Mobilising finance for Türkiye’s low-carbon transition

Addressing climate change is a national priority for Türkiye. The country is committed to the Paris Agreement, with goals to reduce greenhouse gas emissions by 41 per cent by 2030¹ and reach net zero by 2053. It is translating these plans into practice through dedicated climate policies such as the 2030 Energy Efficiency Strategy and Action Plan and the 12th Development Plan (2024-28), with key focus areas including the sustainable management of natural resources, energy conversion, the wider use of green technologies and investment in green infrastructure and the circular economy.

However, an estimated US$ 500 billion (€430 billion) of investment in green energy, buildings and transport will be needed to reach the net zero target.² Mobilising this level of funding will require not only external capital, but also the strengthening of the domestic financial system. Türkiye’s Banking Regulation and Supervision Authority (BRSA), the Banks Association of Türkiye (BAT) and the Capital Markets Board of Türkiye are already working towards this by increasing their climate-related expertise. This is enabling them to provide enhanced guidance and support to Turkish financial institutions on regulations and risk assessments related to environmental, climate and social issues – a key step in unlocking finance for Türkiye’s green transition.

To support Türkiye’s development of a greener financial sector, the EBRD introduced a framework combining:

• financing for green investments
• technical cooperation for partner financial institutions (PFIs) and their clients
• policy dialogue.

The Bank launched the first Green Economy Financing Facility (GEFF) programme in Türkiye in 2022, providing €521 million to PFIs to support loans for green investments. This was followed in 2024 by GEFF II, making a further €750 million available to PFIs to support areas including energy efficiency, renewable energy, climate resilience, biodiversity, the blue economy and sustainable transport and tourism.

A total of 13 partner banks and more than 700 projects had received support through both GEFF programmes by the end of 2025, leading to an expected emission reduction of more than 67,600 tonnes/year (equivalent to taking around 16,000 petrol vehicles off the road) and expected energy savings of over 1.2 million GJ/year.

The programme’s high utilisation rate and overall success led to the launch of its third iteration, GEFF III, in late 2025, which will provide a further €1 billion to support Türkiye’s green transition.

Technical cooperation under the framework has helped PFIs and their clients to introduce green practices. Most of this support has focused on two areas:

• implementing requirements and processes relating to new categories of eligible green financial products, including helping PFIs to assess sub-borrowers’ projects
• strengthening the long-term green finance capabilities of PFIs through extensive institutional capacity building.

The EBRD has also delivered masterclasses and workshops for Turkish banks on climate risk and governance, transition planning and regulatory compliance, training 56 banks in total, including 14 PFIs. 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, the EBRD played a key role in Türkiye’s adoption of its first climate-related banking regulation, the Green Asset Ratio (GAR), which came into force in 2025 and aligns with European Union (EU) taxonomy. The EBRD also 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.

Overall, the EBRD has contributed to Türkiye’s climate finance needs by channelling more than €2.2 billion in funding through PFIs in 2022-25. The Bank also mobilised over €70 million of concessional finance from donors such as the CIF, the Clean Technology Fund (CTF) and Crisis Response Special Fund, backed by the International Cooperation and Development Fund (TaiwanICDF). Complementary technical assistance support was also provided by donors such as the CIF, CTF and the Türkiye-EBRD Cooperation Fund.

The GEFF programme’s rapid expansion demonstrates a growing market for green finance in Türkiye. The doubling in size of the country’s GEFF support within three years has stemmed from high demand for climate finance, while the EBRD’s ability to support businesses and PFIs with green lending instruments and technical assistance has helped financial institutions to quickly integrate climate considerations into their operations and align with new regulatory recommendations and requirements, such as the GAR and Turkish Sustainability Reporting Standards (TSRS). PFIs are now using an increasingly innovative and diverse range of green financing, such as green bonds and sustainability-linked loans, showing growing diversity of instruments for businesses.

EBRD policy engagement under Türkiye GEFF II played a key role in encouraging adoption of the GAR. As Türkiye’s first climate-related banking regulation, it has helped catalyse sector-wide preparations for climate stress-testing and sustainability reporting. Reinforced by the launch of the TSRS at the end of 2023, it has made climate-risk management and disclosure a core requirement for financial institutions.

The combination of regulatory pressure, targeted technical cooperation and structured training for Turkish banks is gradually embedding climate governance in the financial sector. When the EBRD invested in sustainability bonds issued by a partner bank in December 2025, it marked one of the first times a Turkish bank had committed to developing and implementing a transition plan in line with the Paris Agreement, encouraging other banks to develop their own transition plans to keep up with market pressures. The early signs of systemic change are clear, even if full institutional reform is still under way.

Two main factors underpinned the success of Türkiye GEFF II. The first was the EBRD’s longstanding partnership with leading PFIs in the country. The Bank has regularly engaged with 13 PFIs since the approval of the first Türkiye GEFF framework, and these long-term partnerships led to elevated levels of trust, resulting in more ambitious projects and increased willingness to change behaviours, such as adopting transition plans.

The second success factor was close and ongoing cooperation with financial regulator BRSA. This included organising the 2023 and 2024 Pathways to Paris conference for PFIs and policymakers, at which the BRSA shared its vision through its Sustainable Banking Strategic Plan. The regulator also discussed progress and success stories, as well as the challenges facing Turkish banks in expanding green finance.

Lessons learned from GEFF II have included:

• External regulatory pressure can be a powerful catalyst for domestic reform. International policy developments such as the EU’s Green Deal and Carbon Border Adjustment Mechanism have created strong incentives for the Turkish authorities to accelerate climate-related financial regulation, underscoring the importance of having effective regulatory levers to drive change in the financial sector.
• The advanced maturity of PFIs was a key success factor. Turkish PFIs were already significantly engaged on climate finance, allowing 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.

1. From a 2012 baseline.

2. See ODI Global (2024), “Financing the climate transition in Türkiye: five key
takeaways”, London. Available at: https://odi.org/en/insights/financing-the-climate-transition-in-turkiye-five-key-takeaways/.