Project Description
The EBRD provided EUR 75 million long-term loan to SASA Polyester Sanayi A.S. (the “Company”, or “SASA”) to finance the Company’s Purified Terephthalic Acid (“PTA”) facility investment in Adana, Turkiye (the “Project”).
Project Objectives
The proceeds of the financing will be used by the Company to implement a state of the art PTA facility with an annual production capacity of 1.6 million ton. The Project will help the Company vertically integrate its operations and introduce operational improvements leading to increased competitiveness. Furthermore, the Project will enable the Company to introduce advanced corporate climate governance practices. The Project is in line with EBRD’s Strategy for Turkiye as it supports (i) higher value-added activities and (ii) increased energy and resource efficiency. The Project is also aligned with the EBRD’s Green Economy Transition Approach (“GET”).
Transition Impact
ETI score: 70
ETI score: 70
The transition impact of the Project will be derived from:
(i) Competitive quality as the Project will support the Company to vertically integrate its operations and introduce operational improvements leading to increased competitiveness.
(ii) Green quality as the Project will result in significant greenhouse gas emissions reduction (Scope 2 and Scope 3) and (ii) introduction of advanced corporate climate governance practices.
Client Information
SASA POLYESTER SANAYI AS
Established in 1966, SASA Polyester Sanayi A.S. is a joint stock company incorporated and domiciled in Türkiye that produces polyester staple fibers, filament yarns, polyester-based and specialty polymers and intermediates. SASA is majority owned by Erdemoglu Holding, a Turkiye based conglomerate operating in textile industry together with its subsidiaries with 79.38% shareholding, while the remaining 20.62% stake of the Company is listed on Borsa Istanbul.
EBRD Finance Summary
EUR 75,000,000.00
EUR 75,000,000
Total Project Cost
EUR 1,039,850,000.00
EUR 1,039,850,000
Additionality
Key sources of additionality are (i) financing structure as the tenor of EBRD’s loan is not readiliy available in the market from commercial lenders and (ii) standard setting as EBRD’s financing is instrumental in the adoption of higher standards and best practices by the company through implementation of advanced corporate climate governance milestones.
Environmental and Social Summary
Category B under the 2019 ESP. The Project was categorised by the Bank based on an Initial Environmental and Social Examination (“IESE”) which confirmed that environmental and social issues associated with the extension of an existing plant and is under construction with environmental and social issues being readily assessed and mitigated based on an Environmental and Social Due Diligence (“ESDD”). The Project is associated with the completion of construction and operation of a new production plant which will produce PTA adjacent to the existing site in Adana Province, Seyhan District which is a significant extension of the existing large operational chemical plant operating since 1966. The Project is expected to benefit significant measurable competitiveness improvements through reduction in cost of production. Currently, PTA is mainly imported from Asia (Republic of Korea and China make up 61%) and after this Project, PX, the main raw material of PTA, will be imported from the Middle East. The SASA will benefit from being closer to the region in raw material supply. After the Project is commissioned, SASA will be able to produce Polyester without having to import PTA as it will be produced as a part of an integrated industrial facility. The plant will be able to produce up to 1.6 million ton of PTA per year which will satisfy the existing facilities’ raw material demand and leave excess product for export purposes.
The PTA plant, once constructed, will have three main industrial process which are Oxidation Plant, Purification Plant, and Auxiliary Facilities including plant drainage, distribution of dried off gas through the plant, seal water, distribution of saturated steam, and an effluent treatment plant. SASA plan to remove the existing domestic and industrial wastewater treatment plant located within the existing operational boundaries of SASA and to construct a central wastewater treatment plant and water recycle unit for all SASA facilities, including the planned PTA Production Facility.
In accordance with national requirements an EIA process was conducted considering the project and its axillary facilities and an “EIA Positive Decision” was acquired from the MoEUCC on 19.01.2022. An Environmental and Social Impact Assessment (“ESIA”) was also undertaken by independent consultant in order to meet the requirements of International Finance Institutions. The meetings with local stakeholders were held at the early phase of project development and are documented as an appendix to the Stakeholder Engagement Plan (“SEP”). The national EIA was disclosed and the necessary public participation meeting was held. Additionally, as part of further environmental and social appraisal and due diligence a series of meetings were held with local stakeholders, including mukhtars, residents and groups with specific interests, e.g. women’s agricultural cooperatives or local chambers of agriculture, in order to capture their views on the potential Project impacts and benefits, their expectations and concerns. Project’s SEP contains provisions that allow for continuous consultations with the stakeholders.
