Strategy
Number of Active Projects | 20 |
Net IBRD Commitments | $6.408 Million |
Trust Fund Portfolio | $224.15 Million |
The partnership between Turkey and the World Bank Group (WBG) is outlined in the Country Partnership Framework (CPF), which was initially designed to cover the FY18–21 period but has recently been updated and extended to include FY22–23 through the Performance and Learning Review (PLR), that was discussed at the WBG’s Board of Directors on March 13, 2020.
The PLR confirmed that the CPF’s pillars of growth, inclusion, and sustainability remain valid and that most of the objectives set out under these pillars also remain relevant, although some amendments were incorporated into the program to reflect the changes in country circumstances, client demand, and the program’s evolution. Continued support from the International Bank for Reconstruction and Development (IBRD) was confirmed due to Turkey’s challenging economic context, which is leading to in decreasing rather than increasing income per capita in dollar terms.
The WBG program ensures continued alignment with the Government’s strategies, including the recently launched 11th National Development Plan (NDP, 2019–23) and the New Economic Program (2018–21) of Turkey. The Bank program continues to maintain a long-term focus that maximizes opportunities to support Turkey’s progression to higher-income status.
With the onset of the COVID-19 global crisis, the WBG program in Turkey for FY20–,21 has been adjusted to support the Government’s response. In line with the framework of the WBG Approach Paper “Saving Lives, Scaling-up Impact and Getting Back on Track” the Bank’s COVID-19 response spans the relief, restructuring, and resilient recovery continuum. The lending and analytical programs initially envisaged in the PLR have been complemented with new lending and Advisory Services and Analytics (ASAs) targeted to supporting the response to the pandemic.
The WBG will continue to deliver a mix of instruments from across its institutions, drawing on the strengths of the IBRD, International Finance Corporation (IFC), and Multilateral Investment Guarantee Agency (MIGA).
The implementation of the CPF to date has resulted in IBRD lending delivery totaling US$3.9 billion, including investment operations in energy, access to finance, municipal development, disaster risk resilience, and the water sector. The average annual IBRD lending delivery at $1.3 billion has been aligned with that envisaged in the CPF’s annual lending targets of between $1 and $1.5 billion.
IFC’s portfolio implementation continued to perform satisfactorily, and its committed portfolio as of September 2020 amounted to $4,281 million, the second largest worldwide and the largest in the Europe and Central Asia region. Since May 2020, Turkey has received several investments under the IFC COVID-19 crisis response facilities. IFC invested $989 million in Turkey in long-term finance (LTF), of which $523 million was of its own account and $466 million was mobilized from other investors. This is higher than the indicative targets for IFC in the CPF.
MIGA’s guarantee gross exposure in Turkey has grown substantially in the past decade from $458 million in FY13 to $1.695 billion in FY16. It currently stands at $2.77 billion (FY20), making Turkey the largest exposure country in MIGA’s portfolio, with 12 percent of total gross exposure. MIGA’s intervention has mobilized foreign private financing in support of strategic areas, such as the health public-private partnerships, financial sector and export markets, and infrastructure sectors, via municipal financing. The product mix includes traditional political risk insurance as well as the non-honoring of credit guarantees. Going forward, MIGA will continue to remain selective to optimize development opportunities for private sector mobilization, while ensuring close coordination with the Bank and IFC within the context of the WBG CPF.
Key Engagement
Supporting the Government’s response to COVID-19 has taken center stage in the WBG program along the four lines of the WBG’s global approach:
To save lives: In the fourth quarter of FY20, the Bank added a $100 million to the CPF/PLR program for the Turkey Emergency COVID-19 Health Project (P173988) from the Fast-Track Facility as the key component of the relief phase of the COVID response. In parallel, it restructured US$134 million in ongoing Health System Strengthening and Support (P152799) to provide additional support for urgent health needs.
To protect the poor and vulnerable: Also in the fourth quarter, the Bank added a US$160 million Safer Schooling and Distance Education Project (P173997), which supports equitable access to distance learning and protects human capital. The Digital Education platform that will be strengthened and scaled up under the project will contribute to a restructured and more resilient digital education system for post-COVID-19 blended (face-to-face and online) teaching and learning.
To save livelihoods, preserve jobs, and ensure more sustainable business growth and job creation: As part of the resilient recovery phase, the Bank is adding two new operations to the program in FY21. The first is the recently approved Emergency Firm Support Project ($500 million, P174112), and the second is the proposed Rapid Support for Micro and Small Enterprises during COVID-19 Project ($300 million, P174144) implemented by the small and medium-sized enterprise (SME) support agency of the Ministry of Industry and Technology and targeted at smaller MSMEs. These new operations aim to preserve jobs.
A further operation, the Long-Term Export Finance Guarantee Project ($300 million, P156252, approved in the fourth quarter of FY20), which was envisaged in the CPF/PLR and was under preparation before COVID, has been adapted to enhance the ability of Turkey’s Eximbank to raise funds on capital markets to support viable exporting firms affected by the COVID-induced trade slowdown. Finally, the implementation of the ongoing Inclusive Access to Finance has been accelerated to leverage its focus on women-inclusive firms and firms operating in lagging regions in the COVID-19 context.
To strengthen policies, institutions, and investments for resilient, inclusive, and sustainable growth: The portfolio of core and extended core ASAs envisaged in the PLR will focus on strengthening policies, institutions. and investments for resilient and sustainable recovery. Special attention is being paid to timely preparation of the Pandemic Preparedness ASA. Moreover, when preparing the operations that had been envisaged in the PLR’s pre-COVID pipeline for FY21, a strong emphasis will be put on strengthening sectoral policies and institutions to support a “building back better” approach. These operations include the Geothermal Development Project Additional Finance (P172827), Resilient Landscape Integration Project (P172562), Organized Industrial Zones Project (P171645), Urban Resilience Project (P173025), and Scaling-Up Rooftop Solar PV Project (P172854).
Another key engagement involves supporting the Government’s response to the 3.6 million Syrian refugees living in Turkey. The WBG is partnering with the EU’s Facility for Refugees in Turkey (FRiT) and is implementing programs in the areas of social support and adaptation, labor markets and the economy, municipal services and education, as well as in the cross- cutting areas of data collection, measurement, and monitoring.
In addition to the FRiT funds, the portfolio is also supported by a broad set of Trust Funds, most notably, the Clean Technology Fund (CTF), EU Instrument for Pre-Accession Assistance (IPA) funds, Global Environmental Facility (GEF) funds, and Swedish International Development Cooperation Agency (SIDA) Gender Funds.
Last Updated: Oct 19, 2020