European Bank for Reconstruction and Development said on July 15 it secured financing for Garanti Bank AŞ and Yapı ve Kredi Bankası AŞ of USD 180 million (EUR 165 million). The funds will finance mid-sized renewable energy projects implemented by private sector companies, each ranging between EUR 10 million and EUR 40 million, the report on the bank’s website said. These include solar, hydropower, wind, geothermal, waste-to-energy and energy efficiency projects.
Financing is extended through an investment in A− rated senior bond notes under the banks’ Diversified Payment Rights (DPR) programmes, an established market instrument used by Turkish banks to raise long-term funding in the capital markets. EBRD’s funds are made available through the Turkey Mid-size Sustainable Energy Financing Facility (MidSEFF), a EUR 1 billion programme with the European Investment Bank. It is supported by a EUR 5 million grant from the European Union’s Instrument for Pre-Accession in close collaboration with the Turkish treasury. According to EBRD, this grant funding enables it to provide expert advice to its partner banks and to private sector companies seeking finance for their renewable energy and energy saving projects. MidSEFF has financed 42 projects through seven Turkish banks and has created over 700 MW in additional renewable capacity, the report said.
Sylvia Gansser-Potts, EBRD’s director for financial institutions in Turkey and southern and eastern Mediterranean, said: „Both banks have a strong track record of on-lending to private companies which invest in mid-sized renewable energy projects. Demand for renewable energy finance in Turkey remains high and both lenders have a strong pipeline for many successful investments in the sector.”
Almost half of the bank’s total portfolio in Turkey is in sustainable energy and since 2009 it has invested EUR 2.2 billion in almost 60 such projects. According to Nick Tesseyman, EBRD’s managing director of financial institutions, it found a good financial mechanism and good partnership with commercial banks in Turkey which works successfully. He told Anadolu Agency that through investments in renewables or clean energy in general, economic growth will be achieved, citing reducing costs and making households and companies more efficient. „We have been here already for eight years in Turkey, which is the biggest country for energy efficiency projects,“ he said.