Financing Renewables in Turkey

Transcription

1 Financing Renewables in Turkey Symposium of the Deutsch Türkischen Industrie- und Handelskammer Florian Mahiny Head of Austrian/ German International Desk Yapı ve Kredi Bankası A.Ş. Istanbul, 22. February 2011

2 Agenda Introducing Yapi Kredi Banking in Turkey, a few snapshots Summary of financing possibilities in Turkey Trade Finance Essentials for Energy Projects Leasing for Renewable Energy Financing A look to SOLAR in specific Contact Information Annex 1-5

3 Introducing Yapi Kredi and the major shareholders Koç Group and UniCredit Group Yapı Kredi at a glance L L Leading industrial & services group, active in energy, auto, consumer durables and finance Sales ~9% of Turkey s GDP and exports ~11% of Turkey s exports* 50% 81.8% 50% Leading Italian financial institution (6th largest Eurozone bank by assets) Operations in 22 countries Rated Aa3/A/A (M/S&P/F) L 18.2%** Minority Shareholders 94% 5 99% 100% 100% 6 100% 3 100% 2 100% L L 100% 4 100% 1 Percentages indicate Yapı Kredi s total direct and indirect shareholding L Listed * Source: Turkish Institute of Statistics, CBRT and Koç Holding Financials ** The Bank s shares are listed on the Istanbul Stock Exchange and Global Depository Receiptsthat represent the Bank s shares are quoted on the London Stock exchange 3 1. ) 87.3% YKY,12.7% Yapı Kredi 2. ) 67.24% Yapı Kredi, YK Holding BV 32.76% 3. ) 99.84% Yapı Kredi, 0.16% YKL 4.) 99.93%YKS, 0.04% YKF, 0.04% YKY 5.) 74.01% Yapı Kredi, 7.95% YKF, 11.99% YKY 6.) 99.8% Yapı Kredi, 0.1% YKL, 0.1% YKY

4 Banking in Turkey, a few snapshots 4 Import / Export regulation TL capital injection and TL borrowing Limits to FX financing Payment systems and current accounts Fund transfer in FX received from abroad can be freely utilized, unless related to (i.) import/export (or services provided to/from abroad), (ii.) financing or (iii.) capital injection In any of the cases above the Turkish company must convert in TL at least 70% of the related amount within 6 months The controlled Turkish company must prove within 12 months the utilization of the amount injected Turkish companies can freely borrow in TL However Turkish banks traditionally reluctant to finance foreign recently incorporated companies FX financing is allowed only to exporters: the company has to prove within 18 months the existence of exports for an amount at least equal to the amount credit granted FX indexed TL financing must be immediately converted in TL FX financing granted from abroad must have maturity below 1 year otherwise are subject to a 3% tax (also in case of anticipated redemption) TL is freely convertible but used only on Turkey Payments systems are similar to the one used in Europe Foreign companies can open without limitations a current account in TL or FX in Turkey after the obtainment of the Turkish tax code No restrictions for a Turkish company to open a current account abroad

5 Summary of financing possibilites in Turkey Working capital Short term loans (FX) ST loans (FX indexed) Investment loan TYPES PURPOSES CONDITIONS TAX ISSUES Overdraft Daily transaction na na Custom/tax payments Legal payments (KKDF) Legal payments Max. maturity is 7 days na Customs Max. maturity is 30 das na Blocked cheques Customs Max. maturity is 7 days na YTL loans Working capital na 5% on interest Export loan Export finance Exporters max. maturity: 18 months Eximbank loan Import finance Export specific documentation Exchange rate increase (FX vs. YTL) Exchange rate decrease (FX vs. YTL) Investment loan in Turkey Investment loan in Bahrain na na Long term investment finance Long term investment finance No necessity for being exporter No necessity for being exporter Investment incentive certificate exists Investment incentive certificate does not exist No tax No tax 5% on interest 5% on currency among TL & FX 5% on interest na na Loans in foreign currency: Allowed in Turkey for exporters for export purposes Not allowed in Turkey for non exporters for working capital purposes Allowed from abroad (or YKB through Bahrain branch) for maturity longer than 1 year and 1 week Financing in FX from Turkish banks or from abroad < 1 year and 1 week are taxed at 3% on single utilization FX indexed loans are always allowed: The lender grants a line in FX to be utilized in TL At maturity the repayment will be in FX or the eequivalent in TL Advantages: lower interest rates based upon Libor/ Euribor Disadvantages: exposure to FX risk Indicated for companies, which have revenues indexed to the same currency of borrowing 5

