Tuba Onğun
29 May 2024•Update: 29 May 2024
ANKARA
Türkiye’s export credit bank Turk Eximbank has signed a €1 billion ($1.1 billion) financing deal under the World Bank’s guarantee to support green transformation investments.
The loan deal for the "Türkiye Green Export Project" amounting to €1 billion under counter-guarantee of the Treasury and Finance Ministry, as well as the first-loss guarantee of €600 million from the International Bank for Reconstruction and Development (IBRD), a member of the World Bank Group, was signed on May 7, Turk Eximbank said in a statement Wednesday.
The 10-year facility, which was realized with the participation of Deutsche Bank, Standard Chartered Bank, BNP Paribas, and ING Bank, is Türk Eximbank's largest borrowing transaction to date and the first IBRD guarantee aimed at supporting exporters with their green transition.
The facility is a collaboration among IBRD, lenders, and Türk Eximbank to assist Turkish exporters in overcoming the challenges that may arise as a result of the EU’s Carbon Border Adjustment Mechanism (CBAM) that in its first phase will be implemented in high carbon-intensive production sectors as of 2026, other carbon-intensive sectors in the forthcoming period, as well as carbon taxes in other export markets.
The project will finance exporters' investments in renewable energy production and energy efficiency, as well as their working capital requirements.
The facility will also finance women-inclusive firms and Small Medium Enterprise (SME) financing.
General Director of Foreign Economic Relations of the Treasury and Finance Ministry, Kerem Donmez, said: "We give great importance to ensuring access to favorable financing conditions for Turkish exporters who are the driving power of our economy and to increase their international competitiveness by supporting their adaptation to CBAM."
Türkiye Country Director of World Bank, Humberto Lopez said: “The ongoing success of the export sector is vital for Türkiye’s economy, and its transition towards sustainability remains a high priority for the government.
“The World Bank is pleased to assist in these initiatives, which will not only support the worldwide shift towards a low-carbon future but also boost the competitiveness of both the firms and the country."
Türk Eximbank General Manager Ali Güney said, "Through this facility, we will do our part in the strategic road map to be drawn in line with the transition to a low-carbon economy and the protection of the competitiveness of our exporters in the related sectors. In this respect, the funding will also accompany Türkiye's climate change adaptation efforts while supporting the long-term finance needs of Turkish exporters."
