Turkey, Economy

Turkey warns investors: Pay speculations no heed

Economy Minister Nihat Zeybekci says business circles, investors should guard against baseless speculations on the economy

Dilara Zengin   | 26.10.2017
Turkey warns investors: Pay speculations no heed

Ankara

By Gokhan Kurtaran and Ugur Aslanhan

LONDON / ISTANBUL

Business circle and investors alike should guard against baseless speculations about the Turkish economy, Turkey's Economy Minister Nihat Zeybekci said on Thursday.

Zeybekci's comments followed a media report claiming that Germany is actively working to cut funds to Turkey from the German-owned KfW bank, European Investment Bank, and European Bank for Reconstruction and Development (EBRD).

"Institutions such as the EBRD have announced that the report is completely unfounded and that no such decision has been taken," Zeybekci said.

"Turkey paying the price for speculation is unacceptable."

Turkey has no problem in fulfilling its private and public sector short-term liabilities, and expects this to continue, Zeybekci added.

Answering Anadolu Agency's questions via email, the European Investment Bank (EIB) said that over the past 10 years it has provided over €2 billion (around $2.4 billion) a year in new loans for Turkish projects.

On the bank's history in Turkey, EIB spokesman Marco Santarelli said that it significantly increased its lending volume after 2005, when Turkey’s EU accession negotiations launched.

"Leading examples are construction of a rail tunnel under the Bosphorus, the high-speed train connection between Istanbul and Ankara, and the TERRA program of rebuilding after the 1999 earthquake and the improvement of earthquake protection," he explained.


- 3 pillars

Santarelli said the EIB's three main pillars of engagement in the country have been support for infrastructure projects, loans to banks for on-lending to small- and medium-sized enterprises (SMEs), and direct loans to businesses, especially in the fields of energy and research.

So far this year, the EIB signed six finance contracts for projects in Turkey with a total value of €507 million ($597 million).

"It is at present not possible to make a forecast for the whole of 2017, but it can be expected that the financing volume will turn out to be markedly lower than in previous years," Santarelli added.

Commenting on the report on Twitter, Deputy Prime Minister Mehmet Simsek, who is responsible for the economy, said he has recently met with the EBRD management.

"They noted that ~1.65 billion euros have been earmarked for their investments in Turkey in 2018," Simsek said.

Earlier, the EBRD said it remains committed to Turkey and continues to engage with the country.

"Turkey plays an extremely important role in the EBRD's operations," the bank told Anadolu Agency late Wednesday.


-Largest country of operation

The bank underlined that Turkey is its largest country of operation by annual investment volume and portfolio size.

"To date we have invested over €9.5 billion” or $11.2 billion, it said, adding that so far this year 30 projects worth almost €1 billion [$1.2 billion] have been signed.

"We expect to exceed €1.5 billion [$1.8 billion] in investment in 2017," it said.

The EBRD is a leading investor in Turkey, which was the biggest recipient of EBRD funds last year and has offices in Istanbul, Ankara, and Gaziantep.

The bank has invested in 240 projects in Turkey, with 97 percent in the private sector, including projects for infrastructure, sustainable energy, agribusiness, industry, and finance, according to the bank's website.


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