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Case Study: $70m EBRD financing for Kizildere III geothermal plant expansion, Turkey

In a case study published on its website, EBRD shares details of its $70 million loan as part of the project financing for the expansion of the Kizildere III geothermal power plant by Zorlu Energy in West Anatolia, Turkey.

The European Bank for Reconstruction and Development (EBRD) has published a great overview on its financing of the expansion of the Kizildere III geothermal power plant expansion by Zorlu Energy in Turkey.  Translated version of the EBRD case study: Turkish

Project Description

Provision of a senior loan of up to USD 70 million to Zorlu Dogal Elektrik Uretimi A.S. (Zorlu Dogal) guaranteed by Zorlu Enerji Elektrik Uretimi A.S. (Zorlu Enerji) and Zorlu Holding A.i. (Zorlu Holding).

The transaction is part of an up to USD 270 million financing package to be used for the construction of the 70MW Kizildere III Unit 2 geothermal power plant located in West Anatolia, Turkey.

Project Objectives

Contribution to the development of base load, indigenous energy resources in Turkey that are essential to support macro-economic stability in a sustainable manner as they reduce the country’s needs for energy imports.

Transition Impact

The project’s transition impact is expected to stem from three factors:

  1. the demonstration of new replicable activities through the use and market expansion of innovative technologies including triple-flash turbines and Organic Rankine Cycle, the latter being applicable to many other sectors in the form of waste-heat-recovery systems;
  2. the increase in private ownership in the generation sector in Turkey, still dominated by stateowned EUAS;
  3. the setting of standards for business conduct with the implementation of GHG emission abatement safeguards to limit carbon emission associated to non-condensable gases dissolved in geothermal resources.


Zorlu Dogal was established in 2008 to build and operate renewable energy assets. It is fully owned by Zorlu Enerji, one of the largest independent power producers in Turkey listed in the ISE and which was the Bank’s first client in Turkey. Zorlu Enerji is in turn majority owned by Zorlu Holding, an important Turkish conglomerate with activities in textile, electronics, energy and real estate.

Finance Summary

EBRD financed USD 70 million of a total project cost of USD 270 million. The transaction is part of an up to USD 270 million financing package to be co-financed by Akbank, IsBank and TSKB.

Environmental and Social Summary

Categorised A. The Project is the increase of an existing Geothermal Power Plant (GPP) from 100 MWe at the Kizildere III (unit1) to 165 MWe through the construction and operation of Kizildere III GPP (Unit 2), consisting of a new generating unit as well as the associated boreholes, pipelines and transmission lines. Due to the size, location and cumulative impacts from existing units (Kizildere I, II and III), the Project required an Environmental and Social Impact Assessment (ESIA) in accordance to the Bank’s Environmental and Social Policy prior to Board consideration. An ESIA disclosure package was disclosed by the Sponsor on 8 December 2016.

The Company acquired the 17.4 MWe Kizildere I GPP in 2008, which has been in operation since 1984 and expanded this in 2013 with the 80 MWe Kizildere II GPP. Kizildere III GPP (unit 1) is a new project in the same field and is currently under construction. Although this is not part of the Bank’s
financing, the Bank’s due diligence and ESIA disclosure includes cumulative issues associated existing operations of Kizildere I and II as well as the Kizildere III (Unit 1) under construction and the planned expansion through the construction of Kizildere III (Unit 2).

An independent consultant was retained to undertake an Environmental and Social Due Diligence (ESDD) of the Project. The ESDD confirmed that the Project will have no impacts on any protected areas, and is structured to comply with the Bank’s Performance Requirements, National and Equator
Principle requirements. The project is being subject to a Turkish Environmental Impact Assessment (EIA) process, which is running in parallel to the Bank’s disclosure process. A positive conclusion of the Competent Authorities and issue of permits is a condition of financing the Project.



The Company will also work jointly with the Geothermal Association and local stakeholders on undertaking further studies on cumulative impacts associated with geothermal energy generation in this area.


There is an Environmental and Social Impact Assessment available for this project


Further details via the link below.

Source: EBRD

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