The European Bank for Reconstruction and Development (EBRD) will provide a 150 million euro ($173.9 million) loan to Turkish home appliance manufacturer Arçelik for green manufacturing, the company said Tuesday.
The loan, which will support a three-year environmentally sustainable investment program, will come in two parts.
Some 83 million euros, the first externally verified green loan to Turkish manufacturing, will support a green investment program to transform processes and plants and fund the research and development of greener products.
The remaining 67 million euros will finance upgrades at the company's refrigerator plant in central Eskişehir province and at its cooking appliances plant in northwestern Bolu.
The EBRD previously provided a 150 million euro loan to help the company produce more energy-efficient and low-noise refrigerators and washing machines, which are in high demand, especially in foreign markets, it noted.
The new investments will help the company achieve its 2030 climate targets, in line with the objectives of the Paris Agreement, it added.
"We applaud Arçelik's leadership in the green transition of Turkey's manufacturing sector. Its pioneering experience shows that environmental improvements go hand in hand with profit-making and improved competitiveness," EBRD President Odile Renaud-Basso said.
"The costs of materials, energy and compliance have increased, and customers, investors and local communities have higher expectations. Therefore, managing operations in an environmentally and socially responsible manner is a business imperative," she added.
Arçelik CEO Hakan Bulgurlu said the private sector has an important responsibility in the decarbonization of the industry and the transition to a net-zero economy.
"The business world must set an example for both the planet's future and sustainable development. Arçelik is taking firm steps in this direction with its green investments," he said.
"We will translate important goals into action on the path to becoming a net-zero company throughout our value chain by 2050. Financing our environmental sustainability and research and development projects with the green loan provided by the EBRD will be integral to achieving that."
Arçelik was named industry leader in the household durables category of the Dow Jones Sustainability Index Review in 2020 for the second year in a row.
The EBRD has so far invested 14 billion euros in Turkey through 351 projects, with 95% of those in the private sector. Half of its portfolio in Turkey promotes the green transition.