Additional USD100M for Renewable Energy and Energy Efficiency Projects
The Asian Infrastructure Investment Bank has approved an additional loan of USD100 million to Türkiye Kalkınma ve Yatırım Bankası (TKYB) for the TKYB Renewable Energy and Energy Efficiency On-Lending Facility established to invest in renewable energy and energy efficiency projects. This approval will increase AIIB’s loan commitment to a total of USD300 million from the initial USD200 million loan, approved by AIIB’s Board of Directors on Nov. 12, 2019. AIIB’s additional financing is supported by a guarantee from the Republic of Turkey.
Proceeds from the additional loan are expected to be on-lent to private-sector sub-borrowers to partially support a growing pipeline of wind, solar, and biomass renewable energy opportunities in Turkey.
“We expect the entirety of this loan to be dedicated to renewable and energy efficiency projects. This translates to more wind and solar energy, which will bring Turkey closer to its decarbonization goals,” said AIIB Vice President, Investment Operations (2) Konstantin Limitovskiy, “Our established partnership with TKYB, and the strong results we are seeing from our initial investment, give us confidence that the additional financing will positively contribute to the low-carbon energy transition.”
Turkey’s parliament unanimously ratified the Paris Agreement on Oct. 6, 2021. The country has been a signatory to the Agreement since April 2016.
The current portfolio of sub-projects under the existing facility is expected to produce up to 1,260 gigawatt hours (GWh) of electricity and displace more than 725,000 tons of CO2 equivalent each year once the sub-projects are fully commissioned. Five sub-projects (representing more than 130 MW of installed capacity) from AIIB’s initial investment have been completed as of the end of July 2021. The approved additional loan is expected to further expand the size of TKYB’s renewable energy portfolio.
İbrahim Öztop, CEO of the Development and Investment Bank of Turkey said, “With this additional financing from AIIB, we will continue to support renewable energy and energy efficiency investments in line with our sustainable development strategy.
As part of our cooperation with AIIB, the first agreement in the amount of USD 200 million was signed in December 2019. This new agreement for the same purpose is an indicator of the close relationship between the two banks as well as their trust in our country and our Bank. We would like to thank AIIB for this valuable cooperation that has been going on for years.”
“Working with financial intermediaries, such as TKYB, is a very effective way for the Bank to amplify its development impact. This financing approach enables us to efficiently direct funds towards smaller projects that face liquidity challenges but directly align with AIIB’s climate finance goals,” said Vice President Limitovskiy.
The expanded loan brings AIIB’s total sovereign-backed commitments to TKYB to USD600 million and the total signed sovereign and non-sovereign approved commitments to Turkish financial institutions in the last four years to USD1.45 billion.