EBRD to launch third TurSEFF line for small projects

A framework operation of EUR 400 million for on-lending to several financial institutions in Turkey is considered by the European Bank for Reconstruction and Development. TurSEFF 3 will be used to finance private and public sector subborrowers investing in small scale renewable energy and resource efficiency projects, according to the announcement. It will be the third phase of the framework and it builds on the successful implementation of the first two phases, the bank said. Operations will be expanded to Northern Cyprus, where they will have a different name and focus entirely on financing of small and medium-sized enterprises (SMEs) and not extend financing to public sector sub-borrowers, the document adds. The target date for board approval is July 6.

Since the launch of TurSEFF in 2010, EBRD has provided over EUR 400 million in loans to more than 800 subprojects. The objective was to create a market for energy efficiency and renewable energy financing. TurSEFF 3 builds aims to increase financial intermediation for resource efficiency and renewable energy investments, to include public sector investments as well as leasing companies, and to improve the financial insitutions’ skills in recognising and assessing a wider range of sustainable energy projects, the bank stated.

“Targeting the public sector in Turkey for the first time through a credit line and extending financing to leasing companies is expected to facilitate financing in areas previously not covered by TurSEFF or a similar facility in Turkey. The project will generate transition impact by demonstrating the benefits of energy conservation and promoting the expansion of resource efficiency investments in the energy intensive Turkish economy among Turkish SMEs while providing financing and technical assistance for implementing such projects,” the project summary document said.

TurSEFF 3 builds aims to increase financial intermediation for resource efficiency and renewable energy investments, to include public sector investments as well as leasing companies, and to improve the financial insitutions’ skills in recognising and assessing a wider range of sustainable energy projects.

The framework will facilitate comprehensive investments in sustainable energy and resource efficiency, thus catalyzing an increase in the power generated from renewable sources, reducing fossil fuel imports as well as the overall greenhouse gas emissions in Turkey, according to the plan. The project is also expected to transfer and build expertise, among both participating financial institutions and companies, related to resource efficiency and renewable energy investments.

Target clients for TurSEFF 3 are commercial banks and leasing companies with extensive outreach into the SME segment operating in the industrial and municipal sector. The framework will be supported by a technical cooperation programme funded by the European Union under the actions entitled ‘Enhancement of Turkish Energy Sector in line with EU Energy Strategies’ and, subject to donor approval, ‘Private Sector Support Facility for Turkey’. Additionally, a technical cooperation package for the implementation of the programme in Northern Cyprus will be funded by ‘EU SME Competitiveness Integrated Finance Facility in the Turkish Cypriot Community’.