The Communiqué regulating the principles applicable to the project based securities, their issuance and the incorporation and activities of the project finance funds has been published. The Communiqué regulates the financing of projects for execution of public services such as transportation, infrastructure, energy, industry, technology, communication or health that entail a large amount of capital with long-term need through capital market instruments.

Accordingly, project finance funds can only be incorporated in Turkey by the founders bearing the qualifications specified in the Communiqué, and cannot be incorporated and used for purposes other than the issuance of project based securities (“PBS”). In addition, for all kinds of registry transactions including registration, amendment, annulment and correction to be conducted before trade registries and other official registries, the funds shall be deemed to have legal personality.

The application for the permission for fund incorporation and for approval of the offering circular or issuance document regarding the issuance of PBS shall be made to the Capital Markets Board (“CMB”). If the application is approved, fund’s bylaws approved by the CMB shall be registered by the founder in the trade registry and announced in the trade registry gazette. Incorporation procedures of the fund will be completed with the registration and announcement of the fund’s bylaws. The application for approval of the offering circular or issuance document for the issuance of PBS must be submitted to the CMB, along with the documents specified in the Communiqué, within six months at the latest as of the registration.

PBS can be issued by public offering or through sale to qualified investors without public offering, or provided that the unit nominal value is at least TL 100,000, by private placement or public offering abroad. PBS can be issued in Turkey at a single time.

In order that PBS can be listed in the stock exchange, in addition to the approval application to be made to the CMB, another application shall be made to Borsa Istanbul for that purpose. The PBS should be issued in dematerialized form before the Central Registry Agency (“CRA”) in electronic environment. For those that will be issued abroad, information specified in the communiqué must be submitted to the CRA.

Unless PBS issued within the scope of the issuance ceiling determined by the CMB is fully redeemed, and unless otherwise specified in the Communiqué, a new issue ceiling application cannot be made by using the same fund. A previously incorporated fund can be used for the issuance of a new PBS, provided that the PBS has been redeemed and the fund’s bylaws are aligned with the new issuance.

Assets that can be included in the fund portfolio, projects and their qualifications are also regulated under the Communiqué. Payments that will made to investors within the scope of the issuance of PBS shall be covered by the cash flows acquired from the assets in the fund portfolio. Expenditures that are allowed to be paid from the fund portfolio are also listed exhaustively.

The daily management of the assets in the fund portfolio shall be carried out by the service provider. Founder, funding institution or an organization qualified as founder can be a service provider. The duties and responsibilities of the service provider shall be determined by a written service contract executed between the fund board and the service provider.

The income obtained from the issuance of PBS shall be collected in a private account held at a bank and shall be managed on behalf of the issuer by investing in state bonds, Treasury bonds, lease certificates issued by the Treasury, term deposit accounts or participation accounts or other capital market instruments deemed appropriate by the CMB within the framework of the proxy’s duty of care. On the other hand, the income from the issuance will be used for the projects that are the subject of the issued PBS or for the repayment of the financial resources used for the completion of these projects as of the application date of the offering circular or issuance document.

The requirements for the establishment of a fund board and the establishment of fund internal control systems by the founder of the fund and the appointment of a fund auditor by the fund board, the information principles and the principles regarding the announcements are also regulated by the Communiqué.