EBRD invested a whopping €2.5 billion in Türkiye last year

The European Bank for Reconstruction and Development (EBRD) invested a record €2.48 billion in Türkiye in 2023, boosted by the Bank’s swift response to the country’s recovery and reconstruction needs following February’s earthquakes.

Türkiye also received the highest volume of investment of all the Bank’s investee economies in 2023. In 2022, the EBRD had invested €1.63 billion in the country, while in 2021, it invested €2 billion.

In a challenging year for Türkiye, the EBRD remained committed to supporting the development of the country’s private sector and its green transition, particularly in the aftermath of the February earthquakes that hit the south-eastern region, causing widespread damage and claiming over 55,000 lives.

In the weeks following the disaster, the EBRD announced a multi-year €1.5 billion investment plan for the affected region, aimed at supporting the recovery, reconstruction and reintegration of the region’s economy. In addition to a €600 million Disaster Response Framework rolled out through local partner banks to expand financial opportunities for affected businesses and individuals, the plan also includes infrastructure investments and private-sector support for small and medium-sized enterprises (SMEs).

More than €800 million have already been made available to companies and individuals in the region as part of the earthquake response plan. These funds made up more than 30 per cent of the Bank’s investments in Türkiye in 2023. In addition to almost €400 million in disbursements under the Disaster Response Framework channelled through Isbank, DenizBank, Akbank, QNB Finansbank and Yapi Kredi, other key EBRD investments in the affected region included a €100 million loan to electricity distribution company Enerjisa Enerji, a €75 million loan to polyester manufacturer SASA Polyester Sanayi and a €25 million loan to energy company Mav Elektrik.

The Bank also announced a Reconstruction Assistance and Grant programme to help SMEs operating in the earthquake-impacted region reconstruct damaged buildings, production assets and infrastructure. The programme includes financial support from the Ministry of Finance of Japan.

Arvid Tuerkner, EBRD Managing Director for Türkiye, said: “The year 2023 was a very challenging one for Türkiye and its population given the magnitude of the damage inflicted by the February earthquakes. The EBRD remained committed to the country and, in addition to maintaining its usual priorities, was swift to deploy a comprehensive earthquake response plan aimed at preserving jobs, livelihoods and human capital in the affected region. More needs to be done, and the Bank stands ready to continue contributing to reconstruction efforts and Türkiye’s economy in the years to come.”

A growing green and inclusive agenda in Türkiye

Mr Tuerkner noted that the Bank’s green and economic inclusion initiatives in Türkiye also created momentum behind 2023’s record numbers.

“It was also a significant year for green and gender-related projects in the country,” he said. “The EBRD has been and will continue to be a key supporter of Türkiye’s journey towards a greener, more resilient and more inclusive economy.”

The Bank financed 48 projects in Türkiye last year, with 91 per cent of investments contributing to the country’s private sector and almost 58 per cent to its transition to a green economy. Sixty per cent of projects included gender components.

Some of the green and inclusive investment highlights were a €100 million financing package to ING Türkiye and ING Leasing to boost access to green finance; a €90 million loan to tyre manufacturer Brisa Bridgestone to help finance the manufacturing of fuel-efficient and low-carbon-emission products; a €70 million loan to TürkTraktör to support the modernisation of the company’s manufacturing facilities and further green investments; a €75 million sustainability-linked loan to Ulker Biskuvi; and a $200 million loan to Borusan EnBW under a syndicated structure with FMO, the Dutch Entrepreneurial Development Bank.

In 2023, the EBRD also launched a sustainable supply-chain finance programme, together with Citi, to support Finnish technology and services provider Metso Outotec and its suppliers in Türkiye.

The EBRD also continued to expand its municipal partnerships, welcoming Bursa, one of Türkiye’s largest cities, into its Green Cities programme. Bursa was the fifth Turkish city, and the 60th overall, to join the Bank’s programme. Fellow Green Cities Istanbul and Gaziantep also celebrated significant milestones in 2023, with the former launching its Green City Action Plan and the latter completing its plan.

The EBRD successfully utilised €41.5 million in donor funds in Türkiye in 2023, with the majority coming from the Small Business Impact Fund, the Climate Investment Funds and Türkiye.