Events

Türk Eximbank Has Signed Eur 1 Billion Facility With The Guarantee Of The World Bank

Turk Eximbank added a new one to their pioneering financing practices they provide to support the investments of exporters for green transformation by signing a loan agreement on 7 May 2024 as part of the "Türkiye Green Export Project" amounting to EUR 1 billion under counter-guarantee of the Ministry of Treasury and Finance and the first-loss guarantee of EUR 600 million from the International Bank for Reconstruction and Development (IBRD), a member of the World Bank Group, in order to ensure sustainable development in line with Türkiye’s climate change mitigation efforts and carbon score target. The 10-year facility, which was realized with the participation of Deutsche Bank, Standard Chartered Bank, BNP Paribas and ING Bank, has the significance of being Türk Eximbank's largest borrowing transaction to date and the first IBRD guarantee aimed at supporting the green transition of exporters.

The facility (under the Türkiye Green Export Project), is a collaboration among IBRD, lenders, and Türk Eximbank to assist Turkish exporters to overcome the challenges that may arise as a result of the European Union’s Carbon Border Adjustment Mechanism (CBAM) that in its first phase will be implemented in high carbon-intensive production sectors as of 2026, other carbon-intensive sectors in the forthcoming period, as well as carbon taxes in other export markets. In line with the objectives of avoiding potential adverse effects on exporters operating in affected sectors and supporting green-product producing exporters in expanding their exports, the project will finance exporters’ renewable energy production investments, energy efficiency investments and the working capital needs of exporters who will make such investments. In addition to the aforementioned primary objective of green transformation, the facility also has social objectives such as financing women-inclusive firms and SME financing.

In his evaluation, General Director of Foreign Economic Relations of the Ministry of Treasury and Finance, Kerem Dönmez, said: "We give great importance to ensure access to favorable financing conditions for Turkish Exporters who are the driving power of our economy and to increase their international competitiveness by supporting their adaptation to European Carbon Border Adjustment Mechanism (CBAM). I believe Türkiye Green Export Project that is developed for this aim will lead our exporter’s green transition, create new job opportunities and support our country to reach its 2053 net zero emission goal. We will continue working with World Bank and our other development partners in order to support productivity-based and an export-led qualified growth in the upcoming period as well."

In a statement on the agreement, Türkiye Country Director of World Bank, Humberto Lopez said, “The ongoing success of the export sector is vital for Türkiye’s economy, and its transition towards sustainability remains a high priority for the government. The World Bank is pleased to assist in these initiatives, which will not only support the worldwide shift towards a low-carbon future but also boost the competitiveness of both the firms and the country”.

The general manager of Türk Eximbank Ali Güney, mentioned in his statement, "We are very pleased to support the green transformation of Turkish exporters by accompanying Türkiye's efforts to adapt to climate change with this 10-year facility of EUR 1 billion, which we have provided under the IBRD guarantee to support greener exports through cost-effective long-term financing. The CBAM, designed to help the EU meet its greenhouse gas emission reduction targets, will subject Turkish-made goods to import tariffs through a ‘carbon tax.’ This will put our exporters at a competitive disadvantage compared to companies that use low-carbon production processes, potentially affecting the marketability of their products in the EU and other export markets. It is anticipated that the CBAM will be extended to encompass all sectors by 2030, a relatively near future. Therefore, in order to safeguard their export potential, an immediate adaptation and decarbonization of their production processes to the greatest extent possible are expected from our exporters. Through this facility, we will do our part in the strategic road map to be drawn in line with the transition to a low-carbon economy and the protection of the competitiveness of our exporters in the related sectors. In this respect, the funding will also accompany Türkiye's climate change adaptation efforts while supporting the long-term finance needs of Turkish exporters. On the other hand, Türk Eximbank, as a key player in combating climate change and promoting decarbonization, will further enhance the green transformation of Turkish exports through this pioneering transaction, which also represents a first for the World Bank.”

One of the creditor banks, Deutsche Bank Country Manager of Türkiye and General Manager of Deutsche Bank A.Ş. Orhan Özalp," This is a landmark deal confirming our commitment to Türkiye and its leading Export Credit Agency; Türk Eximbank. Deutsche Bank played an instrumental role in mobilizing EUR 1 billion by participating. On the back of improving macro picture of the country, Deutsche Bank’s commitment to Türkiye will continue to grow. We would like to thank all stakeholders in this deal, Türk Eximbank deal team, Ministry of Treasury and Finance and other co-lenders for swift execution under a structure with guarantee support from the World Bank." stated.

Standard Chartered General Manager of Türkiye, Kaşif Atun stated that "Standard Chartered is proud to act as Global Co-ordinator, Mandated Lead Arranger and Facility Agent for this important and largest financing under IBRD guarantee for Türk Eximbank, working closely with IBRD, Ministry of Treasury and Finance, and other lenders. This transaction has helped Türk Eximbank raise long term financing with very competitive rates. It is at the heart of our Bank’s strategy to support our clients and the communities we operate in and support them on their Sustainability journey in energy transition and decarbonization.  We are thankful to be a part of this very important transaction for the Country.”

BNP Paribas Global Head of Export Financei Yasser Henda, stated that “BNP Paribas is extremely proud to act as joint Bookrunner, Mandated Lead Arranger and Coordinator in this EUR 1bn facility in favour of Türk Eximbank benefiting from a Partial Credit Guarantee (“PCG”) from IBRD and supporting Turkish exporters adaptation to climate transition risks arising from the European Carbon Border Adjustment Mechanism (CBAM) and more generally the greening of their operations. Accompanying our clients in their transition journey towards less carbon emitting activities, inclusive growth and sustainability ambitions is at the heart of BNP Paribas’s strategy. Particularly, Export Finance at BNP Paribas maintains a heightened focus on supporting clients’ strategies and models adjustments on the paths of low carbon transition, as evidenced by the “Best ESG bank for Export Finance” award from GTR in 2022.  Congratulations to all teams involved for this fantastic achievement!”

Also, ING Türkiye’s CEO Alper Gökgöz, “As ING, we position sustainability as one of our key strategic pillars and we believe that green transformation requires a collective effort and action. We contribute to Turkish market by channeling our global expertise and experience in sustainable finance as well as providing access to ING’s global network. We help our customers to establish their sustainable finance roadmaps and gain access to international loan and debt capital markets. We believe that Turkish exporter’s transition to green area is significant to maintain their export capacity and gain competitive advantage. As a part of ING Group, which aims to put sustainability at the heart of what we do, we value contributing to the transition of our customers via conveying our expertise in international regulations, and we see this as an opportunity to use our experience and knowledge to support them with their transition to a net zero world. Furthermore, we believe women empowerment in business is important for a sustainable economy and driving social progress. In this respect, we are delighted to be part of this valuable collaboration which will support the green transformation of Turkish exporters, encourage women-inclusive firms, SME financing and contribute to Türkiye’s sustainability roadmap, economy” said.