ICBC and China Construction Bank contribute to $523 million syndicated loan for 1.35 GW Kalyon Karapınar Solar Power Plant Project

In November 2021, Kalyon Güneş Enerjisi Üretim AŞ. — a special purpose vehicle and wholly owned subsidiary of Kalyon İnşaat Sanayi ve Ticaret A.Ş. — signed two loan agreements for the 1.35 GW Kalyon Karapınar Solar Power Plant Project: a £217 million ($288 million), 10-year buyer credit from JP Morgan with a full guarantee from UK Export Finance (UKEF), and a $523 million syndicated loan with a group of Chinese and non-Chinese banks that carries a 12-year maturity and an interest rate of LIBOR plus a 5.5% margin. Participants in the $523 million syndicated loan included Türkiye Vakıflar Bankası TAO, TC Zirrat Bankası, Denizbank A.Ş., Türkiye Kalkınma ve Yatırım Bankası (TKYB), Türkiye Garanti Bankası, Turkiye Sinai Kalkinma Bankasi A.S. (TSKB), ICBC Turkey Yatırım Menkul Değerler, a subsidiary of ICBC Turkey Bank, Industrial and Commercial Bank of China, Dubai (DIFC) Branch, and China Construction Bank. The purpose of the project is to contribute to renewable and zero carbon supply of electricity to the national grid, contribute to Turkey’s energy transition, and help meet the increasing electricity demands throughout Turkey. The project scope involves the installation of a 1.35 GW solar power plant in Karapınar district and Konya Province consisting of 3,376,890 photovoltaic (PV) panels with a gross capacity of approximately 1,000 MWac or 1,348 megawatts of DC power (MWdc), two substations (a 400kV substation at the north of the site and a 154kV substation at the south of the site), mounting and tracking structures, DC/AC current inverters, cabling, transformers, a Supervisory Control and Data Acquisition (SCADA) system, and electrical transmission lines (ETLs)—a 154kV ETL and two 380kV ETLs, which are all under 5km in length—to connect the produced electricity to the national grid. The 19.2km2 project site lies in the Central Anatolia region, approximately 100km away from the Konya airport. The Karapınar solar park will comprise up to 3.5 million ground-mounted photovoltaic (PV) solar modules for a total net output of 1,000MW. The other main components in the project include mounting (tracking) structures, DC/AC inverters, cable networks, transformers, substations, energy transmission lines, and supervisory control and data acquisition (SCADA) systems. The project involves the construction of two electrical substations, one in the northern section and the other on the southern edge of the site. It will utilise 400kV, 154kV, and 33kV feeders along with IEC 61850-based substation automation system. The Karapınar solar power project is planned to be developed in two phases, 200MW in phase one and 800MW in phase two. The other infrastructure facilities for the project include stormwater management, water supply, and drainage systems, apart from site fencing, a control building, a spare parts storage facility, and site access, and an internal road network. The electricity generated by the Karapınar solar power station will be evacuated to the national electricity grid through two separate connections. While a 400kV power transmission line will be connected to Yeşilhisar Substation, another 154kV power evacuation line will be connected to the Karapınar Substation for onward transmission into the grid. The project is part of the first solar tender launched by the Turkish Ministry of Energy under the Renewable Energy Resources Zones (YEKA) program in 2017, and hence a pathfinder for the sector. The deal was awarded to the lowest bid, with Kalyon offering $0.0699 per kWh and winning a 15-year PPA. The operating license for the project is 30 years. Genel Elektrik Sistemleri (GES), Vekon, Chain Logistics, Nexten Enerji, RINA Company, UK Grid Solutions Ltd and China Electronics Technology Group Corporation (CETC) are some of the contractors responsible for project implementation. Kalyon Enerji Group entered into a joint venture agreement with China Electronics Technology Corporation (CETC) for the development of the Karapınar solar power plant along with a PV module manufacturing facility. Genel Elektrik Sistemleri (GES) was awarded a turnkey contract for the basic and detailed design, equipment supply, erection, testing, and commissioning of the 400kV and 154kV substations for the project in November 2019. Vekon started manufacturing and supplying the profile structures for the Karapınar solar power project in July 2020, while Chain Logistics was contracted for the transportation of solar panels. Nexten Enerji was contracted for the construction and repair maintenance operations of the Karapınar project, while Vigi Group was contracted by the Kalyon Enerji and CETC consortium for the project management services in September 2019. RINA Company was contracted for the preparation of the environmental and social impact assessment (ESIA) report for the project in 2020. RINA was also engaged to carry out the site survey and investigation in December 2017. UK Grid Solutions Ltd, owned by General Electric Company, is supplying inverter stations, tracker systems and other electrical supplies to the project. Technology is also being provided by China Electronics Technology Group Corporation (CETC). Construction began on October 24, 2019. The Phase 1 production line was commissioned on August 19, 2020. The project was originally scheduled for full-scale commissioning in August 2023.

Additional details

1. AidData has estimated the all-in interest rate by adding 5.5% to average 6-month LIBOR in November 2021 (0.230$). 2. The ESIA can be accessed in its entirety via https://kalyonpv.com/documents/Environmental-and-Social-Impact-Assessment.pdf. 3. AidData has coded this transaction as a collateralized loan because Türkiye İş Bankasi A.Ş., Başkent Corporate / Ankara Branch was selected as the security agent (i.e. collateral agent) for the loan. When lenders take collateral as security for their loans, a collateral/security agent is often appointed to enforce rights against the collateral in the event of the borrower’s default under the loan. 4. The individual contributions of the 3 Chinese state-owned lenders are unknown. For the time being, AidData assumes equal contributions ($58,111,111) across the 9 participants in the $523 million syndicate loan. AidData has therefore estimated the joint financial contribution of 3 Chinese state-owned lenders as $174,333,333. 5. The Turkish project title is Konya Karapınar 1000 MW Güneş Enerji Santrali Projesi Alanı.

Number of official sources

8

Number of total sources

19