AIIB’s First On-lending Facility Supports Renewable Energy Projects in Turkey
AIIB’s First On-lending Facility Supports Renewable Energy Projects in Turkey
The Asian Infrastructure Investment Bank’s (AIIB) Board of Directors has approved a loan of up to USD200 million to the Industrial Development Bank of Turkey (TSKB), backed by a guarantee from the Government of Turkey. The loan will support long-term financing, primarily for renewable energy and energy efficiency projects.
The existence of a long-term financing gap for infrastructure in Turkey exposes projects to refinancing or rollover risk. This project will help to fill this gap. The investment will also support renewable energy projects that can qualify for the Turkish government’s Renewable Energy Support Mechanism “YEKDEM”, which promotes private sector participation in the renewable energy sector.
“We are partnering with TSKB for our first on-lending program with a financial intermediary in Turkey because it will help reduce constraints on long-term capital in Turkey’s banking sector,” said AIIB Vice President and Chief Investment Officer DJ Pandian. “This is well aligned with our mission to promote sustainable infrastructure and mobilize private capital investment in Asia.”
The loan will finance renewable energy projects, including solar, hydropower, wind, geothermal, biomass and energy efficiency projects, and to a lesser extent in other infrastructure sectors, such as transport, water management and treatment, power transmission and telecommunications.
This is AIIB’s second investment in Turkey this year, following an earlier USD600 million investment in the Tuz Golu Gas Storage Expansion Project.
“This new investment program will primarily support sustainable energy projects in line with Turkey’s 2023 goal to alleviate the country’s dependency on energy imports. We also believe TSKB’s robust management procedures will ensure the extension of AIIB’s loan to renewable energy, energy efficiency and other infrastructure projects is of the highest quality,” said AIIB Director General for Investment Operations Yee Ean Pang.
The loan provided as part of this on-lending facility will comply with TSKB’s Environmental and Social Management System, which is materially consistent with AIIB’s Environmental and Social Policy and relevant Environmental and Social Standards. TSKB has also developed an Environmental Risk Evaluation Tool for an additional level of screening and categorization of sub-projects to ensure strict environmental and social controls.
More information about the project can be found here.
About AIIB
The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank with a mission to improve social and economic outcomes in Asia. Headquartered in Beijing, we began operations in January 2016 and have now grown to 87 approved members worldwide. By investing in sustainable infrastructure and other productive sectors in Asia and beyond, we will better connect people, services and markets that over time will impact the lives of billions and build a better future.
Source: aiib.org
