Turkey Agribusiness SME Financing Facility (TurAFF)

Location:

Turkey

Project number:

42211

Business sector:

Depository Credit (banks)

Notice type:

Private

Environmental category:

FI

Target board date:

29 Sep 2011

Status:

Board approved

PSD disclosed:

25 Aug 2011

Translated version of this PSD: Turkish

Project Description

The EBRD is considering launching a framework operation valued at up to €400 million under which the Bank will provide funding to at least four commercial banks in Turkey for on-lending to private sector small and medium-sized enterprises (SMEs) operating in the agribusiness sector (TurAFF).

This TurAFF framework operation will include €200 million senior loans and €200 million co-financing where EBRD will take direct risk participation in selected SME sub-projects.

The purpose of the TurAFF is to enable the banks to expand access to medium to long-term finance avaialble to sucessful SMEs operation in the agribusiness sector in Turkey. The EBRD’s financing will also assist the banks in focussing on this priority sector and diversifying and lengthening their funding base.

Transition Impact

The Facility will provide term funding to support the banks’ lending to small and medium-size enterprises (SMEs) operating in the agribusiness sector, particularly in underserved regions. Through its co-investment process, EBRD will work with the banks to further improve underwriting and monitoring processes. Together these efforts will increase the availability of term finance to SME agribusinesses, and develop the skills within the private banking sector to assess agriculture and agribusiness risk and to provide value chain financing. This will support banks in their plans to prioritise the agribusiness sector and expand its lending to SMEs in the sector beyond this Facility.

The Client

Clients of the facility will be commercial banks in Turkey. It is planned that clients will be selected from leading commercial banks on the basis of their geographic outreach and the institutional capacity and commitment to expand SME financing in the agribusiness sector.

EBRD Finance

Up to €200 million in senior loans.

Up to €200 million in co-financing where EBRD will take direct risk participation in selected SME sub-projects.

Project Cost

Up to €400 million.

Environmental Impact

Categorised FI (2008). All Participating Banks (PBs) will be required to comply with the EBRD's Performance Requirements for FIs (specifically, PR2 and 9) and adhere to the EBRD's Environmental and Social Exclusion and Referral Lists and submit Annual Environmental and Social Reports to the EBRD. All PBs will be required to implement EBRD's Environmental and Social Procedures for Small and Micro Loans as outlined in the e-manual.

Technical Cooperation

PBs under TurAFF are envisaged to receive technical assistance to help them strenghen their institutional capacities to expand SME financing to new areas and develop new products for target groups, particularly in under-banked regions of the country. Funding for the technical assistance component is being sought from bi-lateral donors.

Company Contact

Pak Oksana
E-mail: pako@ebrd.com

Nadia Petkova
E-mail: petkovan@ebrd.com

Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

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