The European Bank for Reconstruction and Development (EBRD) is providing $55m in new funds to Turkish lender Isbank to finance private companies investing in renewable energy and resource efficiency projects in Turkey.
It is part of the EBRD’s strategy to help Turkey meet a growing demand for electricity and diversify away from expensive imported fuel, while addressing the challenges of climate change.
The EBRD funds are extended through an investment in “A-” rated senior notes issued under Isbank’s Diversified Payment Rights (DPR) securitisation programme, an established market instrument used by Turkish banks to raise long-term funding.
The financing – supported by a €1.9 million grant from the European Union – will benefit renewable energy and resource efficiency projects in Turkey including solar, hydropower, wind, geothermal, waste-to-energy and energy efficiency as well as water saving and waste minimisation projects.
The investment comes under the EBRD’s recently expanded Mid-size Sustainable Energy Financing Facility (MidSEFF) now totalling €1.5 billion. So far 50 projects have been financed through seven Turkish banks under the facility, helping to build over 900 MW of additional renewable energy capacity.
I?bank is the largest private lender in Turkey and a long-standing partner of the EBRD. The new financing builds on I?bank’s solid track record in on-lending the Bank’s funds aimed at renewable energy and resource efficiency projects.
Noel Edison, Director of Financial Institutions at the EBRD, said: “The response to the previous round of financing we offered to I?bank under our MidSEFF programme was impressive. The lender has financed nine projects helping to create over 200 MW in additional renewable capacity and its pipeline for further successful investments by Turkish corporates remains strong.”
Yilmaz Ertürk, Deputy Chief Executive at Isbank, said: “We are very pleased to continue our longstanding cooperation with the EBRD and provide our support in realising the EBRD’s key role in addressing renewable energy, energy efficiency and climate change in Turkey. Isbank’s commitment to financing sustainable energy in Turkey under the EBRD’s MidSEFF programme was recognised with a MidSEFF Award earlier this year. Now, this new deal is yet another demonstration of Isbank’s continued drive to finance renewable energy and resource efficiency in Turkey as well as of its support to the Turkish economy.”
Investing in sustainable energy and resource efficiency is a strategic priority for the EBRD in Turkey. Almost half of the Bank's total portfolio in Turkey is in sustainable energy and since 2009 the EBRD has invested over €3 billion in more than 75 such projects, including two large wind farms – Bares and Rotor – and the largest geothermal power plant in Turkey (and second largest in Europe), Efeler.
The EBRD is also working closely with the Turkish Ministry of Energy and Natural Resources and has helped develop the country’s first National Renewable Energy Action Plan to attract more investment in renewable energy projects. The Bank has also supported the preparation of a National Energy Efficiency Action Plan, which is expected to include a wide range of sector-based resource efficiency measures aimed at achieving Turkey’s 2023 energy efficiency targets.
The EBRD started investing in Turkey in 2009 and currently operates from offices in Istanbul, Ankara and Gaziantep. To date it has invested over €8 billion in the country through more than 200 projects in infrastructure, energy, agribusiness, industry and finance. It has also mobilised nearly €20 billion for these ventures from other sources of financing. Some 98 per cent of the Bank’s investments in Turkey are in the private sector.