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Overview

China Development Bank participates in $592.4 million USD-equivalent ESG-linked syndicated loan to Garanti Bank in May 2020

Commitments (Constant USD, 2023)$21,828,540
Commitment Year•2020Country of Activity•TurkeyDirect Recipient Country of Incorporation•TurkeySector•EnergyFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
May 20, 2020

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Funding agencies

State-owned Policy Banks

  • China Development Bank (CDB)

Cofinancing agencies

Private Sector

  • Bank of America Corporation
  • BNP Paribas S.A.
  • Citibank, N.A.
  • Commerzbank Aktiengesellschaft (Commerzbank AG)
  • HSBC (Hong Kong and Shanghai Banking Corporation)
  • ING Bank N.V.
  • Mizuho Bank, Ltd.
  • Société Générale S.A. (SocGen or Societe Generale)
  • Standard Chartered Bank PLC
  • Sumitomo Mitsui Banking Corporation (SMBC)
  • UniCredit Bank AG

State-owned Commercial Banks

  • Bank of China (BOC)

Receiving agencies

Private Sector

  • Türkiye Garanti Bank BBVA

Loan description

China Development Bank contribution to $592.4 syndicated loan to Garanti Bank as a mandated lead arranger

Interest type•Unknown

Narrative

Full Description

Project narrative

In May 2020, China Development Bank and Bank of China participated in a $592.4 million USD-equivalent ESG-linked syndicated loan to Garanti Bank. China Development Bank contributed to the loan as a mandated lead arranger. Bank of China contributed to the loan as a lead arranger. Twenty-eight lenders participated in total. Bank of America was sustainability co-ordinator. Standard Chartered joined BoA as a joint co-ordinator. Mandated lead arrangers were Bank of America, Citi, China Development Bank and SMBC. Lead arrangers were Bank of China, BNP Paribas, Commerzbank, HSBC, ING, Mizuho, Société Générale and UniCredit. This loan consisted of a €317 million EUR tranche with an interest rate of EURIBOR plus a margin of 200 basis points and a $245.5 million USD tranche with an interest rate of LIBOR plus a margin of 225 basis points. The ESG features of the loan included margin adjustment ratchet mechanisms based on the borrower's performance agreed on key performance indicators (KPIs), including the elimination of coal power plants from its project finance greenfield electricity portfolio and the sourcing of at least of 80% of its energy from renewable sources in an effort to reduce Scope 2 GHG emissions. This type of ESG loan is the first of its kind. The loan was renewed in June 2nd, 2022, and then again in June 2023.

Staff comments

1. The exact size of Bank of China and CDB’s respective financial contributions to the USD $592.4 million syndicated loan are unknown. For the time being, AidData assumes that all 28 members of the lending syndicate contributed equal amounts ($21,157,142.9).