European bank invests $2.3B in Türkiye this year so far

By Nuran Erkul and Emirhan Yilmaz

ISTANBUL (AA) – The European Bank for Reconstruction and Development (EBRD) has invested €2.2 billion ($2.3 billion) in Türkiye so far this year, bringing the total investments in the country to over $22 billion.

During her visit to Türkiye, EBRD President Odile Renaud-Basso spoke with Anadolu and met with President Recep Tayyip Erdogan to discuss future investment opportunities and how the bank can support Türkiye's projects and strategic priorities.

Renaud-Basso emphasized that the EBRD has been investing in Türkiye since 2009, making it the bank's largest investment destination to date.

"This year, we’ve already signed €2.2 billion ($2.3 billion) of investment, and with some time still left before the year ends, we expect to come close to last year's investment level of €2.5 billion ($2.6 billion), which was our highest annual investment in Türkiye," Renaud-Basso explained.

She also highlighted that 50% of EBRD’s investments are directed toward the green sector, with over 60% of these investments incorporating a gender component aimed at increasing female participation in the workforce.

- Macroeconomic policy changes in Türkiye show progress

Renaud-Basso praised the changes in Türkiye's macroeconomic policies, noting progress in the country’s economic rebalancing.

"High inflation causes significant uncertainty and distortions, and is unsustainable in the long run. It presents a major risk to the economy, so adjusting the macroeconomic framework was crucial, and we see positive progress," she said.

She added that inflation is on a downward trajectory, with Türkiye’s annual inflation expected to fall to around 40% by the end of the year, but emphasized that it remains a priority to continue the decline.

"I had a productive meeting with Central Bank Governor Fatih Karahan and Minister of Finance Mehmet Simsek. There’s a clear determination to remain on course, and this is crucial for creating a favorable environment for sustainable economic growth," she said.

While acknowledging the short-term challenges of tightening monetary policies, Renaud-Basso stressed that these steps are essential for building a sound economy based on solid fundamentals that will enable long-term growth.

- Green energy focus

Renaud-Basso also expressed support for Türkiye’s commitment to expand its wind and solar capacity by 90 gigawatts by 2035, calling it a "much welcome commitment" and a "very positive" step for the country.

Minister Bayraktar unveiled Türkiye's long-term energy strategy, which includes boosting renewable energy capacity, improving energy efficiency, increasing nuclear power generation, and adopting technologies like hydrogen and battery storage, alongside investing in critical minerals.

By 2035, Türkiye aims to raise its combined wind and solar energy capacity from 30 gigawatts to 120 gigawatts. Bayraktar estimated that these efforts will require at least $80 billion in investments.

"Given the geopolitical challenges, energy security is more crucial than ever. Developing renewable energy plays a key role in this strategy, and it is increasingly competitive due to the falling costs of renewable energy," Renaud-Basso said.

She added that the development of the electricity network is vital to absorb the expanded renewable energy capacity and that international institutions would support these efforts.

- Decarbonizing key sectors

Renaud-Basso highlighted the EBRD’s collaboration with Türkiye's Ministry of Industry and Technology to decarbonize sectors like steel, aluminum, fertilizers, and cement, which are vital to the country’s manufacturing base.

This initiative aims to boost the competitiveness of Turkish companies in foreign markets and will involve private investors and concessional funds to support energy efficiency improvements, technology integration, and decarbonization efforts.

- Uncertainties in the global economy

Renaud-Basso also addressed global economic uncertainties, citing geopolitical tensions, including Russia’s war in Ukraine and Middle Eastern conflicts, which contribute to investment challenges.

She noted the potential risks for Türkiye due to Europe’s economic slowdown despite strong trade relations, and warned that protectionist policies and trade wars could harm global growth.

"I hope international cooperation will prevail, and countries will find solutions to avoid a damaging protectionist trade war," she said.

Renaud-Basso mentioned the EBRD’s $1.6 billion investment program for Türkiye’s earthquake-stricken southeastern region, with $1.3 billion already allocated to various projects. The program may be extended depending on further needs.