WASHINGTON, May 24, 2019—The World Bank’s Board of Executive Directors today approved financing of Eur 500 million (US$ 560.6 million equivalent) to support sustainable development in Turkish cities. This comes in the form of an Additional Financing (AF) to the Sustainable Cities 2 Project, the second in a series of projects under the Program for Sustainable Cities. The program aims to improve the economic, financial, environmental, and social sustainability of Turkish cities by enabling interested municipalities to access financing for their priority investments and to deliver improved services to their citizens.
The first Sustainable Cities Project (SCP 1) for US$132.7 million (including an EU IPA grant of EUR 23.125 million), was approved in December 2016 and the second Sustainable Cities Project (SCP 2) for US$ $91.54 million was approved in April 2018. This financing comes at a time when the entire SCP1 and SCP2 funds are fully committed to subprojects.
"Turkey’s growing cities are faced with increasing climate and disaster risks requiring a broad range of sustainable and resilient infrastructure to provide services and improve the lives of Turkey’s citizens,” said Auguste Kouame, 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 additional financing to the second Sustainable Cities Project.”
The project will be implemented by Ilbank to finance eligible subprojects in areas of urban resilience and sustainability and will have two components:
- Component A: Municipal Investments (EUR 498.75 million or equivalent to $559.20 million). This component will be scaled up to finance demand-driven municipal infrastructure investments to improve access to quality, sustainable and resilient public transport, water and wastewater, solid waste management, energy efficiency and renewable energy, urban environments, municipal firefighting services, and social infrastructure and services.
- Component B: Project Management (EUR 1 million, Ilbank financed equivalent to $1.12 million). This component will finance goods, consulting services related to day-to-day project management, M&E, reporting, and project communications.
The project fits within 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 approach.
The project supports the maximizing finance for development (MFD) approach of the World Bank and the International Finance Corporation (IFC) which is the Private Sector Arm of the World Bank Group. 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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