Turkey - Third Export Finance Intermediation Loan Project

Page 1 INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE I. Basic Information Date prepared/updated: 03/31/2005 Report No.: AC1387 1. Project Statistics Country: Turkey Project ID: P093568 Project Name: Third Export Finance Intermediation Loan Task Team Leader: Lalit Raina Estimated Appraisal Date: April 1, 2005 Estimated Board Date: May 26, 2005 Managing Unit: ECSPF Lending Instrument: Financial Intermediary Loan Sector: Banking (35%);Micro- and SME finance (35%);Other domestic and international trade (30%) Theme: Small and medium enterprise support (P);Export development and competitiveness (P);Other financial and private sector development (S) IBRD Amount (US$m.): 300.00 IDA Amount (US$m.): 0.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER 0.00 0.00 Environmental Category: F - Financial Intermediary Assessment Simplified Processing Simple [] Repeater [] Is this project processed under OP 8.50 (Emergency Recovery) Yes [ ] No [ ] 2. Project Objectives The proposed repeater project's main objective would be to continue to serve as a catalyst to support export and real sector growth in Turkey during the EFIL III implementation period (2005-2009) and beyond using the EFIL III reflows. To this end, the project would provide medium and long-term working capital and investment finance to Turkish private exporting enterprises, at the time when the economy is showing strong signs of rebounding from a recent slump and export performance is on the rise,thus increasing the demand for longer term credit, while the financial sector is still unable to support these trends with very much needed longer term funds at a reasonable cost. The secondary objective of the loan would be further improvement in the ability of the Turkish financial sector to provide financial resources to the enterprise sector, through further development of intermediation by private financial institutions, including banks and leasing companies. The project, through inclusion of leasing companies in addition to banks as PFIs, would enable the Bank to maintain a dialogue with the leasing sector in Turkey, provide an opportunity to gain more insight into the sector, and enable the Bank to support its development. The EFIL II experience, among other things, suggests that the dialogue between the Bank and the PFIs has a strong impact on establishing important Page 2 concepts by the PFIs of (i) environmentally sustainable lending, and (ii) long-term credit risk valuation of the borrowing companies. The EFIL III would continue to strengthen these concepts. 3. Project Description The project will provide a Bank Fixed Spread Loan (FSL) in two currencies,US Dollars and Euro - of 16-year maturity, including a 6-year grace period, to TSKB, a private Turkish investment and development bank, for further on-lending to eligible private financial intermediaries consisting of banks and leasing companies. The financial intermediaries will further on-lend the credit line funds to eligible private Turkish exporters of goods and services. The Bank loan will be guaranteed by the Turkish Government on behalf of the Republic of Turkey, for which the Government will charge TSKB a guarantee fee. EFIL III will replicate the same basic project concept as EFIL II. 4. Project Location and salient physical characteristics relevant to the safeguard analysis Istanbul, Turkey (location of the Borrower - TSKB Bank - and all of the financial intermediaries which will implement the Project). The sub-borrowers will be spread around the country. 5. Environment & Social Specialist's Team Mr Ronald N. Hoffer (ECSSD) 6. Safeguard Policies Triggered Yes No Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Cultural Property (OPN 11.03) X Indigenous Peoples (OD 4.20) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: Environmental Assessment policies (OP/BP 4.01) will apply to EFIL III. Environmental issues of sub-borrowers and their sub-projects will be addressed through the sub-loan environmental eligibility assessment. The environmental assessment will be carried according to environmental review procedures in the Operations Manual for the project. All environmental category III sub-projects will be subject to the Bank's prior review for Page 3 potential environmental impact purposes. There will be no large scale, significant, and/or irreversible impacts associated with the project. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: N/A 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. N/A 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. The Borrower, during the course of the proposed Project?s predecessor EFIL II project, has developed institutional capacity to determine and monitor environmental risks of individual sub-projects. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. N/A B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other: Date of receipt by the Bank 03/28/2005 Date of "in-country" disclosure 03/31/2005 Date of submission to InfoShop 03/31/2005 For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors * If the project triggers the Pest Management, Cultural Property and/or the Safety of Dams policies, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP. If in-country disclosure of any of the above documents is not expected, please explain why: The in-country disclosure for EFIL III of the Environmental Section of the Operations Manual will be done by TSKB through an advertisement in a local newspaper as well as on TSKB's website, explaining the environmental review guidelines applicable under EFIL III. C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting) OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) report? No Page 4 If yes, then did the Regional Environment Unit review and approve the EA report? No Are the cost and the accountabilities for the EMP incorporated in the credit/loan? Yes BP 17.50 - Public Disclosure Have relevant safeguard policies documents been sent to the World Bank's Infoshop? Yes Have relevant documents been disclosed in-country in a public place in a form and language that are understandable and accessible to project-affected groups and local NGOs? Yes All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities been prepared for the implementation of measures related to safeguard policies? Yes Have costs related to safeguard policy measures been included in the project cost? Yes Does the Monitoring and Evaluation system of the project include the monitoring of safeguard impacts and measures related to safeguard policies? Yes Have satisfactory implementation arrangements been agreed with the borrower and the same been adequately reflected in the project legal documents? Yes D. Approvals Signed and submitted by: Name Date Task Team Leader: Mr Lalit Raina 03/28/2005 Environmental Specialist: Mr Ronald N. Hoffer 03/31/2005 Social Development Specialist Mr Ronald N. Hoffer 03/31/2005 Additional Environmental and/or Social Development Specialist(s): Approved by: Regional Safeguards Coordinator: Mr Ronald N. Hoffer 03/31/2005 Comments: Sector Manager: Mr Gerardo M. Corrochano 03/31/2005 Comments: