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New EBRD financing to support energy efficiency projects in Turkey

By EBRD  Press Office

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The EBRD is continuing to promote energy efficiency and renewable energy projects in Turkey with a new financing package of €50 million provided to IsBank for on-lending to local private companies investing in mid-size sustainable energy projects.

The financing to IsBank is extended under the EBRD’s €700 million Mid-size Sustainable Energy Financing Facility (MidSEFF), which represents an important component of the EBRD’s support for Turkey’s long-term energy strategy. Launched in 2010 and subsequently extended in 2011, MidSEFF funding is being closely coordinated with the European Investment Bank (EIB).

The proposed EBRD funding is extended by acquiring investment-grade-rated senior bond or loan notes issued under IsBank’s existing Diversified Payment Rights (DPR) securitisation programme, an established market instrument used by Turkish banks to raise long-term funding in the capital markets.

The proceeds of the EBRD financing will be used to support the private sector for investments in renewable energy, industrial energy efficiency and waste-to-energy projects.

“Supporting sustainable energy projects is one of the EBRD’s key priorities in Turkey and we are pleased to join efforts with IsBank in order to increase financial intermediation for energy investments in Turkey. This cooperation will fill the current gap in sustainable energy financing mechanisms and will contribute to reducing the reliance on fossil fuels, bringing important environmental improvements,” said Noel Edison, Director for Insurance and Financial Services at the EBRD.

“DPR securitisation transactions have been an important source of medium and long term funding for Isbank. In this respect, we are glad to close another successful securitisation transaction and to find further grounds of cooperation with the EBRD through Isbank’s participation in MidSEFF. We are pleased to support Turkish economy and our clients’ energy efficiency projects via the funds obtained from the EBRD,”  said Erdal Aral, Deputy Chief Executive at Isbank.

In terms of asset size and total loans, IsBank is Turkey’s largest bank as of 31 March 2012, with over 1,200 domestic branches.

MidSEFF is supported by a comprehensive technical assistance programme to support the preparation and appraisal of sub-projects and the development of the voluntary carbon market in Turkey. The technical assistance support is funded by the European Union and the EBRD Shareholder Special Fund, in collaboration with the Turkish Treasury.

Since the beginning of its operations in Turkey in 2009, the EBRD has committed close to €2 billion in various sectors of the country’s economy, mobilising additional €5 billion in investments from other sources.

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