WASHINGTON, March 27, 2012 - The World Bank’s Board of Executive Directors today approved a Third Environmental Sustainability and Energy Sector Development Policy Loan (ESES DPL 3) for Turkey in the amount of Euro 455.4 million (US$600 million equivalent).
The ESES DPL3 is the third operation in a series of three following the Programmatic Electricity Development Policy Loan (PEDPL1) in 2009 in the amount of Euro 548.4 million (US$800 million equivalent) and the Second Environmental Sustainability and Energy Sector Development Policy Loan (ESES DPL2) in 2010 in the amount of Euro 519.6 million (US$700 million equivalent).
Grounded in the development goals articulated in Turkey’s Ninth Development Plan, the ESES DPL3 aims to help: (a) enhance energy security by promoting private sector clean technology investments and operations; (b) integrate principles of environmental sustainability, including climate change considerations, in key sectoral policies and programs; and (c) improve the effectiveness and efficiency of environmental management processes.
“Turkey’s ambitious energy sector program is geared to meet the country’s growing energy demand in an efficient and sustainable manner,” said Martin Raiser, World Bank Country Director for Turkey. “In addition Turkey is stepping up its international and domestic engagement on environmental management and climate action. The World Bank Group is proud to be Turkey’s partner in designing and implementing a program that will support growth and job creation, protect the environment, improve the quality of life for Turkey’s citizens, and make a contribution to the global challenge of containing emissions.”
Policies, strategies, and reform actions supported under the ESES DPL program include:
- The adoption by the High Planning Council in early 2008 and quarterly implementation of a cost-based energy pricing mechanism;
- Electricity Market and Security of Supply Strategy (2009), Clean Air Action Plan (2010), National Climate Change Strategy (2010) and Action Plan (2011), and Energy Efficiency Strategy (2012);
- Electricity distribution privatization, 2008-2013;
- Strategy for generation privatization, for implementation from 2012;
- Hourly metering and settlement (2009) and a new Day-Ahead Market platform for the wholesale electricity market (launched on December 1, 2011);
- Amendment of the Renewable Energy Law, December 2010, for (a) technology-based feed-in tariffs; and (b) firm off-take arrangements (launched in December 2011 as a complement to the new Day-Ahead Market platform);
- Regulation on Permits and Licenses to be taken in Accordance with the Environmental Law and amendments to said regulation, which inter alia combine all environmental licenses and permits required for an industrial installation into a single “e-permit”;
- Regulation on Control of Soil Pollution and Contaminated Sites;
- Transposition into Turkish environmental regulation of EU directives on environmental impact assessment, landfills, and large combustion plant; the environment; and
- New Electricity Market Law (draft disclosed in February 2012) and an amendment to the Gas Market Law (under preparation), for approval by 2013.
The ESES DPL3 is an IBRD Flexible Loan with an interest rate equal to 6 months LIBOR term plus a variable spread, with a final maturity of 15.5 years, including an eight year grace period.