By Nibal Zgheib
The European Bank for Reconstruction and Development (EBRD) is supporting Turkey’s transition to an environmentally sustainable, low-carbon and climate-resilient economy through new Green Economy Financing Facility (GEFF) in the country.
Co-financed by EBRD and the Clean Technology Fund (CTF), Turkiye Sinai Kalkinma Bankasi (TSKB) will receive up to €53.5 million(US$57.8million) loan, the first green credit line under the newly established GEFF Turkey.
The new facility consists of concessional financing from the Clean Technology Fund (CTF) and grants from the CTF and Turkey–EBRD Cooperation Fund.
Through this loan, TSKB will extend green credit lines to companies to enhance their energy efficiency, renewable energy and climate resilience measures.
In addition, TSKB will receive a technical assistance package to support its corporate climate governance (CCG) and on-lending practices. Technical assistance with regards to CCG will focus on practices and recommendations developed by the Task Force on Climate-related Financial Disclosures (TCFD). TSKB is a long-standing EBRD partner bank and a listed private sector development and investment bank in Turkey.
EBRD Managing Director for Turkey, Arvid Tuerkner said: “The EBRD is very pleased that TSKB will be the first recipient of EBRD funding under the new innovative GEFF framework which, on top of providing green finance to businesses, also aims to improve Turkish financial institutions` corporate climate governance practices and to increase the sustainability of their operations.”
Commenting on the loan agreement with EBRD, TSKB CEO Murat Bilgiç said, “To ensure the effective management of climate-related risks and opportunities, it is critical for the real sector to transition to sustainable business models, which we call the green transformation. In this transition, impact-oriented development finance tools enable an inclusive transformation for all sectors. We, as TSKB, play an effective role in this field with our financing models based on sustainability criteria. We are happy to provide an additional source for sustainable investments with this new loan agreement that we signed with our esteemed business partner EBRD, which reinforces our decisive steps towards green economy.”
EBRD has been active in Turkey through its Sustainable Energy Financing Facilities (SEFFs) since 2010 with the launch of the Turkey Sustainable Energy Financing Facility (TurSEFF). This was followed by Mid-size Sustainable Energy Financing Facility (MidSEFF) later that year and Turkish Residential Energy Efficiency Financing Facility (TuREEFF) in 2014, with each product targeting a different sector and with different eligibility criteria to kick-start and develop the delivery of green finance.
The integration of the various products into one comprehensive framework, GEFF Turkey, will further facilitate serving local financial institutions’ and meeting their shifting priorities. It will also enable EBRD to expand into new fields of cooperation, namely corporate climate governance and equal access to finance.
To date, a total of €2.8 billion in financing has been made available by the EBRD and other international finance institutions through the green financing facilities in Turkey, to lend onto their customers and clients for investment in high-performing green technologies and an additional €1 billion has been obtained in private sector investments.
The EBRD is a leading institutional investor in Turkey since 2009 and to date it has invested more than €15 billion in the country through 372 projects, with the overwhelming majority of those investments in the private sector.
