GLASGOW, Scotland
The European Bank for Reconstruction and Development (EBRD) is committed to the continued success of the Turkish economy and the resilience of its private sector by continuing to offer green financing, the head of the bank said Monday.
Turkey is already the EBRD's largest country of operation by annual investment and portfolio, with more than €14 billion ($16 billion) cumulative investments since 2009. The majority, at 95%, is designated for the private sector and almost 50% is in support of the green agenda covering green financing and the low carbon economy, Odile Renaud-Basso said, at the start of her first in-person visit to Turkey.
"To date, the EBRD has provided €6.6 billion ($7,6 billion) in green financing through 175 projects, mostly in the private sector but also to Turkish cities and households, in support of greater sustainability and resource efficiency," she said told Anadolu Agency in an exclusive interview.
This year, the EBRD is likely to provide around €1.5 billion ($1,7 billion) in financing for the Turkish economy, roughly half of which is expected to be in green financing, Renaud-Basso said.
"I will reiterate the EBRD's commitment to Turkey, continued success of its economy and the resilience of its private sector. I will also emphasize the importance of stability, predictability and the rule of law for the development of the private sector and will call for the acceleration of the necessary reform measures to unlock more investment to the country," she said.
Later on her visit, she will announce details of the bank's doubling of finance for female entrepreneurs.
"Sustainability will be at the heart of my discussions," she said, as the EBRD finances low carbon transport in Ankara and Izmir, works on a €15 million ($17 million) loan for the acquisition of 100 compressed natural gas buses in Mersin along with a possible investment in a solar project by helping the city integrate solar power into electricity grids.
"I would like to seek views on what policies and measures could and should be adopted in support of the green agenda. It is with the right policies that we will be able to increase our own financing and attract more private investment from other sources to drive the green transition," she said.
Among the green financing offered to Turkey is a new landmark €150 million ($173,6 million) loan, a part of which is structured in line with the Green Loan Principles of the Loan Market Association. She said the loan is poised to be the first externally verified green loan in Turkish manufacturing.
€500 million green economy fund to be approved on Nov.24
Turkey's ratification of the Paris Agreement and its net zero commitment, both of which she regards as major steps, has paved the way for more private sector participation and more investment activity from the EBRD.
Turkey ratified the Paris Agreement on Oct. 6 and committed to reach net zero emissions by 2053.
The EBRD is prepared to help finance Turkey's green agenda and the board of directors is expected to approve €500 million in Green Economy Financing Facility (GEFF) for Turkey on Nov. 24.
The funds under the GEFF will be distributed to Turkish banks or leasing companies for private sector financing and to municipalities or households looking to invest in energy efficiency or small-scale renewable projects, Renaud-Basso said.
"We are now looking forward to Turkey's updated nationally determined contributions (NDCs) and to a long-term strategic action plan to meet these climate goals and transition toward a net-zero emission and more climate-resilient economy," she said, noting that the decarbonization in energy generation, transport and agriculture, as well as a bolder switch from fossil fuels to renewables are critical parts of the agenda.
Greater climate ambition from Turkey is already unlocking more climate investment opportunities, with the $3.1 billion climate fund from France, Germany, the World Bank and the UN to Turkey that has been announced last week.
Emerging economies face lack of bankable climate projects
Speaking on the negotiations at COP26, she acknowledged the importance of climate finance in fighting climate change in emerging countries given their lack of access to cheap finance.
"Working in emerging economies, we know that a major challenge for decarbonizing economies is a shortage of bankable climate projects. Lack of either an implicit or an explicit carbon price, supply chain disruptions, regulatory hurdles and inertia often delay accelerated deployment in these countries," she said.
With the bank's aim to be fully aligned with the goals of the Paris Agreement at the start of 2023 and its aim to have the majority of its investments supporting the green transition by 2025, she said it has launched an action plan to double the mobilization of the private sector to the green transition by 2025.
She stressed the need to wean the world off coal, the most polluting fossil fuel and the biggest contributor to climate change, to achieve globally agreed climate targets.
Although progress has been made, she urged for more ambitious NDCs at COP26 given that the NDCs that have been pledged to date are not enough to keep warming below 2 degrees Celsius.
"COP26 should become a momentum to trigger more ambitious NDCs," she said.
The COP26 summit is taking place in Glasgow, Scotland and runs until Nov.12.
