WASHINGTON, April 12, 2018—The World Bank’s Board of Executive Directors today approved a US$91.54 million loan for the Sustainable Cities II Project in Turkey. This is the second project in a series of projects under the Program for Sustainable Cities, which aims to improve the economic, financial, environmental, and social sustainability of Turkish cities by enabling interested municipalities to access financing for their investments and to deliver improved services to their citizens. The first Sustainable Cities Project valued at US$132.7 million, was approved on December 20, 2016.
"Today, more than 75% of Turkey’s citizens live in cities, which have become strong drivers of economic growth. Although urban access to services has expanded significantly in the past few decades to meet the needs of this population, it remains challenging both to ensure the quality of services and their long-term financial and environmental sustainability,” said Johannes Zutt, World Bank Country Director for Turkey. “The World Bank Group has a long-standing engagement in Turkey’s urban sector and we are happy to continue helping Turkey’s cities to expand and improve their service delivery through this second Sustainable Cities Project.”
The project will be implemented by Iller Bank and will assist the cities of Antalya and Muğla through financing investments in infrastructure needed to meet service delivery requirements, particularly under the Metropolitan Municipalities (MM) Law of December 2012, to expand territorial service coverage and improve service quality.
The expected investments focus on improvement of water and sanitation services in the areas which are included in the service area of each MM and its water and wastewater utility as required by the MM Law. Both cities will also receive support in preparing urban and financial investment plans through the first Sustainable Cities Project’s Institutional Strengthening component, which is co-financed by the European Commission.
The project supports the Turkey Country Partnership Framework of the World Bank Group for the 2018-2021 period, which includes the strategic objective of improving the sustainability and resilience of cities through investments and technical assistance interventions which coalesce around a public-private investment coordination platform in coordination with the International Finance Corporation (IFC) which is the Private Sector Arm of the World Bank Group. The Project thus supports the World Bank’s objective under the maximizing finance for development (MFD) approach through this public-private investment coordination platform.
The project is also consistent with the Turkish Government’s 10th Development Plan (2014–2018), particularly its ‘Livable Spaces/Sustainable Environment’ pillar, which recognizes the challenges of rapid urbanization and maximizing its benefits for people and economy.
The lending instrument for the project is an IBRD Flexible Loan with a fixed spread and 30-year maturity, including a five-year grace period, level principal repayments and a commitment-linked repayment schedule.
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