€50 million loan to Garanti Leasing to benefit small businesses
The EBRD is providing a loan of €50 million equivalent in Turkish lira to Garanti Finansal Kiralama A.S. for on-lending to small and medium-sized enterprises (SMEs) in Turkey for energy efficiency investments.
The loan is extended under the third phase of the Turkey Sustainable Energy Financing Facility (TurSEFF III) which provides financing of €400 million to commercial banks and leasing companies for on-lending to private sector SMEs as well as public sector beneficiaries for sustainable energy investments.
TurSEFF III is supported by a technical cooperation programme of up to €5.5 million by the European Union (EU) to promote the sustainable use of energy in Turkey and support private sector development.
Sub-loans under the credit line will contribute towards building a green economy by facilitating the expansion of resource efficiency and renewable energy lending in Turkey. Examples of possible investments include energy efficiency, water efficiency, waste minimisation and small-scale renewable energy investments.
The loan will also strengthen the financial sector in the country and contribute to the wider proliferation of leasing. Although often a viable alternative to debt financing, the market penetration of leasing in comparison to GDP is one of the lowest in comparable economies.
Unal Gokmen, General Manager of Garanti Leasing, said: “In Turkey, leasing is a very important solution for SMEs as it helps them meet long-term financing needs. TurSEFF III will be used to finance many energy saving projects for SMEs in the country. With our SME-focused strategy and broad customer base throughout the country, Garanti Leasing has always been a reliable partner of SMEs and a well-known player in international markets. This financing facility is a sign of confidence that the lenders have placed in Garanti Leasing and in the Turkish economy.
The EBRD is a major investor in Turkey. Since 2009 it has invested €10 billion in various sectors of the Turkish economy, with almost all investments in the private sector. In 2017 alone, the Bank invested €1.6 billion in 51 projects in the country, half of which qualified under the Bank’s Green Economy Transition (GET) approach.