TURKiYE KALKINMA BANKASI A.~.

PROJECT FINANCIAL STATEMENTS AND SPECIAL ACCOUNT

ADDITIONAL FINANCING FOR PRIVATE SECTOR RENEW ABLE ENERGY AND ENERGY EFFICIENCY PROJECT LOAN N0.8114-001-TR AND 8114-002-TR

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Deloitte.

TURKiYE KALKINMA BANKASI A.S. TO THE BOARD OF DIRECTORS

ANKARA

INDEPENDENT AUDITOR'S REPORT

DRT Bag1ms1z Denetim ve Serbest Muhasebeci Mal i Mu~avirli k A.~ . Armada I ~ Merkezi A Blok Kat:7 No:S 06510 sogutozu, Ankara, Turkiye

Tel : (312) 295 4700 Fax: (312) 295 4747 www.deloitte.com.tr

We have audited the accompanying fmancial statements comprising additional disclosure notes of the Additional Financing For Private Sector Renewable Energy and Energy Efficiency Project (the "Project"), financed under International Bank for Reconstruction and Development (IBRD) Loan No. 8114-001-TR AND 8114-002-TR as of 31 December 2012 implemented by Tiirkiye Kalkmma Bankas1 AS. ("TKB" or "the Bank"). These financial statements are the responsibility of the Bank's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with International Standards on Auditing and IBRD guidelines applicable to the audit of fmancial statements. These standards and IBRD guidelines require that we plan and perform the audit to obtain reasonable assurance about whether the fmancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fmancial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

The Project management's policy is to prepare the accompanying statements on the cash receipts and payments basis in conformity with International Accounting Standards issued by the International Accounting Standards Board. On this basis, cash receipts are recognized when received and cash expenditures are recognized when paid rather than when incurred.

In our opinion, the accompanying Project Balance Sheets, Special Account Statements, Uses of Funds by Beneficiary Enterprises Statements for the year ended 31 December 2012, have been prepared, in all material respects, in accordance with the terms ofthe agreements ofiBRD Loan No. 8114-001-TR AND 8114-002-TR and, expenditures have been applied to the purposes intended in such loan agreements.

Ankara, Turkey 28 May 2013

00...'\ (OF\G\\...\.~\L ~~~t\ \'-A'-~ ~\.)tAl" ~ · \ .

DRT BAGIMSIZ DENETiM VE SERBEST MUHASEBECi MALi MU$A ViRLiK A.S. Member ofDELOITTE TOUCHE TOHMATSULIMITED

Member of Deloitte Touche Tohmatsu Limited

TURKiYE KALKINMA BANKASJ A.S. ADDITIONAL FINANCING FOR PRIVATE SECTOR RENEW ABLE ENERGY AND ENERGY EFFICIENCY PROJECT As at 31 December 2012 in US$

PROJECT BALANCE SHEET

ASSETS

Special Account

Special Account -

Amounts Due from Beneficiary Enterprises

LIMAK BATI <;iMENTO A.S. 6,194,125 MENDERES GEOTHERMAL A.S. 29,603,000

Amounts Received from Beneficiary Enterprises

TKB's Account

TOTAL ASSETS

LlABILITlES

Amount Due to World Bank

Credit Line 35,601,500 Up-front Fee 337,500

TOTAL LlABILITlES

1

-

35,797,125

-

141,875

35,939,000

35,939,000

35,939,000

TURKiYE KALKINMA BANKASI A.~. ADDITIONAL FINANCING FOR PRN ATE SECTOR RENEW ABLE ENERGY AND ENERGY EFFICIENCY PROJECT As at 31 December 2012 in EURO

PROJECT BALANCE SHEET

ASSETS

Special Account

Special Account -

Amounts Due from Beneficiary Enterprises

KAPIDAG RUZGAR ENERJi A.~. 1,800,000 LiMAK BAT! <;:iMENTO A.~. 3,494,063

Amounts Received from Beneficiary Enterprises

TKB's Account

TOTAL ASSETS

LIABILITIES

Amount Due to World Bank

Credit Line 5,254,250 Up-front Fee 285,750

TOTAL LIABILITIES

2

-

5,294,063

-

245,937

5,540,000

5,540,000

5,540,000

TURKiYE KALKINMA BANKASI A.$. ADDITIONAL FINANCING FOR PRN ATE SECTOR RENEW ABLE ENERGY AND ENERGY EFFICIENCY PROJECT As at 31 December 2012 in US$

