Export Finance Intermediation Loan 3 (EFIL 3)

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The Third Export Finance Intermediation Project development objective is to provide medium and long-term working capital, and investment finance to private exporters, and contribute to further facilitating export growth in Turkey. Furthermore, the project will improve the quality, and safety of, and access to, finance through the development of financial intermediation within the Turkish private financial sector. The project consists of a single component - financing of sub-loans and leases under the project, in two tranches of US$200 million and €80 million. The Turkiye Sinai Kalkinma Bankasi (TSKB), a privately owned investment and development bank, will act both as the Borrower and Implementing Agency, with the Government issuing a guarantee to the Bank. TSKB will act in the capacity of a wholesale institution, and will on-lend loan funds through a group of 4-8 private banks, and 2-4 leasing companies, selected pursuant to the criteria agreed between the Borrower and the Bank. TSKB will take the credit risk on the banks and leasing companies selected for participation. The participating financial intermediaries in turn, will make sub-loans and leases to private exporting enterprises for procurement of goods and works, in order to expand their current export volumes, or, in exceptional circumstances, to enable them to retain, and maintain their current level of exports. The on-lending banks and leasing companies will take the credit risks on the borrowing enterprises. The subsidiary loans made by TSKB to the participating banks, and leasing companies will be denominated, and repayable in US Dollars and Euros. The participating banks and leasing companies are expected to price their sub-loans and leases, which may be denominated, and repayable in any foreign currency on a commercial basis.