The European Bank for Reconstruction and Development (EBRD) is providing the US dollar equivalent of €100 million in financing to Türkiye Is Bankasi (Isbank), the largest private bank in Türkiye, for on-lending to private-sector clients for investments in the green economy and the digital transformation of small and medium-sized enterprises (SMEs) in the manufacturing sector.
The financing will consist of an investment in rated bonds issued under Isbank’s existing Diversified Payment Rights programme and include contributions from the EBRD’s Green Economy Financing Facility II (GEFF II) and Türkiye Digital Transformation Financing Facility.
The project will underpin Türkiye’s twin transformational goals by focusing on the green and digital advancement of the country’s private sector.
Addressing climate change remains a significant goal for Türkiye, which has set itself a 2053 net-zero target. To reach this emissions objective, Türkiye needs around US$ 10 billion in financing annually to 2030 in sectors such as energy, transportation, construction and industry.
The Türkiye GEFF II programme seeks to respond to those investment needs, building on the success of its initial run, which earmarked €500 million for green investments in the country.
In addition to providing support for sustainable investment, a portion of the financing will enable the country’s manufacturing SMEs to boost their digital capacity. Despite their significant contribution to production and sales, Turkish SMEs suffer from persistent shortfalls in access to financing, as well as a digital maturity level that lags that of its European Union and Organisation for Economic Co-operation and Development counterparts.
The EBRD’s Türkiye Digital Transformation Financing Facility, which was launched in May, aims to bolster the digital transformation investments of SMEs by providing financing resources for digital investments and solutions, fostering growth and innovation.
Isbank, Türkiye’s first national bank, is celebrating its centenary this year.
Francis Malige, Managing Director, Financial Institutions for the EBRD, said: “We are delighted to mark Isbank’s 100th anniversary with this signing. This strategic financing will play a crucial role in advancing the digital maturity of Turkish manufacturing SMEs and fuel investments in green projects, in line with our commitment to sustainable development and technological innovation in Türkiye.”
Isbank Deputy Chief Executive, Ms Ebru Ozsuca said: “Celebrating our centenary in 2024, we are once again honoured and proud to mark this important year with another successful transaction with EBRD. İşbank will continue to support the Turkish economy by way of meeting the financing needs of the green economy as well as SMEs’ digital transformation in Türkiye.”
The EBRD is one of Türkiye’s key investors, with €19.8 billion invested through 442 projects and trade finance limits since 2009, the majority of it in the private sector.
