The Asian Infrastructure Investment Bank (AIIB) and the Industrial Development Bank of Turkey (TSKB) have signed a US$200 million on-lending facility to contribute to Turkey’s climate mitigation and adaptation goals in line with the Paris Agreement. The facility is backed by a guarantee from the Government of Turkey.
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 Turkey’s recent declaration of enhanced commitment to further reduce greenhouse gas (GHG) emissions by 41% below business-as-usual levels by 2030, raising the target from 21%, 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 sub-borrowers by financing eligible sub-projects 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, in line with the country’s commitments under the Paris Agreement.
The collaboration between AIIB and TKSB began in 2018 with the launch of the Sustainable Energy and Infrastructure On-lending Facility Phase 1, which closed earlier this year after supporting, with long-term financing, a portfolio of eight sub-projects in renewable energy, electricity distribution and energy efficiency. The project enabled the financing of renewable energy projects with a total installed capacity of 479.6 megawatts.
To date, AIIB has committed over US$3.57 billion through 17 projects in various sectors across the Turkish market.