Turkish Sustainable Energy Financing Facility (TSEFF)

approved

The EBRD launched a framework operation in July 2010 under which the Bank provides funding to four commercial banks in Turkey for on-lending to private sector borrowers (including SMEs and households) for energy efficiency and small-scale renewable investments (TurSEFF). The Facility initially consisted of senior loans to Partner Banks (“PBs”) in Turkey in an amount of up to USD 200 million, including up to USD 160 million from the Bank’s resources and USD 40 million of concessional funding from the Clean Technology Fund (“CTF”). Following the Board of Directors’ approval, the Bank signed agreements with four PBs up to a total amount of USD 200 million. In 2010 CTF provided an additional concessional funding in an amount of USD 6.66 million and the Board of Directors approved the fifth operation under the framework in 2011. Following that the Bank signed the fifth loan agreement in an amount of USD 39.96 million where the Bank provided USD 33.30 million from its resources. Following the signing of the fifth agreement, the Facility reached a total amount of USD 239.96 million with five PBs. In 2012, the Bank provided an additional loan to one of the PBs under TurSEFF to address the immediate need for funding of the pipeline of sub-projects which increased the overall Facility amount to USD 264.19 million. Following the successful cooperation with the first five commercial banks under TurSEFF, the EBRD will launch an extension of framework operation (TurSEFF II) of USD 200 million under which the financing will be provided by EBRD up to five commercial banks in Turkey, for on-lending to private sector borrowers (SMEs) for energy efficiency and small-scale renewable investments. This extension is sought in order to support the TurSEFF PBs to address their need for additional funding required to finance the pipeline of projects accumulated throughout the implementation of the first Facility. The Project will generate transition impact by demonstrating the benefits of energy conservation and promoting the expansion of energy efficiency investments in the energy intensive Turkish economy. The Project will help develop and demonstrate efficient and effective financing mechanisms for energy efficiency projects through new business models designed specifically to overcome aspects of energy efficiency projects considered risky and to reduce transaction costs. The Project is also expected to transfer and build expertise, among both financial institutions and companies, related to energy efficiency and renewable energy investments. Clients of TurSEFF II will be up to three commercial banks in Turkey. It is planned that clients will be mostly the existing PBs of TurSEFF, and will be selected from leading commercial banks with extensive outreach into the industrial and SME segment and the institutional capacity and commitment to successfully establish a business line in energy efficiency financing as one of their key priority areas. TurSEFF consisted of USD $264.19 million in senior unsecured loans. Under the extended framework USD 200 million will be provided by the EBRD with senior unsecured loans. TurSEFF $264.19 million. Extension of TurSEFF (TurSEFF II) $200 million Categorised FI (2008): This project offers significant environmental opportunities as it will contribute to the reduction of greenhouse gases. All participating banks are required to comply with the requirements of EBRD’s Performance Requirement 2 (“PR”) on Labour and Working Conditions. All sub-loans under the credit lines will need to comply with the requirements of PR9. Sub-borrowers financed through the credit lines will be required to comply with national requirements for environment, health and safety and labour standards. Reporting on sub-projects and annual environmental and social reports will be provided by the participating banks. An independent consultant will be employed to review proposals and confirm compliance with national EHSL requirements. The Facility will be supported by a comprehensive technical assistance programme of EUR 3.3 million to provide implementation support to participating banks and sub-borrowers. Funding for the TC programme will be allocated from the resources of the EU/EBRD SME Facility (2006 sub-account) Kiyoshi Nishimura E-mail: nishimuk@ebrd.com