1. DenizBank 2013 EBRD Annual Meeting and Business Forum HAKAN ATEŞ
CEO, DENIZBANK FINANCIAL SERVICES GROUP

2. TURKEY AT A GLANCE

3. Turkey: Within 1st 20 Biggest Economy and Population
GDP (USD bn)
Population (mn)
Source: International Monetary Fund (IMF), TurkStat

4. 2002-2012 Average Real GDP Growth (%)
Growing at a Fast and Sustainable Pace
Average Real GDP Growth (%)
Source: International Monetary Fund (IMF), TurkStat

5. The Model Works in Turkey: Growth Creates Jobs without Distorting Inflation Outlook
Labor Force
Growth creates jobs
Unemployment is down to 10.6% from 16% at its peak during the crisis and below the 11% a the end of 2007 (before the crisis)
Inflation (%, CPI)
High growth does not distort internal balance, i.e. inflation
Inflation remains within the sustainable 5-10% band
Source: Turkstat

6. Debt to GDP (%, EU Defined)
This is Due to Strong Fundamentals (I) Prudent Fiscal Policy
Budget Balance
Primary Budget Surplus Remained high at 3.4% of GDP a year since 2002.
Debt to GDP (%, EU Defined)
Public debt continues to go down; 36% at the end of 2012.
Authorities target to decrease it further to 31% by 2015 according to the Medium Term Plan.
Source: The Ministry of Finance

7. Loans and Assets Annual Growth (%)
This is Due to Strong Fundamentals (II) Strong Banking Sector
ROE and CAR (%)
Banking Sector is not leveraged with assets 7.5 times the equity (or 18% Capital Adequacy Ratio).
Profitability is high enough to support the capital base to allow for high growth.
Loans and Assets Annual Growth (%)
The system grew by 19% CAGR a year in assets and 23% CAGR a year in loans since 2007.
Client deposits make up 65% of the system’s liabilities.
Source: BRSA

8. Turkey’s Sovereign Ratings
Rating Companies Recognized the Countries Successful Economic Performance and Strong Fundamentals
Turkey’s Sovereign Ratings
Fitch
MOODY’S
S&P
BBB+
Baa1
BBB
Baa2
BBB-
Baa3
BB+
Ba1 BB
Ba2
BB-
Ba3 B+ B1 B B2 B- B3
2012
2002
Investment Grade
Source: Bloomberg

9. Foreign Capital Inflows and Current Account Deficit
Rating Increases and Further Growth Potential Attract Foreign Investors
Foreign Capital Inflows and Current Account Deficit
Higher inflows allow for the current account deficit to rise.
Source: CBRT

10. Current Account Balance
So it creates Current Account Deficit; but in fact it is mostly due to energy import
Current Account Balance
Turkey’s Non Energy Current Account SURPLUS was USD 5 bn in 2012
Source: CBRT

11. GREEN ENERGY SUSTAINABLE GROWTH ENERGY EFFICIENCY
Energy → The main driver of Growth
Green Energy + Energy Efficiency → The main drivers of Sustainable Growth
GREEN ENERGY
SUSTAINABLE GROWTH
ENERGY
EFFICIENCY

12. Total Electricity Consumption of the World (2010):
Energy → The main driver of Growth
Total Electricity Consumption of the World (2010):
19.3 bn kWh
Developing countries (population: 5,7 bn) per capita consumption: 1,530 kWh p.a.
Developed countries (population: 1,3 bn) Per capita consumption: 8,820 kWh p.a.
Total Electricity Demand of the World (if electricity consumption per capita of the Developing Countries reaches that of the Developed Countries):
62 bn kWh
x 3.2
Considering global warming;
the World can not produce 62 bn kWh p.a.
Only, technologic innovations in green energy and investments in renewable energy & energy efficiency will allow sustainable energy production and growth!

13. For Sustainable Growth;
Global warming is a great threat!
Thanks to new technologies; devices are more energy efficient today.
A refrigerator consumes 75% less electricity than a refrigerator in 1975.
In order to produce $1 of GDP; we need 44% less energy than we needed in 1975.
Energy efficiency should be adopted as an objective by both individuals and corporations!
Renewable energy & energy efficiency are critical to sustainability, key to survival!
The world must limit the global temperature increase to 2˚C!
We must rapidly decrease using fossil fuels to stop global warming!
CO2 emissions since 1850 (red);
exponential growth (blue);
cuts to hit climate target (dashed).
Source: guardian.co.uk

14. Authorities are Taking Necessary Steps to Increase Energy Investments in Turkey

15. The New Investment Incentive Program
Specifically designed to encourage investments with the potential to reduce dependency on the energy imports.
According to the amended Renewable Energy Law at the end of 2010 the feed in tariffs are as follows:

16. Renewable Energy – Installed Capacity
2012:
Current electricity consumption in Turkey: ~242 TWh
Total installed capacity in electricity generation: ~57 GW
Renewable energy plants’ share: ~ 39%.
2023 Target:
The envisaged electricity consumption in Turkey: ~500 TWh (CAGR: 7.5%)
Total installed capacity in electricity generation envisaged: ~105 GW
Renewable energy plants’ share: ~ 30%
15,000 MW additional nuclear capacity will shift the installed capacity mix.

