WestLB has closed documentation for a US$88.5mn limited recourse financing for the first private and largest geothermal power plant in Turkey. The borrower is Gurmat Elektrik Uretim and the plant will be built near the city of Izmir in Turkey.
WestLB was the sole mandated lead arranger and bookrunner, and the deal was arranged by the bank's London energy team. It is one of the first foreign banks to finance a renewable energy project in Turkey.
The facility was oversubscribed, with Turkish banks Vakifbank, Isbank, Tekfen and TSKB committing a total of US$132.5mn.
Gurmat Elektrik Uretim is Turkey's ninth largest EPC contractor and it is expected to be the first power plant to benefit from the country’s new Renewable Energy Law, which guarantees a tariff of 5.0 to 5.5 Euro cents per KWh as well as priority dispatch.
"The approval of the Turkish renewable energy law follows the example of the leading renewable energy countries in Europe, like Germany and Spain. This law will help develop the power sector in the country and encourage local and international banks to support investments in the power sector,” explains Susana Vivares, executive director, WestLB’s global energy group.
The project sponsor is Guris Insaat ve Muhendislik and Guris Holding, one of the largest construction groups in Turkey. The group is providing a completion guarantee for the project.
The senior secured commercial facility will be used to finance the construction and start-up costs. It has a one-year grace period during construction, followed by 10 years of straight line amortisation with an average life of less than six years.
WestLB is continuing to focus on the Turkish renewable energy market, and it expected to be launching another large renewable deal into syndication soon.
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