Europe’s development bank on Friday said it was providing a $109 million loan to the largest private lender in Türkiye for on-lending to businesses and individuals affected by the devastating earthquakes that struck the country’s southeastern region.
The loan to Işbank is part of the European Bank for Reconstruction and Development’s (EBRD) Türkiye Disaster Response Framework, launched in the aftermath of the earthquakes in early February that killed over 50,000 people.
The disaster toppled hundreds of thousands of buildings, left millions homeless and severely damaged the southeastern region's infrastructure. Business groups, economists and the government have said rebuilding could cost more than $100 billion.
The EBRD said proceeds of the loan will be used to remedy some of the damage to the region’s economy and seek to preserve the livelihoods and human capital of the affected cities.
“By providing financial support to businesses and individuals, the loan aims to address the most immediate funding needs of the local population in those cities, bringing financial relief to the region’s private sector,” the lender said in a statement.
The EBRD previously announced a 1.5 billion-euro ($1.65-billion), two-year investment plan for the region, to lessen the economic impact of the disaster.
Arthur Poghosyan, EBRD deputy head of Türkiye Financial Institutions, said their rapid progress in transactions under the Türkiye Disaster Response Framework is vital for the recovery and reconstruction of the region.
“We are confident that as our long-standing partner, Işbank, will disburse these funds efficiently and successfully to those in need of financial relief while they are recovering their economic well-being,” Poghosyan noted.
The 600-million-euro Türkiye Disaster Response Framework, the first such framework deployed in the EBRD regions, aims to provide support for companies and individuals affected by the disaster. It also seeks to offer new lending for companies participating in recovery and reconstruction efforts in the area, strengthening the private sector’s role in disaster response.
Close to $350 million has been allocated to the EBRD’s partner banks under this framework to date, including the loan to Işbank.
Işbank Deputy Chief Executive Gamze Yalçın said the loan agreement carries great importance in terms of supporting the quake-hit region.
“The EBRD’s invaluable support for the Turkish economy and the affected region under the DRF is highly appreciated. Işbank Group, with its own inclusive TL 10 billion disaster package, will also continue to support the region with this new initiative,” said Yalçın.
To date, the EBRD has invested more than 18 billion euros in various sectors of the Turkish economy, largely in the private sector.