17. Renewable Energy - Generation
In terms of generation; renewables, natural gas, nuclear and other thermal power plants are expected to have an equal share of 25%.

18. Renewable Energy Installed Capacity Growth
Turkish renewable energy market mainly consisted of hydro power plants.
Starting from 2008, wind power plant investment have accelerated.
In the coming years, solar power plants will further boost.
Renewable installed capacity (MW)
2001
2012
CAGR
( )
Total
11,700
22,200 6%
Hydro
11,640
19,700 5%
Wind 18
2,200
55%
Geothermal 16
150
23%
Other 26
160
18%

19. As DenizBank; our track record in energy is a testament to our commitment to support the sustainable growth objectives of Turkey.

20. DenizBank Key Facts & Figures
Diversified Loan Portfolio with Significant Growth ( ):
48% CAGR!!
Total volume of PF transactions: USD 20 bn; since 2006
Total outstanding exposure: USD 5 bn

21. DenizBank Renewable Energy Track Record
Total outstanding energy exposure: USD 2.3 bn
Total ENERGY transaction size: USD 7.3 bn
Total Renewable energy transaction size: USD 6.5 bn
DenizBank ENERGY loan amount: USD 2.3 bn.
DenizBank Renewable loan amount: USD 1.7 bn
34%: Renewables
12%: Other

22. DenizBank Renewable Energy Track Record
DenizBank has financed 1,900 MW of power plants where 63% is Renewable energy: 1,200 MW portfolio, 46 projects
Thorough Environmental Due Diligences
All complying Equator Principles !

23. DenizBank Renewable Energy Track Record 2006 - 2013
ZORLU
Rotor WPP
Osmaniye Wind Farm
€ 135 M
MLA & Coordinator
2009
AKSA
Term Loan for Kapıdağ WPP
€ 39 M
MLA
2011
WIND
Power Plants
Term Loan for
Ayres WPP
SANKO
Çatalca WPP
€ 42M
2007
ENDA
Refinancing of
Tuzla GPP
$ 22M
Sole Arranger
2010
GEO-
THERMAL
Power Plants
RENAISSANCE
Refinancing of
Filyos HEPP
$ 32.5 M
Sole Arranger
2011
PETA
Term Loan for Mursal HEPP
$ 15 M
MLA
2010
ERNA
Term Loan for
Suçatı HEPP
$ 11M
2012
KADOOGLU
Kale HEPP
$ 22 M
YPM
Term Loan for Suşehri HEPP
$ 19 M
Y.ULUSOY
Vizara HEPP
$ 16 M
2009
MNG
BGT HEPP
AKFEN
HEPP Portfolio Financing
€ 222 M
SANKO
Term Loan for Yedigöze HEPP
$ 425 M
2008
AS INSAAT
Financing of
Muratlı HEPP
$ 59.4 M
LİMAK
Financing of Kirazlık HEPP
$ 90 M
SERKA
İncirli HEPP
$ 59 M
İŞBA
Refinancing of 2 HEPP’s
$ 55 M
MNG TURKON
Financing of Hamzalı&Reşadiye HEPPs
$ 149M
HYDRO
Power
Plants

24. PARTNERSHIP WITH EBRD

25. Awarded Strategic Partnership with EBRD
Cofinancing:
ROTOR WPP,
IDO acquisition,
TAV Izmir Airport.
Ongoing pipeline: natural gas distribution and production, healthcare PPP, ports
Funding: MidSEFF &TurSEFF:
The objective of MidSEFF & TURSEFF is to reduce Turkey’s dependence on fossil fuels by financing private sector investments in mid-size renewable energy projects.
MidSEFF: EUR 150 million (EBRD & EIB)
TurSEFF I: USD 40 million (EBRD & CTF)
TURSEFF II: EUR 40 million I (EBRD & JBIC)
Other/Equity:
Ongoing deal to be closed (Graniser) where EBRD will be the equity investor.
IDO
Privatization
2011
USD 750 mn
Zorlu Enerji
Rotor WPP
EUR 130 mn
2009
Internationally recognised transactions in cooperation with EBRD!!
Excellence in
Sustainable Energy
Financing
2013
Sustainability
Award
2012
testimony to the best-in-class service provided by DenizBank and the harmonious collaboration with EBRD; contributing to DenizBank’s brand recognition!!

