AIIB Signs USD200-M On-Lending Facility to Boost Türkiye’s Climate Mitigation and Adaptation Efforts – EQ Mag
The Asian Infrastructure Investment Bank (AIIB) and the Industrial Development Bank of Türkiye (Türkiye Sınai Kalkınma Bankası A.Ş. or TSKB) have signed a USD200-million on-lending facility to contribute to the Republic of Türkiye’s climate mitigation and adaptation goals in line with the Paris Agreement. The facility is backed by a guarantee from the Government of Türkiye. This is the third loan AIIB has extended to TSKB, with the first loan having been approved by AIIB’s Board of Directors in 2018.
Gregory Liu, AIIB Acting Director General, Infrastructure Investment Department (Region 2), and TSKB Executive Vice President Meral Murathan, attended the virtual signing of AIIB’s commitment to the TSKB Sustainable Energy and Infrastructure On-lending Facility Phase 2. The loan was signed following Türkiye’s recent declaration of enhanced commitment to further reduce greenhouse gas (GHG) emissions by 41 percent below business-as-usual levels by 2030, raising the target from 21 percent, as announced on the sidelines of the COP27 climate summit in November.
The project aims to provide liquidity and long-term capital for eligible private sector subborrowers by financing eligible subprojects in renewable energy generation and energy efficiency improvements for networks, industries and buildings, which will contribute to climate mitigation by reducing GHG emissions and creating energy savings. The project will also support climate adaptation investments and the development of emerging climate-related industries. The project is expected to support Türkiye in meeting its commitments under the Paris Agreement as outlined in its Nationally Determined Contributions.
“The project is guided by AIIB’s Energy Sector Strategy and is aligned with AIIB’s four thematic priorities to finance Infrastructure for Tomorrow,” said AIIB Vice President for Investment Operations (Region 2), Konstantin Limitovskiy. “It is the continuation of a successful collaboration between AIIB and TKSB that began in 2018 with the launch of the Sustainable Energy and Infrastructure On-lending Facility Phase 1 project. AIIB has set ambitious climate targets to achieve at least 50 percent of approved financing to focus on climate solutions, and we are committed to supporting our members, including Türkiye, to achieve their respective green targets and ultimately contribute to the global climate agenda.”
“In 2018, we signed the first loan agreement with the Asian Infrastructure Investment Bank which was AIIB’s first financial intermediary (FI) loan to a bank globally,” said TSKB Chief Executive Officer, Murat Bilgiç. “Thanks to this project, we financed renewable energy projects with a total installed capacity of 479.6 MW. With this new agreement, we are moving into the second phase of our long-standing relationship with the AIIB. With this USD 200 million fund, we will provide financing for climate investments to support Türkiye’s roadmap to mitigate and adapt to climate risks in alignment with the Paris Agreement. Through these financings, we will focus on projects that mitigate and adapt to the impacts of climate change. In this way, we will support the transition of our country’s manufacturing sector to a low-carbon economy. We believe that this important agreement is a sign of the trust in our bank and our country, and we are delighted to strengthen our cooperation with the AIIB. While climate risks shape our future, as a bank whose loan portfolio consists of approximately 93 percent UN Sustainable Development Goals-linked investments and 62 percent exclusively climate and environment-focused UN Sustainable Development Goals-linked investments, we shall continue to set our path toward ‘sustainability and inclusion’ while keeping climate at the forefront.”
Earlier this year, the TSKB Sustainable Energy and Infrastructure On-lending Facility Phase 1 successfully reached its closing after supporting, with long-term financing, a portfolio of eight subprojects in renewable energy, electricity distribution and energy efficiency.
AIIB has been active in Türkiye since 2018, supporting projects to help address the country’s climate commitments and support the development of energy-efficient solutions. To date, AIIB has committed over USD3.57 billion through 17 projects in various sectors across the Turkish market.
About AIIB
The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank whose mission is financing the Infrastructure for Tomorrow—infrastructure with sustainability at its core. We began operations in Beijing in January 2016 and have since grown to 105 approved members worldwide. We are capitalized at USD100 billion and Triple-A-rated by the major international credit rating agencies. Collaborating with partners, AIIB meets clients’ needs by unlocking new capital and investing in infrastructure that is green, technology-enabled and promotes regional connectivity.
Source: aiib
