EARTHQUAKE RECONSTRUCTION FRAMEWORK LOAN

Promoter – Financial Intermediary

ILLER BANKASI AS

Location

• Turkiye

Description

The project is designed as a framework loan for the provinces affected by the earthquakes in south-eastern Türkiye in February 2023. The project concerns rehabilitation, construction and extension of drinking water, sewerage and stormwater networks as well as drinking water, wastewater treatment plants, purchase and installation of water utilities' smart systems, machinery and equipment.

Additionality and Impact

The project concerns rehabilitation, construction or extension of drinking water, sewerage and stormwater networks as well as drinking water and wastewater treatment plants and purchase and installation of water utilities' smart systems, machinery and equipment in the provinces affected by the earthquakes of 6th February 2023 in south eastern Türkiye. The project forms part of the Team Europe's response to the earthquakes which was announced during the Donors' Conference organized by the European Commission (EC) and Swedish Presidency of the Council on 20 March 2023. The project is also aligned with the EU's development priorities, which are included in the NDICI objectives and will provide an opportunity to build back better and to support the region's modernization of its infrastructure.  

The EIB financing addresses market failures concerning public goods provision and environmental/ climate externalities, as well as access to finance. The project will contribute 100% to Climate Action and Environmental Sustainability and to several Sustainable Development Goals.

The reconstruction and recovery activity will provide an opportunity to support basic municipal infrastructure with the aim of restoring normal living conditions for 3.3 m internally displaced people and over 1.7 m already existing Syrian refugees in the affected areas. In the overall affected region counting over 15 m inhabitants, the project will benefit c. 6 m people (hosting population and internally displaced).

The project will create over 200 permanent jobs during operation and more than 2 000 person-years during construction.

The Bank's presence ensures compliance with EU policies and international standards, offering valuable technical advice to the Promoter. Furthermore, a dedicated Technical Assistance (TA) funded by the EU grants will be provided for preparation and implementation of the project. In order to start the project preparation quickly, TA funds will also be made available from the EIB loan.

The favourable terms of the Bank's loan, particularly its long term character, size and cost are important elements supporting the project, especially in view of the vast financing needs in the aftermath of the earthquakes.

Objectives

The project is expected to bring substantial public health and environmental benefits from reconstruction and improve access to safe and resilient water, reduced greenhouse gas (GHG) emissions from wastewater services and a more rational use and protection of local water sources from reduction on non-revenue water. By supporting basic municipal infrastructure, the project will restore normal living conditions and economic recovery both for internally displaced, remaining and hosting populations in the affected areas.

Comments

The project would form a part of the Team Europe's response to the earthquakes in Türkiye.

Sector(s)

• Water, sewerage - Water supply; sewerage, waste management and remediation activities

Under Global Europe NDICI guarantee

Under EFSD+ Guarantee

Proposed EIB finance (Approximate amount)

EUR 400 million

Total cost (Approximate amount)

EUR 1550 million

Environmental aspects

The schemes are expected to have minor negative impacts during construction and minor residual impacts during the operational phase. Most schemes will be located in urban environments, on the existing main routes of water mains and sewers and/or within the perimeter of existing facilities. According to the information received from the Promoter, project schemes are not likely to have negative impacts on nature conservation areas. Nevertheless, compliance with the National Biodiversity and Habitats Legislation and its alignment with the EU Habitats and Birds Directives (92/43/EEC, 2009/147/EC) and EIB Environmental and Social Standards will be further checked during assessment of individual schemes, before allocation. It is expected overall that the operation will have positive impacts, specially from pollution prevention in water bodies through improved or new wastewater treatment plants, savings in water through improvement in efficiency of the new and rehabilitated networks and GHG savings also through WWTPs. The project is considered Paris Aligned and compliant with the EIB Climate Road Map.

Procurement

The Bank will require the Promoter to ensure that implementation of the project will be done in accordance with the Bank's Guide to Procurement.

Status

Signed - 15/11/2023