and Safety (EHS) management as well as social measures in line with ISO 14001, OHSAS 180001 and SA 8000 that will cover all geothermal power operations of Zorlu Enerji in this area. This will enable EHS and social issues to be managed in a similar manner for all operations and therefore reduce cumulative impacts. As part of the EHS management systems the Company will promote the identification and management to cumulative impacts of geothermal projects with other industries in the area.

The GPP does not involve the combustion of fossil fuels. There are no gaseous emissions from the plant itself. However, geothermal fluids contain non-condensable gases, of which the great majority (98%) is carbon dioxide (CO2). These non-condensable gases (NCG) are emitted from the power plant via the cooling tower and the vaporisers, and this leads to the release of CO2. For the GPP that will be the subject of the Bank's investment, the GHG emissions will be around 0.8 to 0.9 t CO2/MWh. This is estimated to be around 530,000 t CO2 per year depending on intensity if abstraction, which will reduced over time. It should be noted that the initial concentrations of CO2 are high as provided above, however, these reduce significantly over time (degasification process) as demonstrated by the existing Kizildere operations of unit I and II, and confirmed by studies undertaken among others under the EBRD's, efforts to promote early stage geothermal exploration. As part of the due diligence process an assessment has been made of carbon emissions after 5, 10 and 30 years of operations (plant life is circa 50 years). Taking into account mitigation factors and an agreement which removes 110,000 ton CO2 per year through offset, the emissions of carbon from the Kizildere I, II and III project will be reduced from 0.62 t CO2-e per MWh to 0.52 in 2010 and 0.32 in year 30. The Company is investigating methods to further reduce emission of non-condensable gases, such as the use of the Carbfix process. However, given the specific nature of the resources, this may require additional studies once the plant is fully operational.

The emissions to air will also contain trace levels of hydrogen sulphide (H2S - also a noncondensable gas). Whilst the H2S levels within the emissions to air are below regulatory threshold limits, the H2S emissions will need to be monitored to assess possible nuisance impacts.

Experience to date with the Kizildere I and II geothermal power plants within the same area has not been associated with complaints or significant impact. Historic operations of Kizildere I, prior to privatization and acquisition by Zorlu Enerji was however associated with among other issues, surface water contamination. The Company will monitor emissions and discharges from the Project as part of the ESAP implementation, and ensure best industry practices are implemented.

The Company will also work jointly with the Geothermal Association and local stakeholders on undertaking further studies on cumulative impacts associated with geothermal energy generation in this area.

Following ESIA disclosure and the 60-day public review and comment period, all concerns raised will be summarised and responded to for EBRD Board consideration. The ESAP may also be amended if new information or analyses suggest this would improve environmental and social performance of the
project. This Project Summary Document (PSD) will be updated in case of important new information or significant revisions to the ESAP.

The Bank will monitor the Project development and implementation of the ESAP. The Company will report on emission and operations through the implementation of a Stakeholder Engagement Plan (SEP) and Corporate Social Reporting (CSR) in line with GRi standards.

There is an Environmental and Social Impact Assessment available for this project

Update March 2018. The Project has been commissioned in March 2018. The Company is implementing the agreed ESAP to the satisfaction of the Lenders and no issues have been reported or identified. The Bank will undertake additional monitoring in 2018/2019 to review operations.

Technical Cooperation

None.

Company Contact Information

Tamer Soylu
tamer.soylu@zorlu.com
+902124562838
+902124220099
Levent 199, Büyükdere Cad. No:199 Sisli- Istanbul - Turkey

Transition impact

ETI Score:60

PSD last updated

29 Mar 2019

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Project ID 48791

Status Complete

Location

Türkiye

Environmental Category

Disclosure date

07 Dec 2016

Project description

An up to USD 70 million senior loan to Dogal Elektrik Uretimi A.S. (Zorlu Dogal) guaranteed by Zorlu Enerji Elektrik Uretimi A.S. (Zorlu Enerji) and Zorlu Holding A.S. (Zorlu Holding). The transaction is part of an up to USD 270 million financing package to be used for the expansion of Kizildere III thouth the additionl of Unit 2 to make this a 165 MWe geothermal power plant (GPP). The Project is located in West Anatolia, Turkey.

Zorlu Enerji (“Zorlu”) is part of Zorlu Holding, Turkish company with interests in the construction, energy generation, and industrial sectors. The Project will help Zorlu to expand its renewable energy portfolio and allow for the development of renewable energy in Turkey.

The Phase II of the Geothermal Power Plant has been developed in line with Turkish legislation and an Environmental Impact Assessment (EIA) has been completed as part of the local compliance process and is currently pending in final approvals.

There is a Project Summary Document available for this project.

ESIA summary

Non-Technical Summary (NTS): Turkish | English
Stakeholder Engagement Plan (SEP): Turkish | English
Environmental Impact Assessment (EIA) as submitted for Turkish permitting: Turkish | English
Environmental and Social Action Plan (ESAP): Turkish | English

An Updated Addendum summarizing the permitting as of 2017 has been prepared by the Company and can be downloaded in Turkish | English or on the Company web site

Full EIA availability

Full ESIA documentation is available locally at:

Local Authority (hard copy)
Address: Buharkent Belediyesi, Kamil Paşa Mahallesi Atatürk Caddesi No :73 Buharkent / AYDI
Contact Name Ali Esin – Buharkent Belediyesi Halkla İlişkiler Müdürü
Tel and email: 0 256 391 30 05 - buharkentbelediyesi@hotmail.com
Zorlu Head Office
Address Levent 199, Büyükdere Cad. No:199 Şişli - İstanbul - Turkey
Contact Tamer Soylu
Telephone number: 0212 456 2838
Email tamer.soylu@zorlu.com
Zorlu (site )
Address: Karataş Mahallesi Jeotermal Sokak No:102 Sarayköy - Denizli - Turkey
Contact Name: Ali Er, manager
e-mail: ali.er@zorlu.com
Tel: 0 (258) 429 11 00
Internet site: English docs | Turkish docs
EBRD, Resident Office Istanbul ,
Buyukdere Caddesi, 185;
Kanyon Ofis Binasi, Kat: 2; Levent; Istanbul 34394;
Turkey; Email: RO-Istanbul@ebrd.com;

Tel: +90 212 386 1100;
Contact: Erdem Mehmet Yasar ; email: yasrm@ebrd.com

Enquiries

Contact: Tamer Soylu EHS manager,
email: tamer.soylu@zorlu.com
Address Levent 199, Büyükdere Cad. No:199 Şişli - İstanbul - Turkey
Telephone number: 0212 456 2838

This document was prepared at an early stage of project development, before consideration by the EBRD Board of Directors. Details of a project may change following disclosure.

Environmental and Social Impact Assessments and ESIA summaries are produced by project sponsors, and the EBRD makes them available without any comment or implied endorsement. Any views expressed or statements made in the Environmental and Social Impact Assessment or the ESIA Summary do not necessarily reflect the views or opinions of the EBRD.

Last updated 25 June 2014

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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Zorlu - Kizildere III GPP Extension

Project timeline

Translated version of this PSD: Turkish

Project Description

Project Objectives

Transition Impact

Client Information

EBRD Finance Summary

Total Project Cost

Environmental and Social Summary

Technical Cooperation

Company Contact Information

Transition impact

PSD last updated

Business opportunities

General enquiries

Public Information Policy (PIP)

Project description

ESIA summary

Full EIA availability

Enquiries