WASHINGTON, March 27, 2013 - The World Bank’s Board of Executive Directors today approved a Small and Medium Enterprises Energy Efficiency Project for Turkey in the amount of US$ 201 million.
The main development objective of the Small and Medium Enterprises Energy Efficiency Project is to improve the efficiency of energy use in small and medium enterprises (SMEs), by scaling-up commercial bank lending for energy efficiency investments. The project will help reduce GHG emissions, and thus benefits from a grant from the Global Environment Facility (GEF).
The final Project beneficiaries will be small and medium enterprises (SMEs) and mid-cap companies that implement investments to improve the efficiency of their production, thereby lowering their operating costs and enhancing their competitiveness. The World Bank financing will be provided through the intermediation of financial institutions following a set of energy efficiency and financial viability criteria.
The Project consists of two components—one to support investment lending and project development, appraisal and monitoring for the three FIs; and a second policy and institutional development component for the General Directorate of Renewable Energy (GDRE) within the Ministry of Energy and Natural Resources.
"Turkey has significant potential to improve energy efficiency in the production sector. We are delighted to support the realization of this potential, thereby helping reduce emissions, improve competitiveness of SMEs, and lower energy import dependence,” said Martin Raiser, World Bank Country Director for Turkey.
The Project will provide three lines of credit for a total amount of US$201 million to three state-owned financial institutions: Halkbank (US$ 67 million), VakifBank (US$ 67 million), and Ziraat Bank (US$ 67 million) to support Energy Efficiency financing to SMEs; and a US$3.64 million Global Environment Facility (GEF) grant for technical assistance (TA) and risk sharing to the three financial institutions (Halkbank: US$ 0.9 million, VakifBank: US$ 0.9 million, Ziraat Bank: US$ 0.9 million), and policy and TA support to the General Directorate of Renewable Energy (GDRE) within the Ministry of Energy and Natural Resources (US$ 0.94 million).