EBRD commits to €1.5 bln for Turkey with half for green financing
ISTANBUL-Anadolu Agency
The European Bank for Reconstruction and Development (EBRD) is committed to the continued success of the Turkish economy and the resilience of its private sector by continuing to offer green financing, the head of the bank said.
Turkey is already the EBRD's largest country of operation by annual investment and portfolio, with more than €14 billion cumulative investments since 2009. The majority, at 95%, is designated for the private sector and almost 50% is in support of the green agenda covering green financing and the low carbon economy, Odile Renaud-Basso said, at the start of her first in-person visit to Turkey.
'To date, the EBRD has provided €6.6 billion in green financing through 175 projects, mostly in the private sector but also to Turkish cities and households, in support of greater sustainability and resource efficiency,' she said.
This year, the EBRD is likely to provide around €1.5 billion in financing for the Turkish economy, roughly half of which is expected to be in green financing, Renaud-Basso said.
"I will reiterate the EBRD's commitment to Turkey, continued success of its economy and the resilience of its private sector. I will also emphasize the importance of stability, predictability and the rule of law for the development of the private sector and will call for the acceleration of the necessary reform measures to unlock more investment to the country," she said.
Later on her visit, she will announce details of the bank's doubling of finance for female entrepreneurs.
"Sustainability will be at the heart of my discussions," she said, as the EBRD finances low carbon transport in Ankara and İzmir, works on a €15 million loan for the acquisition of 100 compressed natural gas buses in Mersin along with a possible investment in a solar project by helping the city integrate solar power into electricity grids.
"I would like to seek views on what policies and measures could and should be adopted in support of the green agenda. It is with the right policies that we will be able to increase our own financing and attract more private investment from other sources to drive the green transition," she said.
Among the green financing offered to Turkey is a new landmark €150 million loan, a part of which is structured in line with the Green Loan Principles of the Loan Market Association. She said the loan is poised to be the first externally verified green loan in Turkish manufacturing.
€500 mln green economy fund to be approved on Nov 24
Turkey's ratification of the Paris Agreement and its net zero commitment, both of which she regards as major steps, has paved the way for more private sector participation and more investment activity from the EBRD.
Turkey ratified the Paris Agreement on Oct. 6 and committed to reach net zero emissions by 2053.
As a result, the EBRD board of directors is expected to approve €500 million in Green Economy Financing Facility (GEFF) for Turkey on Nov. 24.
The funds under the GEFF will be distributed to Turkish banks or leasing companies for private sector financing and to municipalities or households looking to invest in energy efficiency or small-scale renewable projects, Renaud-Basso said.
'We are now looking forward to Turkey's updated nationally determined contributions (NDCs) and to a long-term strategic action plan to meet these climate goals and transition toward a net-zero emission and more climate-resilient economy,' she said, noting that the decarbonization in energy generation, transport and agriculture, as well as a bolder switch from fossil fuels to renewables are critical parts of the agenda.
Greater climate ambition from Turkey is already unlocking more climate investment opportunities, with the $3.1 billion climate fund from France, Germany, the World Bank and the UN to Turkey that has been announced last week.