Bank­ing on the fu­ture

Af­ter decade of op­er­a­tions in Tur­key, EBRD says its is ready for new in­vest­ments

Dünya Executive - - COVER PAGE -

The Euro­pean Bank for Re­con­struc­tion and De­vel­op­ment (EBRD), a ma­jor in­vestor in Tur­key that fo­cuses over­whelm­ingly on the pri­vate sec­tor, has un­veiled a new strat­egy for Tur­key which will guide the Bank’s in­vest­ments and pol­icy work in the coun­try for the next five years. In the pe­riod be­tween 2019 and 2024, the EBRD will fo­cus on strength­en­ing the re­silience of Tur­key’s fi­nan­cial sec­tor and de­vel­op­ment of cap­i­tal mar­kets, de­vel­op­ing the coun­try’s knowl­edge economy, pro­mot­ing eco­nomic in­clu­sion and gen­der equal­ity in the pri­vate sec­tor and ac­cel­er­at­ing the coun­try’s shift to the green economy and sup­port­ing re­gional en­ergy con­nec­tiv­ity.

Dur­ing a visit to Tur­key for the 10th year an­niver­sary of the Bank’s Tur­key branch, EBRD Pres­i­dent Suma Chakrabart­i said: “There are many ex­cit­ing new fron­tiers for the EBRD and the Turk­ish pri­vate sec­tor to explore to­gether. As a de­vel­op­ment bank with a proud record of in­no­va­tion, we are well placed to take a lead­ing role in this. The EBRD is not merely a fair-weather friend. We also look to the long term. To­day we are as com­mit­ted to Tur­key and sup­port­ing its pri­vate sec­tor as we have ever been.”

The Pres­i­dent’s visit and the launch of the new strat­egy mark 10 years of the EBRD’s solid con­tri­bu­tion to the Turk­ish economy. The EBRD started its work in Tur­key in early 2009 as a di­rect re­sponse to the coun­try’s in­vi­ta­tion, just as the global fi­nan­cial and eco­nomic crisis hit emerg­ing mar­kets hardest.

11.5 bil­lion eu­ros were in­vested for 300 pro­jects

Over the past decade, the Bank has been fo­cused on in­vest­ment in sustainabl­e en­ergy, im­prov­ing in­fra­struc­ture, strength­en­ing the com­pet­i­tive­ness of the pri­vate sec­tor, in­clud­ing small firms, as well as deep­en­ing lo­cal cap­i­tal and lo­cal cur­rency mar­kets, while pro­mot­ing greater job and train­ing op­por­tu­ni­ties for women, young peo­ple and peo­ple in re­mote ar­eas.

To date, the EBRD has in­vested 11.5 bil­lion eu­ros in 300 pro­jects and mo­bi­lized 2.3 bil­lion eu­ros from ex­ter­nal sources for these ventures. Half of the Bank’s in­vest­ments in Tur­key sup­port the “green” economy and pro­mote the sustainabl­e use of en­ergy and resources. An­nu­ally, they help save an equiv­a­lent of 11.3 mil­lion tons of CO2, an im­pact sim­i­lar to tak­ing 2.4 mil­lion pas­sen­ger cars off roads. The Bank has fi­nanced – di­rectly and via loans to Turk­ish part­ner banks – 3 GW of in­stalled re­new­able ca­pac­ity in wind, so­lar and geo­ther­mal pro­jects. This equals seven per cent of the to­tal in­stalled re­new­able ca­pac­ity across the coun­try.

Reach­ing 850 SMEs

To sup­port the growth of small and medium-sized en­ter­prises (SMEs) 2 bil­lion eu­ros of EBRD fi­nance was pro­vided, mostly by ex­tend­ing long-term funds to more than 20 fi­nan­cial in­sti­tu­tions in the coun­try: banks, leas­ing com­pa­nies and fac­tor­ing firms.

