EBRD tells Turkey’s journey to become its largest market
LONDON
“The EBRD has been investing in Turkey since 2009. But our relationship with Turkey did not start in Turkey. It started all over the EBRD region where Turkish companies went to invest. And they went to many places where investors from Western Europe did not rush,” said the bank.
The EBRD’s first partners in Turkey
Visitors arriving by air to Georgia’s capital Tbilisi and Batumi, a city on the Black Sea, cannot fail to notice the logo of TAV, a Turkish airport holding founded by Akfen Holding. The modernization of both airports was carried out by TAV Urban Georgia in 2006 and 2007 and was financed by the EBRD in partnership with the International Finance Corporation (IFC).
“On a hot summer’s day, a Russian, Kazakh or Moldovan – or indeed Serbian or Ukrainian – may cool down with one of 12 beer brands produced in these countries by Turkey’s Anadolu Efes, member of Anadolu Group, that are exported to these countries. Drinking Coca-Cola may evoke an image of the U.S., but in over a dozen countries in the EBRD region the drink will have been bottled by a company belonging to the same company - Anadolu Efes - or indeed produced by Coca-Cola İçecek, a Turkish company, whose expansion the EBRD financed in places like Kazakhstan, Mongolia, Tajikistan and Turkmenistan,” summarized the bank its support to the company.
“The glass producer Şişecam is another example. The EBRD’s cooperation with the company dates back to 1997. Since then the EBRD has financed Şişecam’s operations in Bulgaria, Russia, Ukraine and later in Turkey with over 385 million euros. Today, the EBRD is a 15 per cent shareholder in Paşabahçe, Şişecam’s internationally renowned glass tableware unit,” said the bank.
With EBRD support, Şişecam also launched a glass recycling scheme. Green and white glass recycling containers bearing the logos of both Şişecam and the EBRD are now a common sight in Istanbul, Ankara, Antalya and Gaziantep.
Hands full with projects
So when the EBRD’s Board of Governors approved Turkey’s request to become a country of operations the EBRD already had a solid record of cooperation with Turkish corporates abroad.
“The first EBRD investment in Turkey was made in 2009 and today, just seven years later, it is the largest EBRD country in terms of investment,” said the bank.
“A lot is being done because there is a lot to do – we focus on sustainable energy and infrastructure; we work to strengthen the competitiveness of the private sector and to deepen capital and local currency markets; and we also promote regional and youth inclusion as well as gender equality across our investments,” it added.
The EBRD has an especially successful cooperation with Turkish banks, through which we finance small and medium-sized enterprises, energy efficiency improvements for businesses and households, smaller renewable energy projects and women-run enterprises – in fact, the EBRD’s flagship Women in Business program originated in Turkey and has since been rolled out in several other countries.
Promoting high quality growth
The EBRD’s pioneering Turkish partner Akfen Holding is a particularly good example of how the bank and its partners are boosting the Turkish economy and transforming whole sectors with best practices.
Akfen CFO Kadri Samsunlu said: “The EBRD has educated us on the importance of the quality of our growth. With the Bank’s support and guidance we have focused on financial, social and environmental sustainability. We have improved transparency and accountability, learned to better deal with decision makers, regulators, and other stakeholders and were able to become a best practice example for other companies.”
When the port of Mersin, operated by a joint venture between Akfen and PSA International issued a Eurobond (in fact Turkey’s very first infrastructure bond) the EBRD acted as an anchor investor and catalyzed investment by others. Due to its success this bond issue has become a blueprint for other infrastructure investments in the country.
Another company in the holding, TAV Group, has built a brand new high-tech and energy-efficient terminal at İzmir airport with an EBRD loan. On top of many attractive features, the terminal has garnered international recognition for the fact that 99 per cent of the old building was reused and recycled in the construction of the new one.
Last year, in an expression of the EBRD’s support for Turkey’s comprehensive capital market reform program, the EBRD acquired a 10 percent stake in the country’s unified stock exchange Borsa Istanbul.
Looking ahead with confidence
Turkey’s reform path has not always been a straight line as is the case with many other countries. Therefore, over time the EBRD has intensified its engagement as an investor and its work with the authorities on public policies. There are always lessons to be learned and shared, said the bank.
Mehmet Şimşek, Turkey’s Deputy Prime Minister, put it succinctly at an investment summit dedicated to Central Asia in Istanbul this year, organized by the EBRD and FT: “Turkey used the dynamism of the private sector. We made great progress. But we are not complacent. Turkey needs further reform to improve investment conditions, to improve business environment. We are eager to share our experience of getting from a country with a broken economy, heavily reliant on FDI, to a country which both welcomes foreign investment and is itself an investor.”
Jean-Patrick Marquet, Director for EBRD operations in Turkey, added: “Recognizing Turkey’s role as a gateway to a wide and diverse region spanning Central Asia, the Western Balkans and the southern and eastern Mediterranean, the EBRD will continue boosting the country’s economy and work with Turkish companies at home and abroad to benefit the people living in Turkey and in its extended neighborhood.”