This collaboration is marked by a €100 million loan agreement under the Green Economy Financing Facility (GEFF), aimed at supporting investments in energy efficiency, renewable energy, and climate resilience measures across various sectors in the country.
Background of the Partnership
The EBRD's commitment to Türkiye has been longstanding, with over €20 billion invested since 2009, primarily in the private sector. This new loan is part of a broader strategy to bolster the Turkish economy's transition to a low-carbon future. The GEFF initiative is particularly noteworthy as it not only provides financial resources but also promotes corporate climate governance practices among Turkish financial institutions, enhancing their operational sustainability.
Murat Bilgiç, CEO of TSKB, emphasized the importance of this partnership, stating that transitioning to sustainable business models is crucial for managing climate-related risks and opportunities. He noted that the new funding will serve as an additional source for sustainable investments, reinforcing TSKB's ongoing efforts toward green transformation.
Objectives of the GEFF
- Financing Green Investments: The loan will facilitate investments in technologies and services that promote energy efficiency and renewable energy sources. This aligns with Türkiye's goals to combat climate change and reduce carbon emissions.
- Gender-Responsive Financing: The GEFF II agreement introduces gender-responsive criteria for identifying beneficiaries, ensuring that women-led businesses and projects are prioritized in the funding process.
- Support for Diverse Sectors: The funds will be allocated across various sectors including agriculture, transportation, tourism, and biodiversity conservation. This holistic approach aims to integrate sustainability into multiple facets of the economy.
- Enhancing Corporate Climate Governance: By improving corporate governance practices related to climate change within financial institutions, the EBRD aims to foster a more resilient economic environment in Türkiye.
Impact on the Turkish Economy
The partnership is expected to have far-reaching implications for Türkiye’s economy. With high inflation and geopolitical tensions posing risks to economic stability, investments in green technologies could serve as a stabilizing force. The EBRD's investment strategy is designed to address these challenges by promoting sustainable growth and enhancing investor confidence.
In 2023 alone, the EBRD invested a record €2.5 billion in Türkiye, with more than half directed towards projects supporting green transition. These investments are crucial as Türkiye seeks to navigate its economic landscape while adhering to international climate commitments.
Opportunities for Businesses
For companies operating in Türkiye, this partnership opens up numerous opportunities:
- Access to Financing: Businesses can tap into the GEFF funds to finance their green projects, which can lead to reduced operational costs through improved energy efficiency.
- Support for Innovation: The focus on renewable energy and sustainable practices encourages innovation within industries as companies seek to develop new technologies and solutions.
- Market Competitiveness: By adopting green technologies, businesses can enhance their competitiveness both domestically and internationally, appealing to environmentally conscious consumers and investors.
- Collaboration with Financial Institutions: Companies can benefit from TSKB’s expertise in sustainable financing and gain insights into best practices for integrating sustainability into their operations.
The partnership between EBRD and TSKB represents a pivotal step towards achieving a greener economy in Türkiye. By providing substantial financial resources and promoting sustainable practices across various sectors, this initiative not only addresses immediate environmental challenges but also lays a foundation for long-term economic resilience.
As Türkiye continues its journey towards sustainability, such collaborations will be essential in driving meaningful change and fostering a robust green economy.
