US$250 million from Clean Technology Fund expected to attract additional US$2.25 billion, with green light given in Istanbul for a second phase of CTF funding of US$140 million
ISTANBUL: November 7, 2012, The Turkish Minister of Energy and Natural Resources addressed the closing plenary of the Climate Investment Funds (CIF) 2012 Partnership Forum this afternoon in Istanbul, and celebrated the collaboration of the Government and private sector of Turkey, with the EBRD, World Bank and International Finance Corporation to boost investments in clean energy in the country. He said, “Partnering with the multilateral development banks through the CIF has contrıbuted to Turkey’s efforts to scale up investments in energy efficiency, renewable energy, and smart grids by empowering its own national private and banking sector. The fact that Turkey has been a first mover in achieving results on the ground has inspired investors and emboldened us to be even more ambitious not only in the scale of investments we seek to achieve but also in the types of renewable technologies we are considering. In Turkey, renewables are no longer tomorrow’s dream but today’s opportunity.”
Over the past decade, growing energy demand and concerns about the security of natural gas imports have pushed Turkey to rethink how its power is generated and consumed. Turkey’s national development plan supports investments to harness the country’s wealth of renewable energy resources. Turkey’s strategy is to increase the share of renewable energy to 30% of total energy production by 2023.
Benefiting from the Clean Technology Fund are Turkish companies. They can access finance for energy efficiency and renewable energy investments through the EBRD's Turkey Sustainable Energy Financing Facility, a US$ 285 million facility supported by US$ 50 million of CTF concessional co-financing. "We have invested over €2.5 billion in Turkey since starting operations in the country in 2009. Half of our investments promote the sustainable use of energy, " said Mike Davey, EBRD Director for Turkey.
Another program for Commercializing Sustainable Energy Finance is providing Turkish equipment manufacturer Toskar with financing through Yapi Kredi Leasing, Turkey’s leading leasing company, for equipment upgrades that cut the firm’s energy costs by 20% and boosted productivity by 50%. Aftab Ahmed, IFC Director for Financial Markets and Private Equity Funds in Europe, Central Asia, Middle East and North Africa said: "This project in the relatively new sector of energy efficiency financing in Turkey has the potential to set a role model and encourage other local financial institutions to develop lending programs for energy projects by small and medium enterprises. Energy efficiency investments and upgrades help the local companies to improve their competitiveness, as well as their technical and financial capacity, while addressing climate change through reduced energy consumption and emissions."
"We are very pleased with the CTF's support and endorsement of Turkey's efforts to scale up energy efficiency investments by penetrating the more challenging market segments such as SMEs, residential housing and municipalities" said Martin Raiser, Country Director of the World Bank in Turkey. "We will redouble our joint efforts to ensure that the additional USD 140 million in CTF funding help transform the market for financing of energy efficiency and frontier renewable energy technologies, because we believe that growing green is both necessary and makes good business sense."
The total CTF investments are expected to reduce 56.6 million tons of CO2 over 20 years, which will contribute significantly in achieving our objective of increasing the competitiveness of Turkish economy while contributing to mitigation of climate change.
The two-day Partnership Forum and associated meetings have brought together over 400 representatives of governments, civil society, indigenous peoples, the private sector, multilateral development banks and U.N. agencies to learn from each other about implementing their CIF programs, and to contribute to deepening global understanding of the linkages between climate change and development as they have been addressed within the CIF context.
CIF financing is channeled to countries through the public and private sector arms of the five multilateral development banks – the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank and the World Bank Group. A mix of grants, highly concessional and near-zero interest credits, and risk mitigation instruments from the CIF are expected to leverage over US$43 billion in co-financing.