The EBRD is continuing to help Turkey become an energy-efficient and low carbon market economy with new financing of US$ 80 million provided to VakifBank for on-lending to private companies investing in energy efficiency and small-scale renewable energy projects.
The EBRD financing to the bank is provided under the EBRD’s extended Turkish Sustainable Energy Finance Facility or 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 another US$ 200 million in early 2013 to meet the growing demand for business energy efficiency and renewable energy investment among small and medium-sized Turkish enterprises (SMEs).
“The new funding will increase the role of Turkish banks in financing and promoting energy efficiency and will help shield SMEs from the impact of rising energy costs and high energy intensity in Turkey. This will save them money and make them more competitive in the long run,” said the EBRD’s First Vice President Phil Bennett at a signing ceremony in Istanbul, the venue for the EBRD’s 2013 Annual Meeting.
Energy efficiency in SMEs, a key sector of the economy, helps Turkey’s energy-intense economy get closer to its targets of reducing greenhouse emissions and of increasing the share of the renewables in its energy mix. It also helps reduce the country’s reliance on fossil fuels and enhance energy security.
In addition, with this financing, enterprises will be able to bring their environmental standards closer to EBRD and EU best practices, thus raising the bar for their competitors.
The EBRD investment comes with an EU grant that enables the EBRD to engage consultants to help banks and businesses with technical advice for energy-saving investments.
VakifBank, a full-service commercial and retail bank, is the seventh commercial bank and the third largest state-controlled bank in Turkey. It has been investing in energy efficiency under TurSEFF since May 2010.
Since 2010 about 90 per cent of TurSEFF funds were on-lent to 363 SMEs and 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 equivalent to 234,000 tonnes of oil equivalent per year or 6 GWh/year per US$ 1 million invested, which translated into yearly oil imports savings of some US$ 147 million. The projects financed resulted in a total reduction of 686,000 tonnes of annual CO2eq emissions.
Sustainable energy is a key EBRD priority in Turkey. To date, the Bank has invested more than €1.2 billion in Turkey’s sustainable energy – almost half of its total portfolio in the country. Since the beginning of its operations in Turkey in 2009, the EBRD has invested over €2.5 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 €1.0bn in new investments in 2012 alone.