MICROCAPITAL BRIEF: EBRD launches GEFF Turkey with $56 million loan to TSKB for on-lending to reduce and adapt to climate impacts
The European Bank for Reconstruction and Development (EBRD), a UK-based multilateral development finance institution, “supports Turkey’s transition to an environmentally sustainable, low-carbon and climate-resilient economy” through the Green Economy Financing Facility (GEFF) Turkey. EBRD
operates separate GEFFs in 29 countries. The GEFF is funded in part by concessional funding from the Clean Technology Fund, a partnership between the EBRD and four other development banks active in Africa, Eurasia and Latin America.
GEFF Turkey’s first investment is a €53.5 million ($56.2 million) line of credit for Turkiye Sinai Kalkinma Bankasi (TSKB), a Turkish development bank, to increase its loans to businesses to adopt more environmentally sustainable practices. The EBRD will also provide TSKB with a technical assistance program which, according to Arvid Tuerkner, EBRD Managing Director for Turkey, aims “to improve the climate governance practices of Turkish financial institutions and increase the sustainability of their operations”.
Founded in 1950, TSKB serves businesses of all sizes. The institution reports total assets of TRY 84 billion (USD 5.7 billion) as of December 2021 with a 12-month return on equity of 17% and return on assets of 1.6%.
Founded in 1991, the EBRD seeks to support a “transition to open market economies, while promoting sustainable and inclusive growth” in 38 countries in Central Asia, Eastern Europe and North Africa. It does this by providing business advice, supporting trade finance, and investing debt and equity in micro, small and medium enterprise lenders. With a focus on “promoting private and entrepreneurial initiative”, the bank disbursed approximately €11 billion ($13.3 billion) for 411 projects in 2020. EBRD shareholders include 69 countries more EU.
By Sheen Gupta, Research Associate
Sources and additional resources
EBRD press release
https://www.ebrd.com/news/2022/ebrds-first-investment-under-new-green-financing-facility-in-turkey.html
EBRD homepage
https://www.ebrd.com
EBRD GEFF homepage
https://ebrdgeff.com/
TSKB homepage
https://www.tskb.com.tr/
TSKB Annual Report 2021
https://en.tskb.com.tr/en/investor-relations/financial-information
Description of the Clean Technology Fund
https://www.climateinvestmentfunds.org/topics/clean-technologies
Previous MicroCapital article on the EBRD
https://www.microcapital.org/microcapital-brief-ebrd-moves-to-block-russia-belarus-from-funding-technical-assistance-boost-financing-in-ukraine/
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