Garanti BBVA, the second-biggest private lender in Turkey, has signed a risk-sharing agreement with the European Bank for Reconstruction and Development (EBRD) to support investment projects, the bank said in a statement Friday.
Under the scope of the agreement, the bank will prioritize investments with high sustainability performance or for companies wishing to improve performance while maintaining financing investment projects in which Garanti BBVA shares the risk.
Within the scope of the agreement, which is the bank's first transaction based on risk sharing, up to 50% funding will be provided for commercial and project finance loans in Turkish lira, U.S. dollars or euros that will be allocated by the bank. The bank will be able to share risk with the EBRD for up to half of each loan eligible for use.
In all investments to be included in the scope, the sustainability performance and goals of the companies will be taken into consideration.
Garanti BBVA General Manager Recep Baştuğ, whose views were included in the official statement, emphasized that this agreement is of great importance as it is the first transaction based on risk sharing with the EBRD.
"It makes us happy that loans indexed to sustainability are also included in this scope. Today, we believe that banks have important responsibilities in terms of sustainability. Our standards on environmental and social risks, which we initiated in 2004, have improved day by day and continue to improve,” he said, adding the bank will make loans available to companies that meet the sustainability criteria.
The EBRD will fund half of the loans under the risk-sharing agreement, which will enable easier financing of investment projects affected by the pandemic process.
“Thus, we will share the risk with the EBRD half and half for loans provided to companies,” Baştuğ said.
He also noted that the companies operating in the infrastructure and energy sector will be able to use the loan to refinance their working capital, capital expenditures and existing loans.
“At a time when financial markets were strained due to the pandemic, this agreement based on the risk-sharing made with the EBRD once again demonstrated the trust in our bank,” Baştuğ said.
