Expanding green finance in Türkiye

Addressing climate change is a national priority for Türkiye. The country is committed to the Paris Agreement as well as reducing emissions by 41 per cent by 2030 (from a 2012 baseline) as as interim goal towards achieving its net-zero target by 2053. Türkiye is putting its climate policies into practice, including the 2030 Energy Efficiency Strategy and Action Plan and its 12th Development Plan (2024-28), which sets out the pathway to achieving its 2053 net-zero goal. The plan highlights several key areas for action: sustainable management of natural resources, energy conversion, investment in green infrastructure and the circular economy, and the wider use of green technologies.

Reaching the 2053 target will require significant investment Estimates suggest Türkiye requires more than US$ 500 billion cumulatively for investments in green energy, buildings and transport to meet this target. Mobilising this level of financing requires not only external capital but also strengthening of the domestic financial system.

To support this need, key bodies in the financial sector including, the Banking Regulation and Supervision Authority (BRSA), the Banking Association of Türkiye (BAT) and the Capital Markets Board of Türkiye (CMB), are strengthening climate‑related expertise and providing regulatory guidance and industry support to help Turkish financial institutions assess and disclose environmental, climate, and social risks.

To support a greener financial sector, the EBRD introduced a framework that combines financing for green investments, technical cooperation for Partner Financial Institutions (PFIs) and their clients, and policy dialogue. The Bank introduced the first Green Economy Financing Facility (GEFF) programme to Türkiye in 2022, providing €521 million for green investments, which was followed by a second, GEFF II in 2024. Under GEFF II, €750 million was made available to PFIs to support areas such as energy efficiency, renewable energy, climate resilience, biodiversity, the blue economy, and sustainable transport and tourism, amongst others. As of the end of 2025, 13 partner banks have been supported by the EBRD through the GEFF frameworks, financing over 700 projects that will lead to expected emissions reduction of more than 67,600 tonnes per year and over 1.2 million GJ/ year in energy savings. Following the high utilisation of GEFF II and overall success of the programme thus far, a third GEFF framework GEFF III was launched in late 2025, which provides €1 billion support to Türkiye’s green transition.

Technical cooperation under the framework has helped PFIs and their clients to implement green practices. Most of this support has focused on two areas: (i) helping partner banks and their clients to implement new requirements and processes relating to new categories of eligible green products, including how to assess sub-borrowers’ projects, and (ii) strengthening the long-term green finance capabilities of partner banks through extensive institutional capacity building. The framework also delivered masterclasses and workshops for Turkish banks on climate governance, transition planning and regulatory compliance. The EBRD has trained 56 banks – including 14 EBRD PFIs – on climate risk, governance and strategy. This has raised awareness and technical capacity across the sector and encouraged PFIs to voluntarily pursue transition planning and disclosure.

In terms of policy dialogue, we played a key role in the adoption of Türkiye’s first climate-related banking regulation – the Green Asset Ratio (GAR) – which aligns with EU taxonomy. The EBRD then helped implement the GAR through ongoing engagement with the BRSA, market participants and PFIs, including seminars and masterclasses that further strengthened the regulatory and institutional foundations for climate-related governance.

Since 2022 we have contributed to Türkiye’s climate finance needs by channelling around €2.2 billion in funding through PFIs and mobilising over €70 million concessional finance from donors such as the Climate Investment Funds (CIF) – Clean Technology Fund (CTF) and Crisis Response Special Fund (CRSF) backed by the International Cooperation and Development Fund (TaiwanICDF) Complementary technical assistance supported was also provided by donors such as the Climate Investment Funds (CIF) – Clean Technology Fund (CTF) and the Türkiye-EBRD Cooperation Fund.

The expansion of the GEFF programme over the years demonstrates a growing market for green finance, encouraged by EBRD’s ability to effectively support businesses and PFIs with green instruments. Since the framework began there has been an uptick in green lending – GEFF has scaled two-fold in the last three years, with high utilisation rates showing clear demand for green financial instruments and EBRD’s ability to help support this gap. With EBRD’s support, PFIs are integrating green financing into their operations and aligning with new regulatory recommendations and requirements , such as the GAR and TSRS. PFIs are also increasingly using innovative instruments, including green bonds and sustainability-linked loans, showing growing diversity of instruments for businesses in their own lending beyond EBRD support.

The policy engagement under Türkiye GEFF II played a key role in helping the BRSA to adopt the GAR. Since this engagement began, Türkiye’s financial sector has started to show early signs of systemic change, particularly in the regulatory landscape and PFIs awareness around climate risk. The most notable development is the launch of the Green Asset Ratio (GAR) regulation, which became mandatory in 2025. This marks Türkiye’s first climate-related banking regulation and is aligned with EU taxonomy and Basel standards. Its introduction has acted as a catalyst for sector-wide preparations for climate stress testing and sustainability reporting. These efforts have been reinforced by the Public Oversight Authority’s launch of the Türkiye Sustainability Reporting Standards (TSRS). Together, these developments have made climate-risk management and disclosure a core requirement for financial institutions, laying the groundwork for long-term systemic change. The combination of regulatory pressure, targeted technical cooperation and structured training for Turkish banks is gradually embedding climate governance into the financial sector, signalling the beginning of systemic change even if full institutional reform is still underway. For example, in December 2025 EBRD supported one of the first Turkish banks to do this, with an investment in sustainability bonds, which may pave the way for behavioural change across the market as other banks start to develop their own transition plans to keep up with market pressures.

A couple of factors underpinned the success of the Türkiye GEFF programmes. The first is EBRD’s longstanding partnership with PFIs in the country. The Bank has regularly engaged with 13 PFIs since the approval of the first Türkiye GEFF framework back in November 2021 . EBRD`s long-term partnership with the leading financial institutions in the country has led to elevated levels of trust, resulting in more ambitious projects and increased willingness to change behaviours, such as adoption of a transition plans.

The second has been the close cooperation with the financial regulator, BRSA. Since GEFF was developed, EBRD has maintained dialogue with both the BRSA and the Banks Association of Türkiye. In 2023 and 2024 EBRD organised the Pathways to Paris (P2P) Conference for PFIs and policymakers, where the BRSA shared its vision of its Banking Sustainability Strategy Plan, progress so far, success stories and challenges that Turkish banks face.

External regulatory pressure can be a powerful catalyst for domestic reform. International policy developments such as the EU Green Deal and the introduction of CBAM created strong incentives for Turkish authorities to accelerate climate‑related financial regulation, underscoring the importance of having effective regulatory levers in place to drive change in the financial sector.

The advanced maturity of participating financial institutions was a key success factor. Turkish PFIs were already significantly engaged on climate finance, which allowed the programme to focus on deepening practices rather than building basic awareness. Close coordination among PFIs, supported by strong regulatory signalling and supervision from the BRSA, proved essential in aligning approaches, accelerating implementation, and reinforcing consistent market behaviour.

Flexibility is essential in fast‑evolving policy environments. The ability to adapt technical assistance and engagement as regulatory and market frameworks evolved was critical to maintaining relevance and momentum throughout implementation.

Capacity building must go hand‑in‑hand with financing. Targeted knowledge exchange and hands‑on support significantly enhanced PFIs’ ability to translate GEFF financing into measurable climate impact.