The European Bank for Reconstruction and Development (EBRD) is playing a key role in Turkey’s efforts to become an energy-efficient and low-carbon market economy with a financing facility that now totals close to half a billion euros.
With a group of key partner banks, the EBRD is providing finance for on-lending to Turkey’s small and medium-sized enterprises (SMEs) wishing to improve energy efficiency or invest in renewable energy projects.
At a conference in Istanbul today, the Bank marked the second stage of its funding to help Turkish SMEs reduce their energy costs. The event brought together senior representatives from the Ministry of Energy and Natural Resources, partner banks, companies willing to invest in energy efficiency, and non-governmental organizations, among others.
The financing is provided under the EBRD’s extended Turkish Sustainable Energy Financing Facility (TurSEFF) – a dedicated finance facility aimed at supporting Turkey’s long-term energy strategy. Launched in July 2010, the US$ 284.2 million TurSEFF was extended by a further US$ 265 million in 2013 to meet the growing demand for energy efficiency and small-scale renewable energy investments among SMEs. Currently five commercial banks in Turkey – Akbank, Denizbank, Ișbank, Vakifbank and YapiKredibank – are financing energy-saving projects under TurSEFF.
“Turkey’s booming economy over the last decade has created an ever bigger need for energy. As Turkey works to strengthen its energy security and reduce reliance on fossil fuels, the EBRD helps businesses in the country move towards their own energy independence, which allows them to save energy and money, and become more competitive in the long-run. We are particularly proud that key local banks have joined us in this effort,” said Mike Davey, the EBRD’s Director for Turkey.
Greater energy efficiency for Turkey’s SMEs – a key sector of the economy – will help the country’s energy-intensive economy move closer to its targets of reducing greenhouse gas emissions and increasing the proportion of renewables in its energy mix.
This financing also enables Turkish enterprises to bring their environmental standards closer to EBRD and EU best practices, thus raising the bar for their competitors.
Any eligible SME willing to invest in energy efficiency measures or renewable energy projects can apply for up to €5 million financing at EBRD partner banks. In addition, the EBRD investment is supported by a comprehensive technical assistance programme, funded by the EU and the Clean Technology Fund, to assist banks and businesses with the provision of advice for energy-saving investments.
Since 2010 more than 90 per cent of TurSEFF funds have been on-lent to almost 400 SMEs, while more than 50,000 individual households in Turkey have benefited from energy-efficient heating and cooling technology through vendor finance schemes financed under the TurSEFF umbrella.
The first phase of TurSEFF achieved energy savings representing 234,000 tonnes of oil equivalent every year, which would correspond to the yearly electricity consumption of almost half a million Turkish homes, and some US$ 147 million in oil imports. The projects financed have resulted in a total reduction of 686,000 tonnes of annual carbon dioxide equivalent (CO2e) emissions, equivalent to the annual emissions of 260,000 cars.
Sustainable energy is a key priority of the EBRD in Turkey and represents almost half of the Bank's total portfolio in the country. Since the beginning of its operations in Turkey in 2009, the EBRD has invested more than €3.0 billion in the country, both in direct deals and through credit lines. Last year Turkey became the EBRD’s second-largest country of operations, with €1 billion in new investments in 2012 alone.