Green transformation support from the World Bank: $155 million loan for Turkish companies

The World Bank has provided a $155 million loan to support the green transformation of companies in Turkey and to increase capital financing. According to the World Bank's statement, the loan amounts will be provided through the Industrial Development Bank of Turkey (TSKB), and it was stated that TSKB will use these funds for the partial capitalization of the Turkey Green Fund. 

It was noted that the loan will be managed by the project's implementing agency in cooperation with Maxis Private Equity Portfolio Management Inc. (Maxis), one of Turkey's leading asset management companies.

According to a report by Bloomberg HT, it was stated that the total scale of the project is expected to reach $405 million, with the mobilization of $250 million in private capital at the fund level and the level of invested companies, in addition to the World Bank loan.

The project will also contribute to the development of the Private Equity sector through a green fund by encouraging companies' carbon reduction efforts and investments in green technology. It will support the diversification of the financial sector and increase companies' access to various long-term financing sources. Furthermore, it was stated that by aiming to reduce high corporate leverage ratios, it will support the acceleration of financing for green transformation and climate actions.

INVESTMENT IN GREEN TECHNOLOGIES

According to the World Bank's 2022 Country Climate and Development Report, it noted that companies in Turkey need to invest in green technologies to reduce carbon emissions, adapt to climate change, contribute to Turkey's green transformation, increase their growth potential, and create employment.

VITAL IMPORTANCE OF THE GREEN TRANSFORMATION PROCESS

In his statement regarding the approval of the loan, Lopez stated the following:

"Equity financing provides long-term risk capital and combines these funds with the transfer of expertise, another vital element for companies' green transformation process. Through the Turkey Green Fund, Turkey will also be able to benefit from the global trend where investors are in search of green investment opportunities."

PURPOSE OF THE PROJECT

World Bank Project Team Leaders Gunhild Berg and Etkin Özen said regarding the impact of the project, "The project will ultimately support the transition to a low-carbon and climate-resilient economy. By contributing to the financial sector, it will help its diversification and support the creation of long-term financing, capital markets, and employment by encouraging the development of local resources. The structure and capital market instruments that the project focuses on bring with them significant potential for attracting private capital and market creation."

News Source: 12punto