EIB steps up its support for smart growth in Turkey: EUR 445 million for climate action and entrepreneurship

The European Investment Bank steps up its support for smart growth in Turkey with a EUR 445 million financing package for climate change and entrepreneurship. The financing package is in the form of different lending facilities with the Undersecretariat of Treasury in favour of the Ministry of Environment, Forestry and Urbanization, the Turkish State Railways (TCDD), and with the Turkish development banks Türkiye Sınai Kalkınma Bankası A.Ş. (TSKB) and Türkiye Kalkınma Bankası A.Ş. (TKB).

The contracts were signed today in a public ceremony in Ankara by EIB Vice-President MrMatthias Kollatz-Ahnen, Mr İbrahim H. Çanakcı, Undersecretary of Treasury, Mr Metin Pehlivan, Acting General Manager of TKB and Mr Orhan Beşkök, Senior Executive Vice President of TSKB.

On this occasion, EIB Vice-President, Mr Matthias Kollatz-Ahnen, commented: “Supporting smart growth in Turkey is the quintessence of our financing policy in Turkey. Today’s signatures in support of climate action and entrepreneurship are a decisive step forward not only for smart, but also sustainable growth. This is key to the prosperity of Turkey and its accession process to the European Union.  As the European Union’s bank, we are keen to reconfirm our strong support to Turkey, which remains the largest recipient country of EIB financing outside the EU. Today, we are reconfirming the depth and width of our relationship with Turkey through additional financing of EUR 445 million in support of the country’s key rail infrastructure priorities and Turkish efforts to develop and protect its forest resources. In addition, our financial means and expertise, as the largest multilateral financing institution, blends in well with the local expertise of our long standing partners TKB and TSKB to support the flourishing SME activity in Turkey.”

Mr İbrahim H. Çanakcı, Undersecretary of Treasury, commented:  “Turkey’s relations with the European Investment Bank have a long history, since the mid 1960s. The EIB has always been a leading international partner of our country and supported our social and economic development in every aspect.  The extension of a hefty amount of loans to finance our major infrastructure projects in public sector and the funds provided to our local banks in mobilizing resources to Turkey’s real economy are clear evidence of this support. EIB has provided financing not only for the infrastructure, transportation, energy and education projects, but also for innovation reinforcement and for scientific activities in Turkey in line with the recent EU strategies on smart and inclusive growth. Today we further broadened this cooperation, reaching new important areas of activity such as climate action with afforestation. I would like to express my satisfaction on the progressive collaboration between our institutions and take this opportunity to thank the EIB for its fruitful cooperation.  I strongly believe that our long-standing, mutual co-operation will further strengthen with new projects in the coming years.”

EUR 150 million to the Ministry of Environment Forestry, and Urbanization is for the improvement of Turkey’s forest resources. The project will support forest management, fire fighting and afforestation efforts.  Its scope covers the whole country, with special focus in Anatolia, where erosion and drought are more pronounced.  The investment concerns:  i) the rehabilitation of some 70,000 hectares of degraded forest as well as 30,000 hectares of rangeland,  ii) the afforestation of 100,000 hectares, and  iii) erosion control of 190,000 hectares.  It also includes follow-up activities for 1.4 million hectares, as well as investments in forest infrastructure and fire-fighting equipment.  This initial EIB loan for afforestation in Turkey signals the Bank’s prime interest in environmental-friendly and sustainable development in Turkey.

EUR 145 million in favour of the Turkish State Railways – TCDD is further strong support for improving the country’s rail network, as the environment friendliest transport means. This additional funding brings the total value of EIB support for the Turkish rail system in the last decade to some EUR 2 billion. This project aims at rehabilitating and implementing a signalisation system for the 415 km Irmak-Karabük-Zonguldak railway line.  The project links the Anatolia region with several ports on the Black Sea for freight and passenger transport.  Apart from generating significant environmental benefits, it will lead to time gains, improved security and boosted economic development. The project also has a pan-European dimension, as it links in to the extended Trans-European-Network (TEN-T) lines. The European Union is also providing a grant of EUR 190 million to the project through its Instruments for Pre-Accession (IPA) funds. This project is thus an excellent example of complementary use of EU grants and EIB loans for this priority investment in the sustainable transport infrastructure in the country.

A total of EUR 150 million to Türkiye Sınai Kalkınma Bankası A.Ş. (TSKB) and Türkiye Kalkınma Bankası A.Ş. (TKB) is in the form of two Loans for SMEs of EUR 75 million each to TSKB and TKB for the financing of small and medium-sized SMEs and their projects, comprising investments, services as well as working capital.   These lines aim to support the manufacturing, services and infrastructure sectors. SMEs can benefit from this with projects of less than EUR 25 million volume. Both TSKB and TKB are long-standing partner banks of the EIB in Turkey. Through numerous previous funding arrangements, they have proven to be well placed to on-lend EIB funds and to report efficiently about the allocation of the EIB loans.