On March 4, 2022, The Multilateral Investment Guarantee Agency (“MIGA”) a member of the World Bank Group, issued guarantees to Uludag Power Networks UK Limited (Holdco), a holding company of Actis Long Life Infrastructure Fund LP (ALLIF) covering its equity investments of US$115 million to fully acquire Uludağ Elektrik Dağıtım A.Ş. (UEDAS) and Limak Uludağ Elektrik Perakende Satış A.Ş. (UEPSAS), that operate regulated distribution and retail businesses, respectively in Balıkesir, Bursa, Çanakkale, and Yalova provinces of Turkey (the Distribution Region) and shareholder loan of US$135 million to Uluğ Enerji Dağıtım ve Perakende Satış Hizmetleri A.Ş. (Ulug Enerji), the regional holding company that owns both UEDAS and UEPSAS (the Project). The equity and shareholder loan investments will be covered by MIGA for up to 17 years and 7 years respectively, against the risks of Expropriation, War and Civil Disturbance, and Non-Enforcement of Arbitral Award Rendered pursuant to the Bilateral Investment Treaty (Non-Enforcement of BIT) between Turkey and the United Kingdom.
UEDAS and UEPSAS distribute and supply electricity to over 3 million customers in a geographical area of circa 35,500 km2, located in the southern Marmara region, one of the locomotive economic regions of Turkey. More than 11 TWh of energy was distributed in the Region in 2020 through a distribution network that is operated by UEDAS comprised of medium voltage and low voltage cables and overhead lines totaling circa 51,000 km, approximately 26,000 transformers with a total installed capacity of around 9,700 MVA, substations, poles, offices, buildings and other equipment.
The Project is intended to support ALLIF’s acquisition and operations of the distribution and retail company in the Distribution Region. ALLIF’s planned investment will support deleveraging the Project to deliver a more sustainable capital structure, and its CAPEX program is expected to strengthen the quality of the electricity supply and its overall reliability to better accommodate the projected increase in customer demand. Furthermore, the Project demonstrates to the sector and the broader economy the benefits of mobilizing foreign private sector investment. ALLIF also intends to implement world-class governance and ESG practices at the Project. The Project is aligned with the World Bank Group’s (WBG) Country Partnership Framework (CPF) FY18- FY21 for Turkey.