WASHINGTON, July 24, 2014—The World Bank’s Board of Executive Directors today approved a Sustaining Shared Growth Development Policy Loan (SSG-DPL) for Turkey in the amount of Euro 367.40 million (US$500 million equivalent).
The DPL is grounded in the development goals of Turkey and is the first in a series of two Development Policy Loans. It aims to support Turkey’s goal of continued socially and environmentally sustainable growth, which is key to fostering shared prosperity in the country.
“Turkey’s growth record over the past decade has been inclusive, however, these gains are at risk in a less accommodating international environment,” said Martin Raiser, World Bank Country Director for Turkey. “With this DPL, the World Bank supports structural reforms that aim to ensure Turkey’s success in raising incomes, creating jobs, and building sustainable infrastructure continues.”
The DPL supports reforms in the areas of enhancing competitiveness and improving transparency; sustaining job creation and boosting female employment; increasing financial inclusion; and creating a regulatory framework to attract long-term, quality investment in the country’s infrastructure. Specifically, the policies, strategies, and reform actions supported under the SSG-DPL program target the following outcomes:
Pillar A: a reduction in informal employment, increases in the number of firms undergoing independent audits, new patent applications, corporate bond issuances, and an increase in the number of tax payers filing income tax;
Pillar B: increases in the female labor force participation rate, public and private credit bureau coverage, depositors in commercial banks, and in the leasing penetration rate, and the introduction of auto-enrollment into private pensions;
Pillar C: increased private sector investment in new electricity generation capacity, a decrease in the share in gas imports of the Petroleum Pipeline Corporation (BOTAS), the functioning of the Energy Markets Operation Corporation (EPIAS) as an independent company with equity participation by Borsa Istanbul and electricity and gas market participants, and the licensing of at least one private sector freight operator to operate on Turkish State Railways (TCDD) infrastructure.
The SSG-DPL is an IBRD Flexible Loan with an interest rate equal to 6 months EURIBOR term plus a variable spread, with a final maturity of 15.5 years, including an 8.5 year grace period.