IFC Helps Expand Gas Distribution in Turkey
The International Finance Corporation, the private sector arm of the World Bank Group, has signed an agreement with Palmet Metal Endüstri ve Ticaret A.ª. in Turkey to provide $12 million for its gas distribution activities. This is IFC’s first financing of a company in Turkey’s natural gas distribution sector.
IFC’s financing package consists of a $5 million loan to Palmet’s subsidiary operating in Gebze, Palgaz Doðalgaz Daðitim Sanayi ve Ticaret A.Þ. (Palgaz); a $2 million loan to Palmet’s subsidiary operating in Erzurum, Palen Enerji Doðalgaz Daðýtým Endüstri ve Ticaret A.Þ. (Palen); and a $5 million standby loan for future concessions. The proceeds of these loans will be used to fund the subsidiaries’ gas network expansion programs.
Established in 1984, Palmet’s main activities include IT and telecommunications infrastructure, high-precision air conditioning manufacturing, raised access floor manufacturing, and, most recently, natural gas distribution. Palmet has captured a significant market niche in the telecommunications areas and has worked with all major sector players in Turkey, including service providers and equipment suppliers.
Palmet made a strategic decision to invest in Turkey’s gas distribution sector six years ago, with a view to diversifying into a regulated utility business and to leveraging the close links to international contractors and utility service providers that it has established through its telecommunications work.