In ad­di­tion, the EBRD, with the help of donors such as the Euro­pean Union, Czechia, South Korea, Taipei China and the Repub­lic of Tur­key it­self, of­fered ad­vi­sory sup­port to 850 SMEs across the coun­try, helping them grow and cre­ate over 4,000 new jobs.

Twenty thou­sand women en­trepreneur­s re­ceived fi­nanc­ing, ad­vi­sory sup­port, train­ing and men­tor­ing through the Bank’s flag­ship Women in Busi­ness pro­gram supported by the EU and the Turk­ish Min­istry of Labour and So­cial Se­cu­rity.

Share­holder in 30 Turk­ish com­pa­nies

The Bank boosted al­most 30 Turk­ish com­pa­nies by be­com­ing a share­holder. It has also in­vested in nine Tur­key-fo­cused eq­uity and ven­ture cap­i­tal funds en­abling them to in­vest 1.1 bil­lion eu­ros in lo­cal firms. Sev­eral re­gional funds where the EBRD is a lim­ited part­ner have in­vested al­most 800 mil­lion eu­ros in eq­uity of Turk­ish busi­nesses.

The Bank has ex­tended fi­nance to some of the largest in­dus­trial com­pa­nies of Tur­key, rais­ing their en­vi­ron­men­tal and so­cial stan­dards, al­low­ing them to in­vest more in re­search and de­vel­op­ment and in the ex­plo­ration of new mar­kets, en­cour­ag­ing train­ing of young peo­ple and cre­at­ing more ca­reer op­por­tu­ni­ties for women.

Over 2.6 bil­lion eu­ros of EBRD fi­nance was de­voted to agri­cul­ture and all the steps re­quired to bring agri­cul­tural goods to mar­ket: pro­duc­tion, pro­cess­ing, pack­ag­ing and dis­tri­bu­tion. The Bank has also helped de­velop an in­no­va­tive tool for loan of­fi­cers in Turk­ish com­mer­cial banks, which has helped them ef­fi­ciently ap­prove and dis­burse 460,000 agri­cul­tural loans worth a to­tal of 2.6 bil­lion eu­ros.

Le­gal frame­work for PPP pro­jects

The EBRD has also played a key role in de­vel­op­ing Tur­key’s in­fra­struc­ture. It has helped de­sign a le­gal frame­work which al­lows for greater pri­vate sec­tor in­volve­ment in the in­fra­struc­ture, in­clud­ing pri­vate-pub­lic part­ner­ship schemes. The Bank has de­ployed this model to fi­nance the con­struc­tion of the Eura­sia tun­nel un­der the Bosphorus Strait and the con­struc­tion of state-of-the-art hospi­tals.

Eight EBRD-fi­nanced new health cam­puses across the coun­try will add a to­tal of 13,462 new hospi­tal beds to the Turk­ish health­care sys­tem, where the num­ber of beds per 1,000 peo­ple used to be only half the OECD av­er­age.

Fur­ther­more, 8 Turk­ish cities, in­clud­ing Is­tan­bul, Izmir, Gaziantep and Çanakkale, were able to im­prove their res­i­dents’ qual­ity of life thanks to new in­fra­struc­ture fi­nanced by the EBRD, in­clud­ing pub­lic trans­port, wa­ter ser­vices and waste man­age­ment.

Sup­port­ing a nascent bond mar­ket, the Bank has in­vested in 8 Turk­ish-lira de­nom­i­nated bonds is­sued by lo­cal com­pa­nies tap­ping cap­i­tal mar­kets for fi­nance. It has also sub­scribed to two in­fra­struc­ture project bonds and three cov­ered bonds backed by res­i­den­tial mort­gages and is­sued by lo­cal banks. Over the past 10 years, in its in­vestor role, the EBRD has fa­cil­i­tated five ini­tial pub­lic of­fer­ings by Turk­ish com­pa­nies, one of them on the London Stock Ex­change.

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