6 Trade finance: YKB enjoys 15% market share in trade finance thanks to international nature Products Basic cross border transfers Comments YKB effects almost all payments via the SWIFT network Collection against documents Documents against payment (d/p) Documents against acceptance (d/a) Bank guarantee Letter of credit = l/c OTHER TYPE OF L/cs Stand by L/Cs Back to Back L/Cs (for the traders) Transferable L/Cs (for the traders) Forfaiting Export manager Forfaiting export and import transactions by the help of group synergy and correspondent bank network. Ready to be launched Post financing credit For the utilization of importers Structured investment loans Buyer s Credit Supplier s Credit (with the synergy of the group banks) 6

7 Essentials for Energy Projects - I Structuring Issues: Full recourse during investment period (not in case of EPC contract) Debt sizing according to net cash flow of the project Pledge on 100% shares of the Borrower All project accounts Enterprise pledge (will be completed after operation) Assignment of Receivables arising from project revenues, including electricity sales All rights under project documents incl. construction and equipment contract Subordination of shareholder loans and any other affiliate s indebtedness Negative pledge, restrictions on investments, borrowing, share transfer / sale Equity Contribution to be paid in upfront/ deposited and paid in pro rata basis with the loan Cost overrun, commissions and fees to be paid by Equity DSCR covenant for cash sweep and dividend payment/distribution Repayment grace until project operation date + 6months Amortised principal repayments

8 Essentials for Energy Projects - II Conditions Precedent Completion of all due diligences (technical, legal, environmental, market etc) especially Technical Report confirming energy production Completion and verification of all necessary permits including the License Investment Plan confirmed by Technical Consultant Construction contract reviewed and confirmed by Technical Consultant / Lender Lump-sum, fixed price and turn-key EPC agreement is preferable Necessary equity contribution completed Execution of Facility Documentation including security agreements All Project accounts opened with Lender All possible securities perfected; share pledge, account pledge No event of default outstanding All possible insurances are in place

9 Essentials for Energy Projects - III Documents to be submitted for evaluation Ownership structure of SPV, info regarding sponsors Project agreements Feasibility Report presented to DSĐ Final Project /Feasibility Report Water Usage Agreement (DSĐ) (in case of Hydro) System Connection Documents (TEĐAŞ) EIA (ÇED) Report EMRA Production License and all amendments Turbine Supply Agreement Construction Agreement Investment Plan Expropriation status Company Information (other licenses, other energy projects,possible guarantors etc)

10 Leasing for Renewable Energy Financing Cash Flow Based Lease Financing is for: On-Shore Wind Energy Targeted sector in Yapi Kredi Leasing, most suitable for Leasing Photovoltaic Challenges from feed-in tariff in Turkey Geothermal after Completion of Drilling Phase Financing Volume for Cash Flow based structures at least: Structuring Parameters Project Cash Flow as Main Parameter Standard Down payment of 20% (in some cases min. 10%) Residual Value max. 20% Maturity Years DSCR Requirement by technology (Debt Service Cover Ratio) 1,10x for PV 1,30x for Hydro 1,40x for Wind / Geothermal projects (Using P50) Duration of guaranteed cash-flow as reference, usually with time reserve of 15%

11 A look to SOLAR in specific The law does not differentiate between PV and Thermal One might decide to sell produced energy for a guarantied or a floating market price Guaranties feed in tariff for Solar USD 0,133/ kwh* The current market price is between USD 0,06 to USD 0,09 While the long term forecast expects USD 0,12 German rate is around USD 0,45/kWh *Guaranteed buy rates for a period of 10 years from the renewable energy plants which has become operational after or will start operations until For the plants which become operational after , the Council of Ministers will be authorized to determine the rates.

