ANKARA, March 17, 2011— The World Bank today approved an Additional Financing in the amount of US$300 million for Turkey’s Export Finance Intermediation Loan (EFIL 4) project. The loan will provide long-term working capital and investment finance to Turkish exporters, to help them expand capacity and improve competitiveness. The project also aims to continue developing the capacity of banks and leasing companies as financial intermediaries to provide credit to firms.
“The performance of Turkish firms and banks will continue improving. I see strong potential for further export development, and I expect that growing financial markets will play an increasingly important role in funding export and private sector growth,” said Ulrich Zachau, World Bank Country Director for Turkey. “Financing for Turkish firms under the EFIL 4 additional financing project will help them compete in international markets and increase production and exports. This will bring more and better jobs for Turkish workers and higher incomes for Turkish families.”
The loan will be to the Turkish Industrial Development Bank-Turkiye Sinai ve Kalkinma Bankasi (TSKB), with a government guarantee. This new financing follows four earlier export finance intermediation loans from the World Bank to Turkish banks and leasing companies for a total amount exceeding US$ 1 billion, benefitting about 500 Turkish companies since 1999. TSKB will on-lend the funds to participating banks and leasing institutions, which in turn will on-lend to eligible private exporters.
The loan will be guaranteed by the Republic of Turkey. It will be a variable spread loan repayable in 28 years, including a grace period of 7 years.