Call us on
+44 (0) 207 045 0920

Middle East

CASE STUDY: IC Construction Group Lays Groundwork for IPO with Project Finance Facility

IC İçtaş Enerji Yatırım Holding A.Ş. was able to utilise its close relationship with banks to rapidly close one of Turkey’s largest project finance loans of the year. The size of the project and the acquisition of two new HEPPs from the privatisation authority also managed to attract a larger group of lenders to the transaction.

Mar 8, 2017 // 1:51PM

Deal At A Glance

Deal Type: Project Finance Term Loan

Borrower: IC İçtaş Enerji Yatırım Holding A.Ş.

Sponsor: IC İçtaş İnşaat Group

Governing Law: UK Law

Mandated Lead Arrangers: Ak Bank, Garanti Bank, Is Bank, Vakifbank, Yapi Kredi, Ziraat Bank

Technical Adviser: Enerji Merkezi

Legal Adviser to Borrower: Muharrem Küçük

Legal Advisers to Lenders: Çakmak- Gökçe Avukatlık Bürosu, White & Case

Size: US$720mn

Pricing date: July 2016

Tenor: 14 years

Use of Proceeds: Refinancing of existing HEPP portfolio due in June 2030 and acquisition of Kadıncık HEPPs


The sponsor wanted to combine all of its hydro assets under one SPV, as well as acquire 2 additional hydro assets with a total installed capacity of 144MW.

This would enable the borrower to significantly expand its portfolio and footprint in the hydropower sector.

The overall deal involves 10 mid-to-large sized HEPPs in various parts of Turkey. The multi-tranche loan assisted in the acquisition of the two additional projects from the privatisation authority (PA).

The entire portfolio has an installed capacity of 400MW, and is one of the largest deals in Turkey for the year.

Transaction Breakdown

The deal was originated as quickly as possible in order for the sponsor to be able to acquire the assets within the due date set by the PA.

Additionally, the existing assets were combined under one SPV, and their existing project finance facilities were refinanced in order for the sponsor to ease its operational activities and provide it with enough time to get ready for an IPO in the mid-term.

The deal was structured under standard project financing terms, where the financing is based on a limited recourse structure. The transaction’s size and the tenor are in the market range within the Turkish project finance space.

The deal was extremely important for the sponsor because the combination of assets had allowed the SPV and the sponsor to diversify its production facilities into various parts of Turkey, which helped mitigate the fluctuation risk in production. In addition, the projects received a further benefit from the combined cash flow that would ease the debt service substantially.

The existing hydropower assets were financed by three existing lenders (Garanti Bank, VakifBank and Yapi Kredi Bank).

The bookbuilding strategy was centred on the Group’s relationship banks, where the timing of financial close was vital. The strong relationship between the banks and the borrower allowed it to execute the deal rapidly.

However, the overall size of the deal and the acquisition of the new hydropower plants required the addition of three new lenders (İş Bank, Ziraat Bank and AK Bank), which the sponsor was able to successfully attract while staying competitive on pricing.

Middle East Projects & Infrastructure CEE & Turkey CEEMEA

Bonds & Loans is a trusted provider of news, analysis, and commentary that helps illuminate the most significant issues, events and trends impacting the global emerging credit markets.

Recommended Stories