Special Account Statement

Openning balance as at January 1, 2012 IBRD advances during the year

Less: Refund to IBRD from Special Account during the year

Loans advances/expenses paid in the year

Closing Balance as at December 31, 2012 Unexplained Difference

Balance Per SA Statement

3

35,601,500

(35,601,500)

TURKiYE KALKINMA BANKASI A.$. ADDITIONAL FINANCING FOR PRN ATE SECTOR RENEW ABLE ENERGY AND ENERGY EFFICIENCY PROJECT As at 31 December 2012 in EURO

Special Account Statement

Openning balance as at January 1, 2012 IBRD advances during the year

Less: Refund to IBRD from Special Account during the year

Loans advances/expenses paid in the year

Closing Balance as at December 31,2012 Unexplained Difference

Balance Per SA Statement

4

5,254,250

(5,254,250)

T0RKiYE KALKINMA BANKASI A.$. ADDITIONAL FINANCING FOR PRIVATE SECTOR RENEW ABLE ENERGY AND ENERGY EFFICIENCY PROJECT As at 31 December 2012 in US$

USES OF FUNDS BY BENEFICIARY ENTERPRISES

Actual IBRD Actual CTF CwTent Year I Cumulative

to Date Current Year I Cumulative

to Date Renewable Energy Loans

MENDERES GEOTHERMAL A.$. 29,603,ooo I 29,603,000 - I

TOTAL 29,603,000 I 29,603,ooo I - I

Energy Efficiency Loans

LiMAK BAT! t;:iMENTO A.$. 6,194,125 I 6,194,125 I - I

TOTAL 6,194,125 I 6,194,125 I - I

TOTAL LOANS EXTENDED I 35,7_97,125 1 35,797,125 I - I

5

Actual (Total) CTF to Total Ratio (%) Current Year I Cumulative

to Date Ctment Year I Cumulative

to Date

- 29,603,ooo I 29,603,000 I - I -

- 29,603,000 I 29,603,000 I - I -

- I 6,194,125 I 6,194,125 I - I -

- I 6,194,125 I 6,194,125 I - I -

- I 35,797,125 I 35,797,125 I - I -

TURKiYE KALKINMA BANKASI A.$. ADDITIONAL FINANCING FOR PRIVATE SECTOR RENEW ABLE ENERGY AND ENERGY EFFICIENCY PROJECT As at 31 December 2012 in US$

USES OF FUNDS BY BENEFICIARY ENTERPRISES

Actual (SPONSOR EQUITY Actual!BRD FINANCING)

Current Year I Cumulative to Date

CmTent Year I Cumulative to Date

Renewable Energy Loans

Emerf(illK Renewable E11ergy Loans(EREL) MENDERES GEOTHERMAL A.$. 29,603,ooo I 29,603,000 14,88o,ooo I 14,880,000

ERELTOTAL 29,603,ooo 1 29,603,000 14,880,000 I 14,880,000

Energy Efficiency Loans

LiMAK BATI <;iMENTO A.$. 6,194,125 I 6,194,125 5,236,ooo I 5,236,000

ENERGY EFFICIENCY TOTAL 6,194,125 1 6,194,125 5,236,ooo I 5,236,000

TOTAL LOANS EXTENDED 35,797,125 I 35,797,125

Percentage allocated to Energy Efficiency Projects 17.30%

Percentage allocated to Commercial RE Projects 0%

Equity Financing/Total Total Project Expenditure(*) Project Expenditure(%) Cunent Year I Cumulative

to Date Current Year I Cumulative

to Date

70,45o,ooo I 70,45o,ooo I 21.12% I 21.12%

70,45o,ooo I 70,450,000 I 21.12% I 21.12%

11,430,125 I 11,430,125 I 45.81% I 45.81%

11,430,125 I 11,430,125 I 45.81% I 45.81%

(*) The balance shows all the project expenses until year-end, including expenses financed by other financing facilities. In the calculation of US$ balances, TRY

and EUR expenses are converted using average rates.

