ICBC participates in $128.2 million syndicated term loan for financial restructuring of 78MW Karacaören 1 & 2 Hydroelectric Power Plants Project

Project narrative

In February 2022, the Industrial and Commercial Bank of China (ICBC), International Finance Corporation (IFC), and European Bank for Reconstruction and Development (EBRD) signed a $128.2 million senior secured amortizing term loan agreement with Kremna Enerji Üretim ve Ticaret A.Ş. ('Kremna') — a special purpose vehicle and wholly-owned subsidiary of Gama Enerji A.S. (GEAS) — for the Financial Restructuring of the 78MW Karacaören 1 & 2 Hydroelectric Power Plants Project. The loan's final maturity date is in August 2036. The Karacaören I dam is a clay-core earthfill structure 93 meters high. The dam impounds a reservoir of about 45.5 square kilometers. The reservoir holds up to about 1.2 billion cubic meters of water, enough for about six months’ electricity generation. A number of holiday homes and resorts are on the shores, and it supports many floating fish farms. As noted, neither the dam nor the reservoir are part of the acquisition. The intake, which is part of the acquisition, is separate from and south of the dam; water flows 468 meters through a tunnel to a surge tank and penstock, thence 207 meters to the powerhouse, which lies at the downstream toe of the dam. The powerhouse holds two 16MW JM Voith turbines, which since 2002 have operated at 37.1 percent capacity to generate an average of 104.1 gigawatt hour (GWh) per year. Water is discharged through four gates to the rock-armored bed of the Aksu River. Since the dam was completed in 1990, no floodwaters have had to be released through the floodgates and the spillways have not been used. Karacaören I also includes an administration compound several kilometers from the dam and powerhouse. This compound has several office buildings, a primary school attended by 125 local children, several residential buildings, a mosque, and a residence occupied by the local mukhtar (village headman). Apartments in the residential buildings formerly housed EÜAŞ staff and workers, but most are now vacant. A small store on the property serves local residents. The Karacaören II dam is located 10 river kilometers downstream of Karacaören I and is a concrete structure crossed by highway 685. The dam is 52 meters high and impounds a reservoir that holds about 33.8 million cubic meters, enough water to generate electricity for only 24 hours. An intake near the dam passes water into and through a tunnel 4.45 kilometers long to a surge tank and penstock, then 410 meters to the powerhouse. Electricity is generated by two 23.2MW Harbin turbines, which in recent years have operated at 38.3 percent capacity to generate about 155.5 GWh per year. Water is then discharged through four gates into the concrete- and rock-armored channel of the Aksu River, which at the Karacaören II tailrace is the backwater from a small hydropower project about three kilometers downstream. Since the dam was completed in 1993, floodwaters have had to be released through the floodgates and spillways only one time, in 1998. Karacaören II operates only when water is being released from Karacaören I, which is going to be regulated by water usage agreement. Although the Karacaören I reservoir’s capacity would allow peaking generation, power production and releases during farmers’ growing season are going to be regulated according to the water usage agreement.