A Turkish private lender has implemented a "Gender Loan" structure for the first time in Turkey and the world to finance a massive wind farm project.
Garanti BBVA is implementing the structure for the first time in financing Polat Enerji's 48 megawatts (MW) Soma 4 Wind Power Plant project, which will be the largest wind power plant in Turkey, the lender said in a statement Friday.
It promises to decrease both cash loan interest and non-cash credit commission during the loan term if the performance of the project improves in the assessment, to be made within the scope of the structure every year.
The structure comes after "Gender Bond," a social bond issued for the first time for female entrepreneurs in the emerging markets.
The 80-year cash portion of the $44 million loan amounts to $21.4 million, while the 11.5-year non-cash portion adds up to $22.6 million. Within the scope of the "Gender Loan," Garanti BBVA teams will score Polat Energy's performance in the field of gender equality in accordance with international norms every year.
The score will be updated and the first assessment will be considered the base. In subsequent assessments, if the company rises above the base point, the cash loan interest and non-cash commission fee will be reduced. This way, companies that perform well in terms of gender equality will be rewarded and incentives will be provided for other companies to improve their performance.
The criteria include postpartum return-to-work programs, observing the principle of equality in new recruits, prioritizing businesses with female-dominated partners in the supply chain, the female-male salary ratio, the policy of preventing harassment and training on defeating unconscious negative prejudices against women. The score, which will be calculated according to the bank's self-developed methodology will demonstrate Polat Energy's gender equality performance across the value chain. Polat Energy Head of Strategy Alkım Bağ stated that they always regard gender equality as an important issue to take advantage of various perspectives and talents in human resources and to maintain their success.
"There is also a significant representation of women in our current organizational structure. We are proud to be the first company in Turkey to benefit from this credit structure which encourages us to move our performance to further levels," she said.
The bank's Executive Vice President Ebru Dildar Edin said they believe that gender equality is first and foremost a human rights issue. "The importance of women needs to be understood for both a fair society that respects human rights and for a better economy. The employment rate of women in Turkey is less than half that of men. If we could reach the Organization for Economic Co-operation and Development [OECD] average of 63% with strong policies to support women's participation in the labor force, Turkey's gross domestic product has the potential to increase by 20% in 2025. This amounts to an increase of about $2,300 to $2,900 in per capita income."
Edin pointed out that although 45-50% of the educated people in Turkey are women, the female representation rate does not exceed 30% even in leading companies when the financial sector is considered separately, emphasizing that crucial tasks fall on both the government and the private sector at this point.
"Through the ‘Gender Loan,' companies will be able to have financing under more appropriate conditions with steps that they will take in gender equality," she added.