The World Bank Turkey Program Closed 2020 with Solid Investments

In 2020, the World Bank delivered record levels of support for Turkey with financing extended to nine critical development projects that totaled US$ 2.5 Billion. This financial support, coupled with a series of Knowledge Products, contribute to the implementation of Turkey’s 11^th National Development Plan, as laid out in the World Bank Group’s Country Partnership Framework (FY17-23).With the new lending approvals in 2020, the active lending portfolio in Turkey reached US$ 6.7 billion in support of 21 projects.

Supporting Turkey’s Response to the COVID-19 crisis

Due to the unexpected COVID-19 pandemic in 2020 and the urgency of addressing the huge impacts of this crisis, the World Bank Group responded at a global level by putting together one of the largest sources of funding and knowledge to support developing countries to take broad and fast action in their pandemic response. It has made available $160 billion to help countries strengthen public health interventions, protect the poor and vulnerable, support businesses, and bolster economic recovery.   

In Turkey, the Bank applied a rapid, flexible and strategic approach to support Turkey's emergency response. Five development projects were prepared rapidly during 2020 to help address different aspects of the crisis:

On April 24^th, 2020, the Bank approved a $100 million project for an Emergency COVID-19 Health Operation, to be implemented by the Ministry of Health in support of Turkey’s actions to respond to the health impacts of COVID-19. The project was part of the World Bank’s $14 billion global Fast Track Facility geared specifically towards health sector support announced on April 2^nd.  The funding will strengthen Turkey’s capacity to avert the potentially high health and human cost of the COVID-19 pandemic by reinforcing mitigation and disease management. With the actions supported by this project the Bank hopes to contribute to saving lives.

On June 12^th, 2020, the Bank approved a $273 million Long-Term Export Finance Guarantee Project to be implemented by Eximbank of Turkey which aims  to improve access to longer-term finance for Export Oriented Small and Medium Enterprises and Export Oriented Mid-Cap Enterprises with the objective to preserve the export capacity of Turkey`s firms that have severely been affected by the crisis. The Project’s innovative design is consistent with IBRD’s strategy to crowd in the private sector financing with the help of the IBRD guarantee, the first-ever in Turkey, and to transition from traditional credit lines to more market-based, leveraged instruments to support financial intermediation.

On June 25^th, 2020, the Bank approved a $160 million Safe Schooling And Distance Education Project to be implemented by the Ministry of Education to enhance the capacity of the education system to provide e-learning equitably to school-age children during and following the COVID-19 pandemic and future shocks.

On Auguste 28^th, 2020, the Bank approved a $500 million Turkey Emergency Firm Support Project aimed at ensuring access to finance for private Small and Medium Enterprises (SMEs) affected by - or adapting to - the economic impacts of COVID-19. The project will be implemented through financial support provided to VakifBank and TKYB.

On December 18th, 2020, the Bank approved a $300 million Rapid Support for Micro and Small Enterprises during the COVID-19 crisis Project, to be implemented by KOSGEB, aimed at averting the closure of viable micro and small enterprises (MSEs) affected by the crisis and maintain their employment levels. The project supports Turkish people and firms by providing reimbursable support financing for manufacturing firms and other innovative young firms focusing on manufacturing, scientific research and development, and computer programming.

Contributing to Turkey’s Build Back Better Efforts and Longer-Term Goals

In addition to these emergency COVID-19 operations , and in line with its Country Partnership Framework (CPF), the World Bank’s regular program of support continued to focus on more equitable and sustainable growth with a renewed focus on ensuring Turkey can build back better after the crisis.

The program covers many areas of support to government and stakeholders in Turkey to address challenges in fiscal management, the financial sector, competitiveness, and private investment, through increased fiscal space, enhanced access to finance for underserved segments, and enhanced competitiveness and employment in selected industries. The emphasis on stronger macro-economic and fiscal management has become more important given the economic volatility experienced by Turkey in the past couple of years.

The focus in the Bank’s program on strengthening inclusion by reaching citizens who are left behind was targeted at increasing the effectiveness of social assistance, increasing labor force participation of women and vulnerable groups, and strengthening performance of the education and health sectors.

As part of this, the Bank also helped Government efforts in managing the refugee crisis which has brought challenges of inclusion and integration for this new population, which have only been exacerbated by the COVID-19 pandemic and require stronger efforts to protect those most at risk, including women.

As part of the program of support to regions hosting refugees, the Bank continued to implement and prepare new projects that benefit from EU FRIT financing.  The Bank provided financing in parallel to FRIT funds, in support of the following projects:  

On March 31^st, 2020, the Bank approved a $ 345 million Formal Employment Creation for Refugees and Turkish Citizens Project, to be implemented by TKYB, aimed at enhancing the conditions for formal job creation by firms operating in provinces with high incidence of refugees, for the benefit of refugees and host-community members.

On March 31^st, 2020, the Bank approved a $148.82 million Municipal Services Improvement Project, to be implemented by Iller Bank, aimed at improving host and refugee communities access to safely managed water supply, sanitation and solid waste services in selected municipalities affected by the influx of refugees.

The Bank also provided support to Turkey in its goal of reorienting growth towards a greener, more resilient and sustainable pattern, through improved reliability of energy supply and generation of green energy, improved sustainability and resilience of cities, and increased sustainability of infrastructure assets and natural capital. As part of the Bank’s program on sustainability, the following projects aimed to support Turkey’s commitment to scale up its action on addressing the negative impacts of climate change:  

On February 28^th, 2020, the Bank approved a $325 million Renewable Energy Integration Project Additional Financing to help Turkey meet its increased power demand by strengthening the transmission system and facilitating integration of large-scale renewable energy (RE) generation. The project is being implemented by TEIAS.

On June 30^th, 2020, the bank approved a $350 million Rail Logistics Improvement Project to be implemented by the Ministry of Transport. This project supports delivery of last-mile rail and multimodal connectivity infrastructure at well-prioritized nodes of Turkey’s national railway network which will help revitalize the transport and logistics sector.

Sharing Knowledge and Analytical Work to Inform Policy and Program Design

Knowledge Products: Complementing its investments, the World Bank Program also boosted policy engagement in 2020.  The Bank has regularly delivered knowledge work that has informed Government policy and programs, facilitated the preparation of many WBG-funded projects, and underpinned investments from other development partners. Through assessment of the economy and policy recommendations, the Bank provided a space for constructive exchange of views at both technical and high-level dialogue.

The Bank’s analytical and advisory work covered the following topics in 2020: Water Security Issues and Outlook; Scaling Up Rooftop Solar PV; Inequality, Poverty and Policy; Evaluation of Employment Subsidy Schemes; Toward a More Resilient, Inclusive and Diversified Financial Sector; Development Finance for Climate Actions; Enhancing the Impact of the Turkish Court of Accounts on Good Public Governance; Review of National Planning, Policy Formulation and Public Financial Management Institutions and Performance.

The comprehensive program of the World Bank is being implemented through multiple Turkish stakeholders – government, state owned institutions, public banks, development banks and municipalities.

Looking forward to the year 2021, Country Director of World Bank Turkey Auguste Tano Kouame stated: “Going forward with its long-standing partnership with the Country, the World Bank will continue in 2021 to contribute to mobilize financing, knowledge, and global experience help Turkey to strengthen the institutions needed to sustain social and economic progress.”