TÜRKİYE SINAİ KALKINMA BANKASI A.Ş. The Summary Project Financial Statements of “Geothermal Development Project” With Independent Auditors’ Report As at 31 December 2018 TÜRKİYE SINAİ KALKINMA BANKASI A.Ş. GEOTHERMAL DEVELOPMENT PROJECT LOAN NO: 8653-TR SUMMARY PROJECT BALANCE SHEET AS OF 31 DECEMBER 2018 (Amounts expressed in USD unless otherwise stated.) SUMMARY PROJECT BALANCE SHEET Special Account 30.000.000 Amounts due from beneficiary enterprises 83.790.833 Amounts received from beneficiary enterprises 3.709.167 TOTAL ASSETS 117.500.000 Amount due to the World Bank 117.875.000 Credit Line 117.500.000 Up-front fee 375.000 Gain/Loss 10.564.946 Other (*) (10.939.946) TOTAL LIABILITIES 117.500.000 (*) “Other” comprises up-front fee (USD 375.000) and differences from interest received & paid and commitment fee (USD 10.564.946). 1 TÜRKİYE SINAİ KALKINMA BANKASI A.Ş. GEOTHERMAL DEVELOPMENT PROJECT LOAN NO: 8653-TR SUMMARY DESIGNATED ACCOUNT (“DA”) STATEMENT AS OF 31 DECEMBER 2018 (Amounts expressed in USD unless otherwise stated.) DESIGNATED ACCOUNT (“DA”) STATEMENT Opening balance as of 1 January 2018 30.000.000 IBRD advanced during the period 87.500.000 117.500.000 Refund to IBRD from DA during the period - Less: Finance advanced/expenses paid in period 87.500.000 Closing balance per DA Statement 30.000.000 2 TÜRKİYE SINAİ KALKINMA BANKASI A.Ş. GEOTHERMAL DEVELOPMENT PROJECT LOAN NO: 8653-TR NOTES TO THE PROJECT FINANCIAL STATEMENTS AS OF 31 DECEMBER 2018 (Amounts expressed in USD unless otherwise stated.) NOTES TO THE PROJECT FINANCIAL STATEMENTS 1- OBJECTIVES AND NATURE OF THE PROJECT Türkiye Sınai Kalkınma Bankası (“TSKB”) received a loan of USD 150.000.000 for financing of Geothermal Development Project from the International Bank for Reconstruction and Development (IBRD). The objective of the Project is to scale up private sector investments in geothermal energy development in the Republic of Turkey’s territory. The Project provides financing to Geothermal Developers to support license holders and financiers investing in geothermal project development at the capacity/production drilling stage; and the steam gathering, power plant, or direct use facility construction stage (Development Sub-projects). The lending instrument for the Geothermal Development Project is the World Bank's IBRD Flexible Loan (IFL) in US Dollar with a maturity till 2044 with a grace period that ends in 2024. The instrument will have a variable spread over the Reference Rate for the loan currency. Under the Guarantee of Republic of Turkey, as the Lender of Geothermal Development Project Loan, IBRD is on-lending the loan to TSKB. The on-lending is being carried out by means of sub-loan agreements between TSKB and Geothermal Developers 2- OPERATIONS OF THE PROJECT IMPLEMENTING AGENCY Headquartered in İstanbul and established in 1950 with the support of World Bank and the Central Bank of Turkey and shareholding of private commercial banks, Türkiye Sınai Kalkınma Bankası (TSKB) is Turkey’s first privately-owned development and investment bank. Since the day it was founded, TSKB has been supporting Turkey’s sustainable growth with its deep knowledge and experience as well as the broad array of corporate banking, investment banking, and consultancy services that it provides its customers. Through financial subsidiaries offering real estate and sustainability solutions, TSKB also adds value to its customers’ investments. The bank conducts its business through its head office in İstanbul and through its Ankara and İzmir branches. Ever since its inception, TSKB has been engaging in business partnerships with supranational financial institutions, international development agencies, and banks and financial institutions all over the world through which it brings qualified and themed global funds together with investments undertaken by the Turkish business world. With a wide range of credit options that include corporate lending, project finance, and much more, TSKB provides financing support to sustainable investment projects in many different sectors. At the same time and in its capacity as an effective investment bank, TSKB also gives its customers the benefit of its international-class investment banking experience with products and services that have been carefully crafted to meet their specific needs. As a bank that recognizes and internalizes the economic, environmental, and social aspects of sustainability, TSKB has undertaken many initiatives and it commands respect on that front not just in Turkey but abroad as well. TSKB is one of the pioneers in sustainable banking in Europe. 3 TÜRKİYE SINAİ KALKINMA BANKASI A.Ş. GEOTHERMAL DEVELOPMENT PROJECT LOAN NO: 8653-TR NOTES TO THE PROJECT FINANCIAL STATEMENTS AS OF 31 DECEMBER 2018 (Amounts expressed in USD unless otherwise stated.) 3- MAIN ACCOUNTING POLICIES The Bank prepares its summary project financial statements on cash basis. Accordingly, the Bank does not calculate any interest income and expense accrual for the related period. Disbursements to the Geothermal Developers are recorded in either in USD or EUR according to the sub-loan agreement between them and TSKB. The collections from the Geothermal Developers are also made in the corresponding currency. 4- RESTRICTED USE OF FUNDS AND OTHER ASSETS In accordance with the loan agreement between the Bank and IBRD, funds available in the Designated Account are restricted to project purposes only. 5- GEOTHERMAL DEVELOPMENT PROJECT LOAN IBRD agreed to lend to TSKB a total amount of USD 150.000.000 as Geothermal Development Project. The front-end fee equals to 0,25 % of the Loan amount. The amounts allocated to be extended as Goods, works, non-consulting services and consultants’ services under Sub- projects equal to USD 149.625.000. The loan has a maturity till 2044 and repayments will start in the year 2024. The amount of designated account as of 31 December 2018 is USD 30.000.000. TSKB is obliged to pay a front-end fee to IBRD in an amount of USD 375.000. As of 31 December 2018, the total usage of the loan portfolio is given as; Total Support Total Usage Collections Source (USD) (USD) (USD) World Bank /Treasury USD 117.500.000 87.500.000 - 4