Türkiye Green Industry Project

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The project aims to support industrial exporters to align with new requirements in export markets (e.g., CBAM, the green deal, the circular economy action plan, EU product directives), connected to their value chains, develop opportunities for extended green products, and support industrial firms in the adaptation to climate change impacts and adoption of relevant mitigation solutions. The project will support industrial firms to use resources more efficiently and innovate in their management, production process, and/or products to meet future market demands. The project will leverage the existing expertise and mechanism of key relevant organizations – under the umbrella of Ministry of Industry and Technology (MoIT)- in the implementation of the project. The project will have three borrowers: (a) The SME Development Organization of Turkiye (KOSGEB), guaranteed by the Ministry of Treasury and Finance (MoTF); (b) Scientific and Technological Research Council of Turkey (TÜBİTAK), guaranteed by MoTF; and (c) MoTF for the benefit of MoIT. The project will be structured around four components, as follows: Component 1: Support industrial SMEs improve their resource performance and reduce their carbon emissions (US$250 million), which will be managed by KOSGEB. It will provide reimbursable financing for investments in solar energy, resource efficiency, and circular economy. Component 2: A Contingent Emergency Response component (CERC, US$0) to be implemented by KOSGEB in the event of an eligible crisis or emergency, in line with World Bank Policy: Investment Project Financing, paragraphs 12 and 13.Component 3: Support the Green Innovation of Industrial Enterprises (US$175 million), which will be managed by TÜBİTAK. It will provide technology extension matching grants and reimbursable financing for green firm-level and platform-level innovation (product and process).Component 4: Project management and institutional development (US$25 million), which will be managed by DGI-MOIT and aims to coordinate project activities, define an eligible green technology taxonomy, provide technical assistance to MOIT and partners, qualify and certify green transformation experts, establish a green knowledge management system for industries, and provide awareness to firms about the project’s activities and results.The project is consistent with FY18‐21 Country Partnership Framework (CPF) for Turkey, which was recently extended through the Program and Learning Review. Specifically, the Project is well aligned with the CPF’s Focus Areas 1 (Growth) and 3 (Sustainability) and would support the following CPF objectives: (a) CPF Objective 3: Enhanced Competitiveness and Employment in Selected Industries; (b) CPF Objective 7: Improved reliability of energy supply and generation of green energy. The project is fully aligned with the Bank's Country Climate and Development Reports (CCDR) recommendation to adopt a resilient and net zero pathway that can help Turkiye achieve its development and climate objectives but implies a significant departure from current trends and important policy changes.