After it delivered a high investment volume in difficult market conditions last year, the European Bank for Reconstruction and Development (EBRD) is looking to increase its investment in Turkey in 2020 as the economy is set to rebound, the company said in a statement Thursday.
The EBRD provided 1 billion euros ($1.11 billion) in debt and equity financing for 35 Turkish projects last year.
Arvid Tuerkner, EBRD managing director for Turkey, said: "In a difficult business environment, our business volume in Turkey remained unchanged in 2019 from the previous year. Last year, we provided 1 billion euros in financing across various sectors and were able to support our clients to ensure continued smooth operations and the pursuit of growth opportunities. The overwhelming majority of our investment was in the private sector and half of it was in support of Turkey's sustainability agenda, the country's blueprint to implement the global development goals."
The EBRD expects the Turkish economy to rebound in 2020, Tuerkner said, adding that the bank aims to support even more investment projects that boost the economy, create jobs and improve people's lives.
The bank's statement also noted that it will also work to expand its Women in Business program and attract new lenders to the initiative. According to the statement, the EBRD will continue its engagement with the Turkish government to deploy energy efficiency technologies in schools and to liberalize the railway sector. The bank will maintain its focus on renewable energy projects.
Exploration of opportunities for Islamic financial products will also be on the agenda of the bank.
"A big part of this financing is expected to be in Turkish lira, as it was in 2019. Around one-third of the bank's 2019 financing related to local currency and the development of local capital markets to help companies reduce currency risks," the statement said.
One such lira loan, worth the equivalent of $100 million, to energy group Enerjisa Enerji, made an important contribution to capital market enhancements in Turkey with its link to TLREF, a new risk-free benchmark overnight lending rate that the EBRD had helped develop.
Since 2009 when it launched Turkey operations, it has invested almost 12 billion euros in various sectors of the Turkish economy, with almost all investments in the private sector. The EBRD's 6.7 billion-euro Turkey portfolio is the largest among the 38 economies where the bank invests.
In the energy sector, the bank also financed the extension of a geothermal power plant and invested in a stake in the renewable energy arm of İçtaş Holding in 2019.
The EBRD's equity transactions in Turkey focused on the technology sector, with investments in Modanisa, the online shop for Muslim womenswear, and the bus ticketing app Obilet, among others.
Responding to demand for enhanced port infrastructure, the bank financed four Turkish ports. The first three – an innovative logistics hub to be developed by Arkas Holding in Kocaeli, the Tekirdağ port and Asyaport – all located in the Marmara region, received loans. The fourth, the Mersin international port in the south of the country, participated in a Eurobond issuance.
The bank also engaged in the resolution of non-performing loans (NPLs). It worked with the authorities, banks and other stakeholders, held training events for debt recovery professionals and produced a report on how Turkey can ensure further resolution of NPLs. The EBRD also continued its support for the NPL asset management company Hayat Varlık.