12 Contact Information Mr. Florian Mahiny Head of Austrian/ German Desk Ms. Esra Omuzluoğlu German, Austrian and CEE Customers Phone +90/ 212/ Phone +90/ 212/ Ms. Arzu Özgiray Head of Project Finance Phone +90/ 212/ Ms. Nihan Tarmur Head of Structured Trade & Export Finance Phone +90 (212) Ms. Burcu Sirin YapiKredi Leasing Phone +90/ 212/

13 The Group is present in 22 Countries throughout Europe Employees: ~180,000 Customers: ~ 40 million Branches: ~ 10,200 Banking operations in 22 countries International network in ~50 countries UniCredit Group Focus Areas: Italy (rank # 2) Germany (rank # 3) Austria (rank # 1) CEE (rank # 1) 1 In CEE, UniCredit is the first banking player in CEE in terms of revenues: it s the largest bank in Poland, Croatia, Bosnia-H. and Bulgaria it s among the top5 in Ukraine, Turkey, Czech Republic and Kazakhstan 13 it s among the top10 in Romania, Baltics, Russia, Slovenia, Hungary and Serbia

14 Yapi Kredi Project and Structured Finance Group Our Profile and Strengths Yapi Kredi Project Finance Profile Core Strenghts Yapi Kredi has a strong track record of project finance and a reputation as one of the leading banks of long term financing in Turkey. Yapi Kredi s Project Finance Team focuses on energy, real estate, transportation and acquisition finance transactions and has a deep understanding of market dynamics and relevant legislations - A total size of US$ 3.6 billion exposure over 130 projects. Yapi Kredi is one of the leading financiers of electricity generation projects and has a long track record in Turkey s energy sector starting even before the liberalization of the markets and the Renewable Energy Law over US$ 2.8 billion underwriting in 100 Projects. Proven MLA capabilities, participant and structuring bank for a large number of transactions in Turkey. Sector specific expertise, product excellence and local market knowledge As a local institution, Yapi Kredi is more experienced in assessing market and corporate risk in Turkey, in particular in the context of energy projects without off-take agreements and limited recourse transactions. Yapi Kredi Bank values the importance of core relationships with its clients by maintaining a long term partnership and commitment to the industries throughout the cycles. 14

15 Yapi Kredi Project and Structured Finance Group Current Project Finance Portfolio USD 3.6 billion exposure, consisting of 130 projects (energy, acquisition, infrastructure, real estate). Acquisition 24% Other 9% # of projects Underwriting (MUS) Exposure (MUS) Energy Infrastructure Real Estate Acquisition Other Total Real Estate 4% Infrastructure 9% Energy 54% 15

16 Yapi Kredi Project and Structured Finance Group Special Focus On Energy Sector Energy supply is an important basis for economic growth Huge investment in power generation, transmission and distribution necessary to expand current capacity levels Leading player in Electricity Production Projects Major player in energy Long track record in Energy Sector starting even before liberalization of the markets and the Renewable Energy Law Approximately BUSD 2.8 commitment Total financed installed capacity approximately 5,300 MW Approximately 90 HEPP & other Renewable Projects and 6 Thermal Power Pioneer financier in Distribution Projects- Natural gas distribution in areas Eskişehir, Bandırma, Düzce-Ereğli, Balıkesir and Kayseri - MUS 145 total size for five projects, MUSD 80 financed by YKB Electricity Distribution -Aydem (MUSD 110 project size, MUS 16 including non-cash by YKB) -BEDAS (BUSD 1.2 project size, MUS 120 financed by YKB) 16

17 Yapi Kredi Leasing Information Biggest leasing company in Turkey by : Asset size Equity New business volume Renewable energy business 9 branches all over Turkey Competence centers in aviation & renewable energy Knowhow in corporate & commercial & SME customers Vendor department & partnerships with small & medium & big vendors