Türkiye's credit guarantee fund has inked a cooperation protocol with a major fund for Southeast Europe to develop a new program supporting sustainable agriculture, according to a report on Tuesday.
The Credit Guarantee Fund (KGF) has signed a cooperation protocol with the European Fund for Southeast Europe (EFSE) to develop a new guarantee program for sustainable agriculture, aimed at strengthening farmers’ and agricultural enterprises’ access to finance in Türkiye, the Anadolu Agency (AA) report said.
In his speech at the signing ceremony, KGF's general manager, Hasan Basri Kurt, stated that they have taken significant steps toward establishing "a green list" and supporting agriculture through this method.
Kurt drew attention to the fact that the green list method had never been implemented in Turkish agriculture before, and said: "We see this as a project that will provide access to international funds, contribute to the development of Turkish agriculture, prevent waste in sustainable agriculture, increase efficiency and serve as a key solution."
He noted that they have now launched the Agricultural Guarantee Program, and that a limit of approximately TL 30 billion (around $667 million) has been allocated across 10 banks, emphasizing that sustainability stands before them as an entirely new perspective.
"Thanks to this sustainable green list, banks in Türkiye will have access to international finance and will be able to offer loans to our farmers under better terms with lower funding costs," he suggested.
EFSE Portfolio Manager Jasminka Begert highlighted the special importance of this project that promotes sustainable agriculture for them, and expressed pride in cooperating with KGF in this context.
Begert stated that while supporting the financing of sustainable agriculture, they share a common vision with KGF and said, "In addition to the urgency of the actions we aim to implement, we also see the opportunities it will create for Türkiye's agricultural sector."
"For this purpose, we aim to enhance both KGF’s and the participating banks’ technical capacity to properly finance sustainable agriculture, thereby supporting farmers’ more climate-smart, sustainable, and efficient production," she added.
Scope of the protocol
Under the protocol, EFSE is expected to provide a fund of approximately 100 million euros (nearly $117 million) in Türkiye through certain banks, with the resources to be allocated to agricultural enterprises that meet "green list” criteria.
KGF will design a guarantee product for these loans, particularly aiming to facilitate access to finance for enterprises with insufficient collateral.
The Pilot Sustainable Agriculture Guarantee Program to be developed will provide partial credit guarantees for working capital and investment loans. Climate-friendly technologies, resource efficiency and environmentally sustainable agricultural activities will be encouraged. Green list criteria will be integrated into both the credit and guarantee processes, establishing a standardized approach to sustainable agricultural finance.
Additionally, a special technical support program for KGF has been designed under the cooperation. Within the program, the design and operational processes of KGF guarantee product will be improved, and the green list will be integrated into KGF’s Portfolio Guarantee System.
The "green list" is also known as sustainable agricultural activities and investments.
The list includes topics such as the production of protein crops, the improvement of agricultural input efficiency, water efficiency, zero tillage, organic production, beekeeping, circular agriculture, sustainable livestock, and aquaculture.