Turk Eximbank secures USD1.1B financing deal for green transformation investments
Date
5/29/2024 8:36:45 AM
(MENAFN) Turk Eximbank, Turkey’s export credit bank, has finalized a significant financing agreement amounting to €1 billion (USD1.1 billion) under the guarantee of the World bank to bolster green transformation initiatives. This financing, known as the "Türkiye Green Export Project," marks a strategic collaboration aimed at supporting environmentally sustainable investments in the country.
The loan agreement, signed on May 7, involves a €1 billion facility under the counter-guarantee of the Treasury and Finance Ministry of Turkey, supplemented by a first-loss guarantee of €600 million provided by the International Bank for Reconstruction and Development (IBRD), a member of the World Bank Group. Notably, this agreement represents Turk Eximbank's largest borrowing transaction to date and signifies the inaugural utilization of IBRD guarantee mechanisms to facilitate exporters' transition towards environmentally friendly practices.
Facilitated in partnership with renowned financial institutions including Deutsche Bank, Standard Chartered Bank, BNP Paribas, and ING Bank, the 10-year financing facility is poised to support Turkey’s exporters in navigating the evolving landscape shaped by environmental regulations such as the EU's Carbon Border Adjustment Mechanism (CBAM). Scheduled for implementation from 2026, CBAM aims to address carbon-intensive production sectors, with further expansions anticipated in subsequent phases, alongside the imposition of carbon taxes in various export markets.
The Turkey Green Export Project is strategically designed to provide financing for exporters' initiatives in renewable energy production, energy efficiency enhancements, and addressing working capital needs. Furthermore, the facility underscores a commitment to promoting gender inclusivity and supporting Small and Medium Enterprises (SMEs), reflecting a comprehensive approach towards fostering sustainable economic growth and resilience.
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