EBRD supports expansion of Turkey’s TKG Automotive

By Olga Rosca
@olgarosca


€3 million loan to finance new production lines and energy efficiency improvements

The European Bank for Reconstruction and Development (EBRD) is supporting TKG Automotive (TKG), a Turkish automotive components producer, with a €3 million loan to support the company’s expansion and improve its energy efficiency.

TKG is located in Bursa, a city at the centre of the Turkish industrial cluster for auto production. The company designs and produces automotive components for prominent clients such as Toyota, Renault, Fiat and Honda. Some 70 per cent of the company’s output is directly and indirectly exported, mostly to the European Union (EU).

TKG will invest a total of €5.5 million, of which €2.5 million will come from the company’s own resources, to build a new factory and launch two new production lines, nearly doubling the company’s production capacity. This investment will serve TKG’s goal of producing more value-added products to meet the demands of existing clients and attract new ones.

The EBRD, through its Advice for Small Businesses programme, is also helping the company develop a strategy for boosting sales in the European market and improving internal processes. Furthermore, it is supporting the investment with a full scope IFRS audit.

At the same time, the new production facility is expected to achieve energy and material efficiency improvements through investing in modern technologies that will set new standards in Turkey’s automotive components industry. Expected savings of around 590 MWh of electricity each year will be complemented by CO2 emission reductions of 333 tonnes per year.

Jean-Patrick Marquet, Director for EBRD operations in Turkey, said: “We are very pleased to extend this loan to TKG, a key player in Turkey’s automotive components industry. The expansion of its production will strengthen TKG’s already sizeable market position. The adoption of top energy-saving technology shows a way forward for the industry in Turkey and we expect this to become an example others will want to follow.”

Ertan Demirdüzen, Executive Board Member and CEO of TKG, said: “With the support of the EBRD, we will be able to increase our capacity by using more efficient and green production lines. We aim to develop our partnership with the EBRD in our next projects and hope to have a long-term cooperation in all areas.”

The project is in line with the EBRD’s Green Economy Transition approach (GET). Under GET, the Bank aims to increase its green financing to 40 per cent of its total annual investments by 2020 compared with a target share of 25 per cent over the previous five years.

The EBRD started investing in Turkey in 2009 and currently operates from offices in Istanbul, Ankara and Gaziantep. To date it has invested close to €9 billion in the country through more than 200 projects in infrastructure, energy, agribusiness, industry and finance. It has also mobilised nearly €20 billion for these ventures from other sources of financing. Some 98 per cent of the Bank’s investments in Turkey are in the private sector.