Fourth Export Finance Intermediation Loan (EFIL IV)

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The Fourth Export Finance Intermediation Loan (EFIL) Project for Turkey development objectives are to: (i) support exports by providing medium and long term working capital and investment finance to exporting firms; and (ii) improve the ability of the financial sector to provide financial resources to firms through development of financial intermediaries. There are three components to the project. The first component is a replication of the Third Export Finance Intermediation Loan (EFIL III) project which is a single-component project consisting of a credit line to Tiirkiye Sinai Kalkinma Bankasi (TSKB) as the borrower and implementing agency. TSKB will intermediate the funds through Participating Financial Intermediary (PFIs), which in turn will on-lend to eligible private exporters. In the second component, Eximbank will borrow and act as an additional implementation agency lending directly to exporters. Inclusion of Eximbank will expand the reach of the project into the shipbuilding and machine-building sectors. Eximbank will focus on these sectors because of their promising export and growth potentials and because it is well placed to serve them due to its established relations. Finally the third component will finance improved risk management capacity at Eximbank. In addition to building back-up capacity for its critical Information Technology (IT) system to better manage operational risk and upgrading the existing IT systems, it will help the bank for Basel II implementation that started January 1st, 2008. This component will include: (a) improved emergency management and the establishment of disaster recovery center as it will be required by regulators for operational risk management; (b) implementation of a ratings based credit appraisal system and monitoring as required under Basel II; and (c) consulting services to assist in credit appraisal for sub-loans in shipbuilding and machine building industries.