The European Investment Bank (EIB) renews its support for smart growth in Turkey with a EUR 475 million total finance package for small and medium sized enterprises (SMEs) and mid-sized companies (mid-caps), as well as climate action. The finance package is in the form of four separate lending facilities, with four major public and promotional banks, which have strong and complementary market positions in the country, ie Halkbank, Türkiye Sinai Kalkınma Bankası (TSKB) and Ziraatbank for entrepreneurial activity and ILBANK for environmental and climate action.

The contracts were signed today in a public ceremony in Ankara by:  EIB’s Vice-President, Mr Pim van Ballekom, the Deputy Undersecretary of Treasury, Mr Cavit Dağdaş, Ziraatbank’s Board Member and General Manager, Mr Hüseyin Aydın, ILBANK’s General Manager, Mr Ahmet Candan, Halkbank’s Board Member and General Manager, Mr Süleyman Aslan, and TSKB’s Board Member and CEO, Mr Fevzi Onat.

On this occasion, EIB Vice-President Pim van Ballekom commented: “As newly appointed EIB Vice-President responsible for Turkey, I am particularly happy to announce that our support to Turkey’s smart growth remains steady and strong.  In 2011 we achieved a total of EUR 2 billion for 19 projects in Turkey in key sectors for the country’s development, and prosperity.  Supporting smart growth in Turkey is the quintessence of our financing policy in Turkey.  Today we sign a further package of EUR 475 million in loans for entrepreneurship and climate change in the country in cooperation with four major Turkish partner banks.  Our financial means and expertise as the largest multilateral financing institution blend in with the expertise of our local banking partners for the benefit of the flourishing entrepreneurial activity in Turkey.  The operation with ILBANK in favour of water and solid waste infrastructure opens up the co-operation between our two institutions for the benefit of Turkish local authorities and their population.  As the European Union’s bank, we are keen to reconfirm our large, swift and strong support to Turkey, which remains the largest recipient country of EIB financing outside the EU.  In 2012 we will focus further on the three pillars of the EIB activity in Turkey: public infrastructure, SMEs and corporate lending, the latter with a focus on support in favour of foreign direct investments, and the energy sector.  Support in favour of the Knowledge Economy and tackling Climate Change will remain among the top priorities of EIB in 2012.”

The EUR 325 million (repartitioned EUR 150 million to Halkbank, EUR 75 million to TSKB and EUR 100 million to Ziraatbank), is in the form of three separate lines of credit for financing small and medium sized investments by SMEs and mid-cap companies through Halkbank and TSKB, whereby Halkbank will particularly encourage investments located or re-locating to Organised Industrial Zones, while TSKB will focus on investments of mid-cap enterprises which they are particularly well placed to address by using their in depth knowledge of this market segment.  Ziraatbank will concentrate on SMEs in production, trade and services, outside the country’s large urban areas of Istanbul, Ankara and Izmir.

These lines aim to support a large number of economic activity sectors.  They target the whole range from small to mid-sized companies.  The EIB is starting to deploy, for the first time, loans to mid-caps in Turkey, to complement traditional EIB credit facilities and fill the gap between credit facilities for SMEs and individual direct loans for the large projects of bigger enterprises.  The EIB partners in Turkey have proven through numerous previous funding arrangements that they are well placed to on-lend EIB funds for the benefit of eligible investments.  The EUR 325 million in funding will enable the intermediary institutions to further improve the conditions they can offer to the end-beneficiaries of the EIB funding, especially in terms of the maturity of the loans provided.

A further EUR 150 million goes to ILBANK in the form of a line of credit for financing municipal investment schemes in the water and solid waste sector throughout Turkey.  This is the EIB’s first operation with ILBANK.  Over the last few years, the EIB has financed a number of large-scale water and urban transport projects implemented by the Turkish metropolitan municipalities.  However, in order to scale up its intervention in the water and solid waste sector and reach smaller municipalities too, the EIB is teaming up with ILBANK to widen its reach in favour of a broader range of local authorities.  Using ILBANK as a partner and intermediary, with their local know-how, will complement the EIB’s world-renowned expertise in providing both financial and technical services to local authorities.  Apart from making a distinctive contribution to improved environmental conditions and the living standards of the local population, the project will be an important instrument in advancing Turkey’s adherence to the environmental standards and policies of the European Union.