€1.6 billion investment – overwhelmingly in private sector; almost a third in Turkish lira
The European Bank for Reconstruction and Development (EBRD) delivered strong support for Turkey in 2017 with a combination of a powerful investment programme and the backing of crucial sector policies to modernise the country’s economy and build up its resilience.
A strong level of investment is set to continue in 2018 under the leadership of the new EBRD Managing Director for Turkey, Arvid Tuerkner. As of this year, Turkey will not only be a shareholder and destination of EBRD finance but also a donor to EBRD-led projects, with the creation of the EBRD-Turkey donor fund. This means that the Turkish government will co-finance socially important projects which will be executed according to EBRD standards and requirements.
In 2017 the EBRD invested €1.6 billion in Turkey in a record number of 51 projects. Since the Bank started operations in Turkey in 2009, it has invested €10 billion across various sectors of the Turkish economy. Turkey is now the EBRD’s largest country of operations by annual investment volume and by our portfolio of investments of over €7 billion. Nearly all investments (97 per cent) support private companies. The EBRD has offices in Istanbul and Ankara, and invests across the whole of Turkey, either directly or in partnership with Turkish banks.
The President of the EBRD, Sir Suma Chakrabarti, announced the Bank’s results during a visit to Turkey. He said: “Turkey is a country with an extremely strong basis and culture of entrepreneurship and a thriving private sector. We are here to strengthen these foundations of the country’s economy and we will continue to put an emphasis on green investments, innovation, capital markets and training and employment to women, youth and those in remote areas.”
In Turkey, the EBRD’s priorities, as defined by the country strategy adopted at the end of 2015, are: sustainable energy; private sector competitiveness; infrastructure; regional, youth and gender inclusion; and local capital markets. The EBRD made notable investments in all of these areas in 2017.
- Sustainable energy: in 2017, half of all EBRD projects in Turkey supported a more efficient use of energy and other resources, as well as renewable energy. Examples include a geothermal power plant, resource-efficient hospitals under a public-private partnership model, higher efficiency standards in residential properties including student housing, and providing finance in partnership with local banks to SMEs, municipalities and households for efficiency improvements.
- Competitiveness: strong private enterprises make the entire economy more competititve, and 50 out of the record 51 EBRD projects in Turkey in 2017 were in the private sector. We supported new foreign direct investment by multinational companies like Siemens and Savola.
- Infrastructure: in our only public sector project in 2017, we supported the expansion of the metro in Istanbul, one of the most congested cities in the world.
- Inclusion: the Bank’s popular Women in Business programme reached a milestone in 2017, providing finance and business advice to 15,000 companies led or owned by women in 79 out of the 81 Turkish provinces. The programme is supported by donor funds from the European Union and Turkey itself. The EBRD also works with companies large and small – from Ford Otosan to honey maker Balparmak – to offer on-the-job learning and employment for youth, women and people in remote areas.
- Capital markets: the Bank invested in several Turkish lira-denominated corporate bonds in order to deepen capital markets in the country. These include issuances by energy companies Enerjisa and Osmangazi and conglomerates YDA and Doğuş. Almost a third of EBRD projects involve Turkish lira financing, which is particularly important to companies as currency volatility remains high.