New financial commitments of the European Bank for Reconstruction and Development (EBRD) in Türkiye are likely to reach 1.5 billion euros ($1.46 billion), Arvid Tuerkner, EBRD managing director for Türkiye, told Anadolu Agency (AA) in an interview.

Given the high cost of energy, he expressed hope that the bank might fund more renewable energy projects in the country. He also predicted that if a more stable investment environment developed, more investments might be made.

Speaking on the sidelines of the EBRD's anniversary event, "10 Years of Support to Women in Business in Türkiye: Reflection on the Past and Ambition for the Future," Tuerkner acknowledged that Türkiye is not immune to global developments with a challenging year from increasing energy prices and high inflation, which has made it more arduous for investments.

‘’We are doing fine, especially in light of the difficult economy. We see lira depreciation and high inflation, it is not an easy environment for investments, and without investments, there is also nothing we can finance. There has been less foreign direct investment this year because of the circumstances,’’ he said.

Despite the difficult circumstances, he said the bank signed 1.1 billion euros worth of new commitments with a few more in the pipeline until the end of the year.

"I think we will come out with 1.4-1.5 billion euros financing this year, which is not bad in the current circumstances, but it is not a record either," Tuerkner noted.

Tuerkner stated that while the cost of importing energy resources was a hardship, Türkiye had at least seen economic development, and the bank had increased its growth predictions for the country to 4.5% this year and 3.5% for next year.

‘’This is an achievement compared to other countries but I think it also came at a price of currency depreciation, volatility and inflation. That is also hardship for people and makes business planning very difficult,’’ he said.

Green investments

According to Tuerkner, Turkish companies have demonstrated excellent resilience and a capacity to negotiate challenging circumstances, but a more secure climate would give businesses more confidence to invest even more.

Nonetheless, he said the bank remains as supportive, interested and engaged in Türkiye as ever, and the few new investments that will be signed next year is a testament to this commitment, with the likelihood that annual investments will continue unless volatility increases further, potentially creating problems for investments.

The EBRD would like to engage more in renewable energy, an area that it has been involved with a high share in Türkiye to date across many sectors, as it is cheaper to produce energy from renewables compared to fossil fuels. However, this engagement is dependent on the regulatory environment and incentives.

"I think it reinforces the push to greening the economy and especially the energy generation," Tuerkner said.

Data shared by the EBRD shows that Türkiye is currently the bank's largest market with an annual investment of 1.7 billion euros in 2020 and 2 billion euros in 2021, based on a 7.5 billion euro portfolio as of October 2022.

Almost 17 billion euros have been invested cumulatively since 2009 in over 385 projects and trade facilitation lines, of which 93% was channeled to the private sector.

'Women in Business'

Tuerkner also shared details on the "Women in Business" program that the EBRD first launched 10 years ago in Türkiye and then applied to other countries.

He said the flagship program promotes equality and the removal of barriers and difficulties in Türkiye and internationally.

‘’The program provides much more than funding. It provides advisory and technical assistance, creating products that are a better fit for female entrepreneurs with knowledge and expertise sharing,’’ Tuerkner said.

Over 10 years, 900 million euros in total has been allocated for the support of female entrepreneurs in Türkiye.

Given the difficulty in obtaining financing outside of major cities, more than 60% of the loans offered through the initiative have gone to female entrepreneurs in more rural areas.

Data shows that participating banks have financed 15,000 women-led or managed small to medium-sized enterprises (SMEs) in the country and 14,000 SMEs were provided with advisory, mentorship and training.

While 64% of the total sub-loans were disbursed to women-led SMEs located in the regions outside of Istanbul, Ankara and Izmir, 41% of the sub-loans were disbursed to startups or first-time sub-borrowers.

Women-led businesses accessing finance under the program significantly grew their operations and were 5% less likely to default within three years after the start of the program.

Almost two-thirds of the EBRD's projects in Türkiye over the past two years have included a gender component.