6

TURKiYE KALKINMA BANKASI A.:;>. ADDITIONAL FINANCING FOR PRIVATE SECTOR RENEW ABLE ENERGY AND ENERGY EFFICIENCY PROJECT As at 31 December 2012 in EURO

USES OF FUNDS BY BENEFICIARY ENTERPRISES

Renewable Energy Loans

Actual IBRD Current Year I Cumulative

to Date

KAPIDAoR.UzaAR ENERJi A.~. 1 1 ,800,0_(lo 1 1 ;8oo,ooo

TOTAL I 1,800,000 I 1,800,000

Energy Efficiency Loans

I LiMAKBATI <;iMENTO A.S. 3,494,063 1 3,494,063

TOTAL 3,494,063 1 3,494,063

TOTAL LOANS EXTENDED 5,294,063 1 5,294,063

Actual CTF Current Y earj Cumulative

to Date

-1

- I

- I

- I

- I

7

Actual (Total) Current Year I Cumulative

to Date

1,8oo,ooo 1 1,800,000

1,8oo,ooo I 1,800,000

3,494,063 1 3,494,063

3,494,063 1 3,494,063

5,294,063 1 5,294,063

CTF to Total Ratio(%) Ctment Year I Cumulative

to Date

- I

- I

- I

- I

- I

TURKiYE KALKlNMA BANKASl A.$. ADDITIONAL FINANCING FOR PRIVATE SECTOR RENEW ABLE ENERGY AND ENERGY EFFICIENCY PROJECT As at 31 December 2012 in EURO

USES OF FUNDS BY BENEFICIARY ENTERPRISES

Actual (SPONSOR EQUITY Actual IBRD FINANCING)

Current Year I Cumulative to Date

Current Year I Cumulative to Date

Renewable Energy Loans

Emerf(ing Renewable Enel"f(Y Loans(EREL) KAPIDAG RUZGAR ENERJi A.~. 1,8oo,ooo 1 1,800,000 14,375,000 I 14,375,000

ERELTOTAL 1,soo,ooo I 1,800,000 14,375,ooo 1 14,375,000

Energy Efficiency Loans

LiMAK BAT! <;:iMENTO A.$.(*) 3,494,063 I 3,494,063 - I -

ENERGY EFFICIENCY TOTAL 3,494,063 I 3,494,063 - I -

TOTAL LOANS EXTENDED 5,294,063 I 5,294,063

Percentage allocated to Energy Efficiency Projects 66.00%

Percentage allocated to Commercial RE Projects 0%

Total Project Expenditure Equity Financing/Total (**) Project Ex~ enditure(%)

Cun·ent Year I Cumulative Cunent Year Cumulative to Date to Date

43,638,ooo 1 43,638,000 32.94% 32.94%

43,638,ooo I 43,638,000 32.94% 32.94%

3,494,063 I 3,494,063 0.00% 0.00%

3,494,063 1 3,494,063 1 0.00% 0.00%

(*) Equity financing amount calculated and presented at "Uses of Beneficiary Enterprises - USD" table comprise total equity financing for the whole project including the equity financing for this loan in EUROs.

(**) The balance shows all the project expenses until year-end, including expenses financed by other financing facilities. In the calculation of EUR balances, TRY

expenses are converted using average rates.

8

TURKiYE KALKINMA BANKASI A.S. ADDITIONAL FINANCING FOR PRIVATE SECTOR RENEW ABLE ENERGY AND ENERGY EFFICIENCY PROJECT As at 31 December 2012 in US$

