Turkish energy firm Zorlu Enerji has secured its largest syndicated financing to date, in the form of a US$500mn term loan arranged via 14 regional and international banks.

The facility was arranged by bookrunner and mandated lead arranger Standard Bank. The bank was the sole underwriter of 50% of the facility, as well as the documentation and facility agent. HSBC also joined the facility as the mandated lead arranger.

The deal is guaranteed by Zorlu Holding, and will be used to finance general corporate purposes. It pays a margin of 2.90% per year, and will be repaid in seven equal semi-annual instalments starting 24 months after drawdown.

David Locking, director - power and infrastructure, at Standard Bank comments: "This transaction is an exceptional achievement in the current market conditions and one that reflects both the quality of this leading Turkish group, and the regard held for the borrower's achievements, strategic positioning and geographic diversification in the power sector.”

Zorlu Enerji was set up in 1993 to construct and operate combined heat and power plants for the generation of electricity and steam mainly for the Zorlu Group.

The firm presently operates six gas-fired power plants in Turkey, with a combined capacity of 420MW of electricity.

The company has also been expanding beyond Turkey, developing power plants in Israel, Pakistan and Russia. These markets are being targeted due to their similarities to the Turkish market, in that demand for electricity is growing above the global average, and there is increased likelihood of supply shortages developing in the next few years.

In all these markets, the power sector tends to be state-owned, but private investment will be required to develop additional capacity. Deregulation of the industry is also expected in the near future.

The syndicate of banks on the US$500mn facility includes Credit Europe Bank, Natixis and Garanti Bankasi (Luxembourg branch) as co-arrangers. Senior managers are Denizbank (Bahrain branch), KfW IPEX-Bank, and Vakifbank Group.

Joining as lead managers are Demir-Halk Bank, JPMorgan Chase Bank, De Indonesische Overzeese Bank and Société Générale.