EBRD supports sustainable energy in Turkey

By Sergiy Grytsenko

The EBRD is providing support for private sector investments in mid-size sustainable energy projects in Turkey to increase energy savings in the country and to cut carbon emissions.

The funding comes via the EBRD’s Mid-size Sustainable Energy Financing Facility, MidSEFF, which was launched in December 2010 and which forms an important component of the EBRD’s support for Turkey’s long-term energy strategy.

DenizBank will receive €150 million under the MidSEFF framework and is one of four Turkish banks invited to join the programme and to promote sustainable energy in Turkey. MidSEFF funding is being closely co-ordinated with the European Investment Bank (EIB).

In this latest financing, the EBRD and the EIB are each providing €75 million to DenizBank for on-lending to private sector sustainable energy investments.

“The EBRD shares the Turkish government’s strong determination to reduce energy intensity and ensure the sustainable development of the energy sector. Promoting energy efficiency is one of the Bank’s key priorities and we are pleased to expand our cooperation with DenizBank by supporting important investments in energy projects,” said Michael Davey, the EBRD’s Director in Turkey.

The MidSEFF funding is provided through DFS Funding Corporation, the existing Diversified Payment Rights securitisation programme established by DenizBank in 2005. Importantly, the financing provides DenizBank with 12 year funding competitively priced for on-lending to Turkish clients. The funding is based on the securitisation of current and future hard currency Diversified Payment Rights, which is an established market instrument used by Turkish banks to raise long term funding in the capital markets.

DenizBank is the sixth largest private bank in Turkey. To date the bank has 500 branches in nearly all of 81 cities in Turkey.

Hakan Ateş, CEO of DenizBank, said:  “DenizBank Financial Services Group will use these additional  resources to contribute to stable economic growth in Turkey. Our Bank will continue to raise new resources for development of Turkish economy, and growth of energy sectors. I am certain that this new facility will be beneficial for our country and for our Bank”.

Through MidSEFF, the EBRD will offer a total of €400 million in loans to Turkish banks for on-lending to private sector borrowers to undertake mid-size renewable energy, waste-to-energy and industrial energy efficiency investments.

In December 2010, the EBRD and the EIB each provided €75 million for a total of €150 million in 12 year funding to Türkiye Garanti Bankası A.Ş., which was the first financing under MidSEFF. Two more banks, Vakif Bank and Akbank, are expected to benefit from the facility during 2011.

MidSEFF is supported by an additional comprehensive technical assistance programme, funded by the EU and other donors to support the preparation and appraisal of MidSEFF sub-projects and develop the voluntary carbon market in Turkey.

In Turkey, the EBRD focuses on renewable and sustainable energy, small business development in the regions, agribusiness, municipal and environmental infrastructure, and privatisation.

Since the beginning of its operations in Turkey in 2009, the EBRD has committed nearly €650 million across 27 private sector projects with a total project value of almost €2 billion. In 2010, the EBRD invested approximately €500 million in Turkey.