USES OF FUNDS BY FUNDS BY BENEFICIARY ENTERPRISES

01 Januar~ 2012 1st Quarter 2012 2st Quarter 2012 Beneficiary Enterprises

LiMAK BAT! <;:iMENTO A.~. 1,595,000 MENDERES GEOTHERMAL A.~. 6,345,000

Total Receivables from Loan Customers - - 7,940,000

TKB Up-front Fee 337,500

Total Uses of Funds - 337,500 7,940,000

9

3st Quarter 2012 :li!.Quarter 2012 Cumulative to Date

1,990,000 2,561,500 6,146,500 9,730,000 13,380,000 29,455,000

11,720,000 15,941,500 35,601,500

337,500

11,720,000 15,941,500 35,939,000

TURKiYE KALKINMA BANKASI A.:;>. ADDITIONAL FINANCING FOR PRIVATE SECTOR RENEW ABLE ENERGY AND ENERGY EFFICIENCY PROJECT As at 31 December 2012 in EURO

USES OF FUNDS BY BENEFICIARY ENTERPRISES

01 January 2012 1st Quarter 2012 2st Quarter 2012 3st Quarter 2012 4st Quarter 2012 Cumulative to Date Beneficiary Enterprises

KAPIDAG R0ZGAR ENERJi A.~. LiMAK BAT! <;:iMENTO A.~.

Total Receivables from Loan Customers

TKB Up-front Fee

Total Uses of Funds

2,985,000

2,985,000

285,750

3,270,750

10

1,795,500 473,750

2,269,250

2,269,250

I, 795,500 3,458,750

5,254,250

285,750

5,540,000

TURKIYE KALKINMA BANKASI A.~. ADDITIONAL FINANCING FOR PRIVATE SECTOR RENEW ABLE ENERGY AND ENERGY EFFICIENCY PROJECT As at 31 December 2012 in US$

USES OF FUNDS BY PROJECT ACTIVITY BY BENEFICIARY ENTERPRISES (REIMBURSEMENT OF EXPENDITURES INCURRED)

Opening balance as of January 1, 2012

l.Tranch Civil Works Goods Services

2.Tranch Civil Works Goods Services

3.Tranch Civil Works Goods Services

4.Tranch Civil Works Goods Services

5.Tranch Civil Works Goods Services

6.Tranch Civil Works Goods Services

Closing balance as of December 31, 2012

Menderes Geoterma1 A.~.

1,595,000

1,595,000

1,990,000

1,990,000

384,000 2,177,500 2,561,500

6,146,500

Limak Bati <;:imento A.~.

6,345,000

6,345,000

5,500,000 4,230,000

9,730,000

6,000,000 7,380,000

13,380,000

29,455,000

11

TURKi:YE KALKINMA BANKASJ A.$. ADDITIONAL FINANCING FOR PRIVATE SECTOR RENEW ABLE ENERGY AND ENERGY EFFICIENCY PROJECT As at 31 December 2012 in EURO

USES OF FUNDS BY PROJECT ACTIVITY BY BENEFICIARY ENTERPRISES (REIMBURSEMENT OF EXPENDITURES INCURRED)

Opening balance as of 1 January 2012

1.Tranch Civil Works Goods Services

2.Tranch Civil Works Goods Services

3.Tranch Civil Works Goods Services

4.Tranch Civil Works Goods Services

5.Tranch Civil Works Goods Services

Closing balance as of December 31, 2012

Kap1dag Rlizgar Enerji A.$.

1,795,500

1,795,500

1,795,500

12

Limak Bat1 <;:imento A.$.

2,665,000

2,665,000

320,000

320,000

263,750

263,750

210,000

210,000

3,458,750

TURKiYE KALIGNMA BANKASI A.$. ADDITIONAL FINANCING FOR PRN ATE SECTOR RENEW ABLE ENERGY AND ENERGY EFFICIENCY PROJECT LOAN N0.8114-001-TR AND 8114-002-TR For the Year Ended 31 December 2012

NOTES TO THE PROJECT FINANCIAL STATEMENTS

1- OBJECTIVES AND NATURE OF THE PROJECT

The Govermnent of Turkey received a loan of 135,000,000 US$ and 114,300,000 EURO for fmancing of Additional Financing for Private Sector Renewable Energy And Energy Efficiency Project from the International Bank for Reconstruction and Development (IBRD). The only implementation agency of the project is the Tiirkiye Kalkmma Bankas1 A.$. (TKB).

