WASHINGTON, February 22, 2024 – The World Bank Board today approved a EUR 600 million loan guarantee, which will be used towards supporting Turkish exporters to reduce carbon emissions from their production processes to help safeguard their competitiveness and export markets.
The Türkiye Green Export Project will help provide affordable, long-term financing for exporters to invest in green, climate-resilient solutions, such as upgrading machinery, equipment, and heating and cooling systems, as well as reducing or recycling waste.
As a producer of emission-intensive products, reducing the carbon footprint of Turkish exporters is particularly vital as the European Union (EU) begins imposing tariffs on carbon-intensive products from 2026. The EU market accounts for 40% of Turkish exports.
Turkish export firms are also large employers, employing about 37% of the country’s workforce, underscoring the need for Turkish industry to be fit for purpose in a greener global trade market.
“The continued success of the export sector is crucial to Türkiye’s economy and its green transformation is a top priority for the government. The World Bank is delighted to support these efforts that will contribute to the global transition to a low-carbon future and at the same time to enhance the firms and country competitiveness,” said Humberto Lopez, World Bank Country Director for Türkiye.
Long-term financing is key for the investments that will ensure a smooth transition to green economy, which in turn is needed to mitigate climate transition risks. The Türkiye Green Export Project will mobilize long-term commercial funding with a loan guarantee of up to EUR600 million to Eximbank to enable the raising of up to EUR1 billion in international private capital through commercial loans of about 10-year tenures, all of which for supporting exporters’ greening efforts. This financing will be more favorable in terms of maturity and costs compared to conventional market options, providing a much-needed impetus for exporters to reduce carbon emissions and boost green exports.
“The project is a game-changer for private capital mobilization to finance long-term, sustainable, and green economic growth. The guarantee instrument is also a market-oriented approach in supporting exporters to adapt to climate transition risks and take advantage of the opportunities offered by the increased demand globally for green products and services,” said Gunhild Berg, one of the World Bank Project Team Leaders.
The project is a part of broader World Bank support for greening Türkiye’s industrial sector and economy to help the country achieve its goal of net-zero emissions by 2053. The World Bank is supporting green transformation in other sectors, including energy, transport, industry, urbanization, agriculture, and water and forest management.
