Record financing from EBRD to Turkey

The European Bank for Reconstruction and Development (EBRD) provided a record 2.5 billion euros in financing to Turkey in 2023, with the contribution of post-earthquake projects. 58 percent of the financing provided was realized in the ‘green financing’ category. The European Bank for Reconstruction and Development (EBRD) made a record 2.48 billion euros in investment in Turkey in 2023, also with the impact of projects addressing reconstruction needs following the earthquakes that occurred in February. Turkey received the highest investment volume among all economies in which the EBRD invested in 2023. The EBRD invested 1.63 billion euros in Turkey in 2022 and 2 billion euros in 2021. Following the earthquakes that shook Turkey in February, the EBRD took steps to support the development of its private sector and green transformation. The EBRD announced a multi-year 1.5 billion euro investment plan aimed at supporting the recovery, reconstruction and reintegration of the economy of the region affected by the earthquake. The plan included infrastructure investments and private sector support for small and medium-sized enterprises, in addition to a €600 million Disaster Response Framework provided through local partner banks for affected businesses and individuals. According to a statement from the EBRD, more than €800 million in resources were provided to companies and individuals in the region as part of the earthquake response plan. These funds accounted for more than 30 percent of the EBRD’s investments in Turkey in 2023. In addition to approximately €400 million in financing provided through İş Bankası, DenizBank, Akbank, QNB Finansbank and Yapı Kredi under the Disaster Response Framework, other significant EBRD investments in the affected region included a €100 million loan to electricity distribution company Enerjisa Enerji, a €75 million loan to polyester producer SASA Polyester and a €25 million loan to energy company Mav Elektrik. The bank also announced a Reconstruction Assistance and Grant program to help SMEs operating in the earthquake-affected area rebuild their damaged buildings, production assets and infrastructure. The program included financial support from the Japanese Ministry of Finance. Arvid Tuerkner, EBRD Director for Turkey, said the following about the 2023 investments: “Given the magnitude of the damage caused by the February earthquakes, 2023 has been a very challenging year for Turkey and its people. The EBRD remained committed to the country and was quick to implement a comprehensive earthquake response plan aimed at protecting jobs, livelihoods and human capital in the affected region, while maintaining its usual priorities. Much remains to be done, and the EBRD stands ready to contribute to the reconstruction efforts and the Turkish economy in the period ahead. Green transition agenda Tuerkner noted that EBRD’s green and economic inclusion initiatives in Turkey were also a key element of the record financing in 2023. “This year has also been an important year for green and gender-related projects in the country. “The EBRD has been and will continue to be a key supporter in Turkey’s journey towards a greener, more resilient and more inclusive economy,” he said. Last year, the EBRD financed 48 projects in Turkey, with 91 percent of the investments targeting the country’s private sector and around 58 percent targeting its transition to a green economy. 60 percent of the projects included gender components. Green financing for companies Some of the highlights of green and inclusive investments include the €100 million financing package provided to ING Turkey and ING Leasing to increase access to green financing; the €90 million loan provided to tire manufacturer Brisa Bridgestone to help finance the production of fuel-efficient and low-carbon products; the €70 million loan provided to TürkTraktör to support the modernization of its production facilities and further green investments; the €75 million sustainability-linked loan provided to Ülker Bisküvi; and the €200 million loan provided to Borusan EnBW under a syndicated structure with the Dutch Entrepreneurial Development Bank FMO. euros in loans. In 2023, the EBRD also launched a sustainable supply chain finance program with Citi to support Finnish technology and services provider Metso Outotec and its suppliers in Turkey. The EBRD also continued to expand its municipal partnerships by including Bursa in the Green Cities program. Bursa became the fifth city from Turkey to join the EBRD program and the 60th city in total. Other Green Cities, Istanbul and Gaziantep, also took steps in 2023. Istanbul launched its Green City Action Plan, while Gaziantep completed its plan. In 2023, the EBRD also used 41.5 million euros in grant funding in Turkey, mostly from the Small Business Impact Fund, Climate Investment Funds and Turkey. Since 2009, the EBRD has provided 19 billion euros of financing to Turkey in 439 projects. 93 percent of these investments were transferred to the private sector.