The primary objective of the " Additional Financing for Private Sector Renewable Energy and Energy Efficiency Loan", which is made available to Tiirkiye Kalkmma Bankas1 A.$. (TKB) through the Turkish Treasury, is to provide investment finance to private enterprises (Beneficiary Enterprises) engaged in investments for generation of electricity based on renewable resources. Purposes of the project is "to help increase privately owned and operated energy production ji-om indigenous renewable sources within the market-based fimnework of the Turkish Electricity Market Law, enhance energy efficiency and thereby help reduce greenhouse gas emissions".

2- OPERATIONS OF THE PROJECT IMPLEMENTING AGENCY

Tiirkiye Kalkmma Bankas1 A.$. ('the Bank') was founded in Ankara as Devlet Sanayi ve i~l'i Yatlflm Bankas1 in 1975, under the control of the Ministry of Industry. The Bank was founded by the State mainly to promote investment in certain sectors of the country.

With the decision of the "Supreme Planning Board" dated 20.01.1989, the Bank has been merged with the T.C. Turizm Bankas1 A.$.

The name of the bank has been changed as Tiirkiye Kalkmma Bankas1 A.$. in 1988 following a decision of the Council of Ministers.

The Bank is subject to the registered capital system. 99.08% of the capital is owned by the Undersecretariat of Treasury of the Turkish Republic and the remaining shares are quoted in the Istanbul Stock Exchange.

The Bank currently provides investment-banking services mainly to the fmancing of industry, tourism, education, health and energy sectors. Besides supplying loans in medium and long- tenns to the above mentioned sectors, the Bank also participates in other activity fields like project assessment, leasing, rehabilitation, equity participation, fund management, banking operations and training activities.

3- MAIN ACCOUNTING POLICIES

Tiirkiye Kalkmma Bankas1 A.$. uses the accrual basis of accounting to account for project transactions.

Disbnrsements to the local firms are recorded in local currency and translated to US $ and EURO with the exchange rate as of the date of the disbursement. The collections from the local firms are translated with the exchange rate valid on the collection date.

4- RESTRICTED USE OF FUNDS AND OTHER ASSETS

In accordance with the loan agreement between the Bank and IBRD, funds available in the Special Account are restricted to project purposes only.

13

TURKiYE KALKINMA BANKASI A.$. ADDITIONAL FINANCING FOR PRN ATE SECTOR RENEW ABLE ENERGY AND ENERGY EFFICIENCY PROJECT LOANN0.8114-001-TR AND 8114-002-TR For the Year Ended 31 December 2012

NOTES TO THE PROJECT FINANCIAL STATEMENTS

5- INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (IBRD) LOAN

TKB is obliged to pay a front -end fee in an amount equal to 0.25 % of the amount of its respective subsidiary loan used by the beneficiary enterprises to IBRD. The loan received from IBRD has a maturity of 25 years and repayments will start on May 15, 2022 and will end on May 15, 2036. Cost of borrowing is determined for each interest period to be at a rate equal to LIB OR for USD plus the Variable Spread provided and EURIBOR for EUR plus the Variable Spread provided. The payments dates are May 15 and November 15 of each year.

In order to draw down funds under the "Additional Financing for Private Sector Renewable Energy and Energy Efficiency Loan", TKB is entering into sub-loan agreements with beneficiary enterprises. The sub-loan agreements are in accordance with the " Additional Financing for Private Sector Renewable Energy and Energy Efficiency Loan", sub-loan terms and conditions and prudent banking practices. Sub-loans are being provided for capital investment expenditures for goods, civil works and consultants' services.

In 2012, IBRD has provided the special account of the project with a payment of US$ 35,601,500 and EURO 5,254,250 to be used by the beneficiary enterprises. TKB is obliged to pay IBRD a front-end fee in an amount of US$ 337,500 and EURO 285,750 for the total support amount of US$ 135,000,000 and EURO 114,300,000.

6- COLLECTION RATIO TABLES FOR ENTIRE PORTFOLIO

The loans granted to the beneficiary enterprises as of 31 December 2012 have maturity of at least 1 year and repayments will start in year 2013, therefore there are no collections of principals of these loans as of 31 December 2012.

14