The EBRD is boosting its support to energy efficiency projects in Turkey with a new US$ 40 million loan to Isbank for on-lending to local companies and households.
The loan is part of the EBRD’s US$ 240 million Turkey Private Sector Sustainable Energy Financing Facility, or TurSEFF, with Isbank, one of the leading banks in Turkey, becoming the fifth bank participating in the programme.
The EBRD’s loan will be used to finance energy efficiency and small-scale renewable energy investments such as industrial energy efficiency, thermal rehabilitation of buildings, small scale renewable investments, including geothermal, solar, biomass and biogas.
“Reducing energy intensity is one of the key priorities for Turkey, which relies on imports for 75 per cent of its energy needs. In achieving this goal, we are pleased to expand our cooperation with Isbank and support energy efficiency improvements that Turkish businesses and households will be able to undertake, helping them to reduce their energy consumption and cut costs,” said Michael Davey, EBRD’s Country Director for Turkey.
The project is supported by technical assistance grants provided by the Clean Technology Fund (CTF) and the European Union in collaboration with the Turkish Treasury. The funds will be used to support the participating banks in developing financing instruments for energy efficiency projects, to help sub-borrowers design and implement such projects, as well as to increase the awareness about the benefits of sustainable energy investments.
The US$ 240 million TurSEFF is only one example of the many successful Sustainable Energy Financing Facilities (SEFFs) that the EBRD has already established in 15 countries, ranging from Bulgaria to Kazakhstan. The Facilities are part of the Bank’s Sustainable Energy Initiative (SEI), which aims at tackling the climate change challenges and improving energy efficiency and security throughout the EBRD region.
As of the third quarter of 2011, EBRD funding approved for SEFFs has reached a total of €2.3 billion in loans to more than 50 partner banks which have been on-lent to hundreds of enterprises and tens of thousands of households. At the same time, bilateral and institutional donors and co-financiers have contributed over €375 million to support SEFF implementation. This includes about €500 million provided so far by the EBRD and co-lenders to five Turkish banks for funding medium-sized renewable energy projects.
This key Bank’s initiative is now estimated to be cutting carbon dioxide emissions by more than 2 million tonnes a year, roughly the annual CO2 output of a city the size of Yerevan.
TurSEFF includes US$ 46.7 million low-cost funding from the CTF, one of the two (along with the Strategic Climate Fund) multi-donor Trust Funds within the global Climate Investment Funds, set up to promote clean technologies by funding low-carbon programmes and projects with significant potential for long-term Greenhouse Gases (GHG) emissions savings.
In Turkey, the EBRD focuses on renewable and sustainable energy, small business development in the regions, agribusiness, municipal, environment and other infrastructure, and privatisation.
Since the beginning of its operations in Turkey in 2009, the EBRD has committed nearly €1 billion in about 30 projects with a total project value of around €2 billion, with 100 per cent of the projects being investments into the development of the private sector.