Turkey: EUR 718 million for transport, energy and the environment

The European Investment Bank is providing today a EUR 718 million strong support for rail transport, electricity distribution as well as energy efficiency and renewable energy in Turkey.  The support is in the form of different lending facilities, with the Undersecretariat of Treasury in favour of the Turkish State Railways (TCDD), with the Turkish Electricity Distribution Corporation (TEDAS), and with the main Turkish development banks Türkiye Sinai Kalkınma Bankası (TSKB) and Türkiye Kalkınma Bankası (TKB).

The contracts were signed by EIB Vice-President Mr Matthias Kollatz-Ahnen, Undersecretary of Treasury Mr İbrahim H. Çanakcı, TEDAS Chairman and General Manager Mr. Haşim Keklik, TSKB Member of the Board of Directors and CEO Mr. Halil Eroğlu and TKB Chairman and CEO Mr Abdullah Çelik.

On this occasion, EIB Vice-President Matthias Kollatz-Ahnen commented: “Efficient infrastructure in transport, energy and environment is key to the development and prosperity of Turkey and its accession process to the European Union.  As the European Union’s bank, we are keen to reconfirm our large, swift and strong support to Turkey, which remains the largest recipient country of EIB financing outside the EU.  Support for the country’s small and medium-sized enterprises (SMEs) has been prioritised in this year of global economic crisis. Today, we are however re-confirming the much broader depth and width of our relationship with Turkey through additional financing of some EUR 720 million in support of the country’s key infrastructure priorities and Turkish’ efforts to develop its significant renewable energy potential as well as the Government’s initiatives to favour investments in energy efficiency. With our financial means and expertise, as the largest multilateral financing institution and with a physical presence in Turkey, the Bank is making a tangible contribution to these priority sectors”.

Mr İbrahim H. Çanakcı, Undersecretary of Treasury commented: “Turkey and European Investment Bank relations have a long history since the mid 1960s. EIB has always been a leading international partner of our country and supported our social and economic development in every means. The extension of a hefty amount of loans to finance our major infrastructure projects in public sector and the funds provided for our local banks in mobilizing resources to Turkish real economy in order to support export finance, renewable energy and energy efficiency programs since 1965 are clear evidences of this support. The Bank provided financing not only for the infrastructure, transportation, energy and education projects, but also provided financing for the innovation build-up and scientific activities in Turkey in line with the Lisbon strategy. I would like to express my satisfaction on the progressed collaboration between our institutions and take this opportunity to thank EIB for its fruitful cooperation. I strongly believe that our long-standing mutual co-operation will further improve with new projects in the coming years”.

EUR 293 million in favour of the Turkish State Railways – TCDD is further strong support for the country’s main transport corridor between Ankara and Istanbul. The additional funding brings the total EIB support for the project to EUR 850 million. 

This flagship project was first financed by the EIB in 2006.  It aims at building the country's first high speed railway between the country’s two largest cities. The project will lead to significant time gains for travelers along the corridor and will assist economic development, quality of life as well as generating significant environmental benefits. The project constitutes a key element of the Government’s plans to increase the share of rail transport by improving productivity and effectiveness of railway operations.  In addition, the project is strongly supportive of key strategic objectives of EU policy and is a continuation of the Pan-European Corridor IV.  It will interconnect with the Marmaray Bosphorus Tunnel Project enabling the passage of high-speed trains across the two continents.

EUR 125 million to Turkish Electricity Distribution Corporation (TEDAŞ) is for the expansion and upgrading of existing electricity networks in order to improve efficiency and reliability of the electricity distribution. The Turkish electricity distribution sector is in need of considerable investments to cope with the significant growth in electricity consumption resulting from the country’s sustained economic growth over the last decade, the growth in population and its increased urbanization and standards of living.

EUR 300 million to Türkiye Sinai Kalkınma Bankası (TSKB) and Türkiye Kalkınma Bankası (TKB) is in the form of a Framework Loan in favour of  small to medium-sized investments in renewable energy, energy efficiency and pollution abatement. The Framework Loan is to support investments in Turkey that generate significant environmental benefits, fully in line with EU priorities. Both TSKB and TKB are long-standing partner banks of EIB in Turkey. Through numerous previous funding arrangements, they have proven to be well placed to on-lend EIB funds for the benefit of eligible investments.

The investment schemes will contribute to combating climate change through a reduction in the emission of greenhouse gases and to substitute more carbon-intensive energy sources.  Other schemes will focus on industrial pollution abatement, thus generating environmental benefits through improved quality of air, water and land resources.

Note to editors:

EIB activity in Turkey

The EIB, as the European Union’s Bank is the long-standing, financial partner of Turkey (with over 40 years of operations) offering broad experience with public and private investments in all key sectors. The EIB has made a significant contribution to Turkey’s economy and to the country’s EU pre-accession process through emblematic infrastructure projects such as the Bosporus bridge and tunnel,  the Istanbul Metro including the light rail systems in Antalya, Samsun and Bursa, and key private sector industrial projects.

Prioritising needs in the face of the financial and economic crisis, the EIB targeted large, swift and efficient support to small and medium-sized enterprises (“SMEs”) which are particularly vulnerable and important for employment and real economy stabilisation in these difficult times.  In cooperation with an extensive network of some 12 Turkish local partner banks, the EIB improves the availability and accessibility of long-term funding in favour of SMEs. The total volume of the Bank’s SME lending in Turkey amounts to EUR 850 million and EUR 1,3bn in 2008 and 2009 respectively.

In 2008, the EIB provided a total lending of EUR 2.7 billion for projects across all of the country’s key economic sectors.  As a result, in 2008 Turkey ranked first among recipient countries outside the EU, attracting a total lending volume of EUR 8.3 billion from 2004-2008.

With the aim of maximising the benefits of EIB lending to Turkey and its people, the EIB will continue providing its support to the country in the coming years, with priority to the following sectors: infrastructure (both at the national and local level), transport, SMEs, the environment and energy, including energy efficiency and renewable energy.