Strong EIB support for Turkish investments for climate action and private sector

The European Investment Bank (EIB), the EU’s financing institution, is financing, with a total of EUR 230 million, climate action and private sector development in Turkey.  The funds are provided as follows:

• EUR 75 million goes to Turkiye Ihracat Kredi Bankasi A.S. (Eximbank) for export oriented and foreign currency earning Small and Medium-sized Enterprises (SMEs).  Eximbank is fully state-owned and acts as the official export credit agency of Turkey.  Its mandate is to support foreign trade, Turkish contractors and investors operating overseas through various credit guarantee, funding and insurance programs.  The EIB facility, in the form of a line of credit to Eximbank for onlending to SMEs, conforms fully with the EU and Turkish policies for regional development and SME support.  It will complement Eximbank’s other funding sources and will enable it to provide much needed long-term funds to SMEs and contribute to Turkey’s efforts to tackle the country’s current account deficit.
• EUR 80 million is for the expansion of the glass production capacity of Trakya Glass Bulgaria EAD (TGB).  TGB is the Bulgarian subsidiary of the Turkish glass company Turkiye Sise ve Cam Fabrikalari A.S. (Sicecam).  EIB has already provided support to Şişecam through two previous facilities in 2005 and 2007 in favour of the company’s capacity expansion and R&D programs in Turkey for a total amount of EUR 115 million.  The present facility will expand EIB’s contribution to target also the international activities of the Şişecam Group.  The EIB facility promotes foreign direct investment in Bulgaria and strengthens the export capacity of the country as TGB will export the bulk of its production to the EU, the Balkans and Turkey.  The investments in the new production lines will lead to additional job creation and consolidate the position of Targovishte as the centre of glass making in Bulgaria.  Whilst glass production is an energy intensive process, most of the flat glass production will cover demand for double glazing from renovation of buildings.  The annual CO2 savings from double glazing compensates the emissions associated with its production by a factor of at least ten.
• EUR 75 million is advanced to Turkiye Kalkinma Bankasi A.S. (TKB), the State owned development bank of Turkey.  TKB is a specialist public sector bank with a particular focus on channeling IFI funds to sectors of strategic importance for the development of the country. EIB’s partnership with TKB started in 2004.  Having intermediated 6 EIB facilities to date, TKB has established itself as an important partner bank for EIB for channeling funds to eligible final beneficiaries in Turkey.  The new operation targets renewable energy and energy efficiency investments, and builds on the successful co-operation the EIB has built up with TKB in this sector through two previous facilities. Investments in energy efficiency as well as the use of renewable power resources will improve energy security and lower GHG emissions compared to fossil-fuel based alternative electricity sources.  The project therefore contributes to EIB’s renewable energy and environmental policies, in particular climate change.