26. 135 MW Zorlu ROTOR Wind Farm
I. Cofinancing
135 MW Zorlu ROTOR Wind Farm
Rotor WPP
2009
EUR 130 mn
EBRD’S FIRST FINANCING IN TURKEY!
Project Location : Osmaniye / Gökçedağ, Southeastern Turkey.
Project cost: EUR 210 mn
Loan Amount: EUR 130 mn
Tenor: IFI tranche 14 years, commercial loan tranche 12 years
Turbines: GE 2.5 XL
MLAs: EBRD, IFC, EIB, HSBC, DenizBank
DenizBank Role: Coordinator, MLA, Bank Guarantee Facility Agent, Hedging Bank, Onshore Account Bank

27. IDO Istanbul Ferries Privatization
I. Cofinancing
IDO Istanbul Ferries Privatization
Project Description: Financing the privatization of Istanbul Ferries
Acquisition Value: USD 861 mn
Acquisition finance facility amount: USD 858 mn
Tenor: 12 years
DenizBank Role: MLA, Account Bank
IDO
Privatization
2011
USD 750 mn

28. TAV Izmir Adnan Menderes Airport
I. Cofinancing
TAV Izmir Adnan Menderes Airport
Project Description : Financing of TAV’s new concession of Izmir International Airport
Loan Amount: USD 325 mn
Tenor: 15 years
DenizBank Role: MLA, On-Shore& Off-Shore Account Bank, Hedging Bank

29. II. Funding: MidSEFF &TurSEFF
MidSEFF & TurSEFF lines:
Objective: to reduce Turkey’s dependence on fossil fuels by financing private sector investments in mid-size renewable energy projects.
MidSEFF: EUR 150 million (EBRD & EIB)
TurSEFF I: USD 40 million (EBRD & CTF)
TURSEFF II: EUR 40 million I (EBRD & JBIC)
~ 90 diversified renewable energy & energy efficiency transactions
Mainly SME & commercial banking segment clients benefiting from a systematic approach:
Due diligence & double checking of the technical assumptions
ESAP (Environmental&Social Action Plan): Road map with concrete actions & supervision of environmental and social issues
Enhanced awareness of environmental standards
More Clean, Conscious and Sustainable!!!

30. THANK YOU.

31. APPENDIX

32. Electricity Overview - 1

33. Electricity Overview - 2
Turkey’s electricity consumption per capita is 3,226 kwh while EU, OECD and Russia’s are 6,700 kwh, 9,600 kwh and 6,600 kwh as of 2012 year end.
Installed capacity of Turkey has reached app. 57 GW as of 2012 year end with a CAGR of % 6.4 (last 5 years) where the share of renewable energy plants stands at 39%.
Annual electricity consumption in Turkey has reached 242 TWh as of 2012 year end, showing a CAGR of ~8.5% during the last 5 years.
The envisaged electricity installed capacity in Turkey will be 105 GW for the year 2023.
In order to meet the electricity demand in the following period, an additional installed capacity of 48 GW is planned to be added to the system during the next 10 years and reach to a level of 105 GW by 2023 with a CAGR of ~6.1%. The total investment amount required for an additional installed capacity of 48 GW can be envisaged as USD bn with the assumption of investment cost per MW is around USD 1.5 – 2.0 mio.
The share of renewable energy plants within the total installed capacity is envisaged as at least 30% in 2023.
In terms of share in total energy generation; renewables, natural gas, nuclear and other thermal power plants are expected to have an equal share of 25% in 2023.

34. Electricity Overview - 3
Liberalization in Energy started with the new power plant licenses given to the private sector. The government stopped building power plants and handed the business to private sector in BO or BOT type. Also the existing power plant portfolio began to be privatized, starting with the renewable (mostly HEPP) portfolio.
After the spin-off of Turkish Electricity Authority (TEK) into production, distribution, wholesale and transmission activities (EÜAŞ, TEİAŞ, TEDAŞ, TETAŞ) the distribution & transmission activities began to be privatized, by transferring the rights of operations in 21 regions nationwide.
By the new Energy Market Law, incentives are given to the renewable energy in terms of feed-in tariffs. Power plants of hydro, wind, geothermal, solar biomass and biogas enjoy 10-year purchase guarantee with high level feed-in tariffs.

35. Electricity Overview - 4
Under the Law on Utilization of Renewable Energy Resources enacted in 2005 and amended in 2007, companies holding retail distribution licenses were to purchase electricity from renewable producers at the average wholesale electricity price of the previous year. This price was varying between a minimum of EUR 5 cents/kWh and EUR 5.5 cents/kWh converted into TL.
The Parliament has amended the Law at the end of 2010 again. According to the new amendment, the final feed in tariffs per renewable source is presented in the table below.
Moreover, in the event that operators use locally made equipment and technology in renewable energy facilities, an additional support of 0.4 cents to $ 2.4 per kilowatt can be provided for a five-year term to companies that started producing energy before the end of 2015.