An independent ESDD was undertaken by an international consultant and the ESDD included a review of current operations at the existing facility, as well as the feasibility studies and plans prepared for a new production plant including Company’s existing ESG management systems, local EIA and permits, previously prepared ESIA, the Life Cycle Assessment report. Due to the fact that there are a number of Financing bodies involved in the project, the ESDD has been scoped to determine the extent to which the project complied with the National as well as EU and International Environmental and Social standards. This provided an independent review against the Project Applicable Standards, which included among others; National environmental, health and safety and social laws and regulations, ILO conventions, Equator Principles 4 (“EP4”) (2020), IFC Performance Standards, OECD Recommendation of the Council on Common Approaches, EU environmental requirements such as the EU IED Best Available Techniques (“BAT”) requirements, EBRD Environmental and Social Policy (2019) and relevant Performance Requirements and Good International Industry Practice (“GIIP”). Overall the ESDD has confirmed that the Project is structured to comply with the Bank’s PRs and the Company has the institutional capacity to implement the Bank’s PR. The ESDD concluded among others;
– The Project has been subjected to an internationally and EU aligned ESIA process and impacts are considered to be well understood and can be addressed through effective mitigation;
– The Project is located to the south of the existing SASA Polyester plant and is an extension of the sites operations in a predominantly industrial area to the west of the city of Adana. The land use on the site prior to construction was agricultural however, the land was purchased by SASA for the purpose of the development of the site. This new facilities is on land owned by the sites and can be classified as a brownfield development within an industrial setting.
– The Project is located on land owned by SASA and in an area which is already heavily industrialised and of limited sensitivity (accepting mitigation for local residential and agricultural receptors is required);
– The plants main process is based on a market leading technology which is aligned to Best Available Technology requirements; and
– SASA have developed and are further developing mitigation measures and management systems appropriate to managing risks on an ongoing basis.
– The Company has ISO 9001 Quality Management System, ISO 14001 Environmental Management System, ISO 45001 Occupational Health and Safety System, ISO 27001 Information Security Management System and ISO 50001 Energy Management System certificates.
– Overall environmental and social issues can be readily assessed as part of due diligence.
– The Project was found as compliant with the Project Applicable Standards. The environmental and social issues associated with the plant can be readily assessed and mitigated.
Based on the ESDD an Environmental and Social Action Plan (“ESAP”) has been developed and greed with the Client and the Lenders to ensure that Project is structured to comply with Project applicable standards such as EU BAT and industry best practices. The ESAP includes institutional strengthening in measures as well as mitigation measures to ensure the Project compliance with EBRD PRs, including the following:
– Update and develop Company’s corporate sustainability and ESG (environmental, social and governance) reporting standards in line with EU reporting formats (such as EU Corporates Sustainability Reporting Directive – CSRD) in 2025. This will include the new plant as well as existing operations.
– Prepared/update the Company Environmental and Social Management plans for both construction and the operational phase of the project in line with an operational strategy.
– Set out clearer statements of commitments to pollution standards and a clear statement of alignment with Best Available Techniques as set out in the corresponding reference documents.
– Develop an Operational Resource Efficiency Plan
– Develop an appropriate operational emergency preparedness and response plan in line with national requirements (BEKRA) and SEVESO.
– Develop a Biodiversity Management Plan following additional surveys.
– Update the Cultural Heritage Management Plan to reflect works undertaken prior to lender involvement.
– Development and implementation of an air quality monitoring programme.
– Undertake a quantified analysis of key waste streams and identify specific disposal routes and potential methods for the recovery of materials.
– Update the SEP to include local NGOs representing local women, and to include provisions for stakeholder engagement in the event of changes, which will result in changes to the environmental or social risks and impacts.
– Update the Hazardous Substances Management Procedure to address the operational risks.
The Bank has set the requirements on emission KPIs in the ESAP, which the project will be designed and operated in line with EU BAT requirements, which include commitments to pollution standards and implementing processes and techniques to reduce waste as set out by reference documents relating to the chemical sector.
An NTS (Non-Technical Summary) has been developed for the Project and will be published by the Bank and Company in English and Turkish.
As part of the Stakeholder Engagement Plan, the Company will continue engaging with various stakeholders and local communities as part of national EIA as well as the NTS disclosure in order to ensure the continuous participation of people and groups that are directly or indirectly affected by the project.
The Bank will be monitoring the implementation of the Project through site visits.
Technical Cooperation and Grant Financing
None
Company Contact Information
Mehmet Uyanik
[email protected]
+903224410053
http://www.sasa.com.tr/
Sarihamzali Mah. Turhan Cemal Beriker Bulvari No:559 Seyhan / Adana, Turkiye
PSD last updated
07 Oct 2023
Understanding Transition
Further information regarding the EBRD’s approach to measuring transition impact is available here.
Business opportunities
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Specific enquiries can be made using the EBRD Enquiries form.
Environmental and Social Policy (ESP)
The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.
More information on the EBRD’s practices in this regard is set out in the ESP.
Integrity and Compliance
The EBRD’s Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.
OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to [email protected]. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank’s countries of operation. The information provided must be made in good faith.
Access to Information Policy (AIP)
The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.
Specific requests for information can be made using the EBRD Enquiries form.
Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.
Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM via email [email protected] to get guidance and more information on IPAM and how to submit a request.
