IFC, a member of the World Bank Group, has said it had a fourth consecutive record year in Turkey, investing $1.8 billion to support sustainable energy and infrastructure development, improve municipal services, promote local capital markets and help Turkish companies increase competitiveness and impact.
The biggest gains were seen in the IFC’s equity investments, which reached a record $625 million in new commitments, an almost 70 percent increase over the prior year, added the statement. In addition to investing its own funds, the IFC also mobilized more than $300 million of financing for third party investors. The IFC provided $370 million in short-term loans to support trade finance under the IFC’s Global Trade Finance Program, which enables essential support and liquidity for trade flows through a global network of more than 500 bank partners, helping small and medium enterprises access the global trading system.
This fiscal year also marked the end of the current five-year World Bank Group Country Partnership period with Turkey, under which the IFC implemented its program in the country, according to the statement. During this period, the World Bank Group invested a total of $9 billion in Turkey, including a significant $4.5 billion contribution from the IFC to meet the program’s development goals.
With a total committed portfolio of $4.8 billion, Turkey is currently the second largest country exposure for the IFC globally. The IFC’s office in Istanbul, established 30 years ago, is its largest office outside of the Washington, D.C. headquarters and is also the operational hub for the IFC’s activities in Europe, Central Asia and the Middle East and North Africa.
“Our program in Turkey remains strong with another record level despite a challenging year for Turkey’s private sector” said Aisha Williams, IFC Country Manager for Turkey. “As the financing environment gets tighter for emerging markets globally, we see more demand for IFC’s services. In line with our strategy in Turkey, we continued to support Turkey’s development goals by working with our clients across all industries.”
This year the IFC became a 10 percent shareholder in Fibabanka and invested the Turkish Lira equivalent of $110 million in Odeabank, a subsidiary of Lebanon’s Bank Audi Group through a subscription to a 1-billion-lira capital increase by the lender. The IFC invested in Unit Investment NV to support its growth and expansion with the development of new independent power plant projects in Europe and Middle East. The IFC also acquired a 16.67 percent stake in Akfen Energy, a subsidiary of Akfen Holding. The investment will help Akfen Energy to almost triple its renewable energy production and utilize Turkey’s local energy resources for sustainable generation.
One of the IFC’s landmark investments was a $215-million equity investment in Rönesans Holding, one of Turkey’s largest construction and infrastructure companies, to improve the company’s competitiveness and help accelerate its global expansion. In the fiscal year 2016, the IFC also made $455 million in climate change-related investments in Turkey promoting construction of green buildings, boosting renewable energy generation capacity, helping companies increase energy efficiency and utilizing innovative green financial instruments.
As part of the World Bank Group’s Sustainable Cities initiative, the IFC is increasingly working with Turkish metropolitan municipalities, providing a mix of loans to private service sponsors and public-private partnerships, as well as advisory services to improve urban infrastructure. In 2016, the IFC also continued its partnership with Turkey’s banks and financial institutions to increase access to finance for small and medium enterprises and increase investments in areas that are essential for Turkey’s sustainable development, providing $380 million for such projects.