Türkiye’s flow of external funds accelerates in 2024

By Deniz Cicek Palabiyik

Türkiye’s flow of external funds continues this year with confidence in its roadmap, as Finance Minister Mehmet Simsek told Anadolu that $1.5 billion in financing was secured from the World Bank for three projects.

Simsek emphasized that Türkiye continues to provide resources from foreign financing institutions to domestic institutions within the scope of project financing.

He noted the Memorandum of Understanding signed for the financing of €500 million ($539.29 million) within the scope of the €1.5 billion ($1.6 billion) financing package announced by the European Bank for Reconstruction and Development (EBRD) for the earthquake-stricken region.

Simsek said the World Bank also provided Türkiye with support for three projects after the EBRD.

“The confidence in Türkiye’s economic roadmap ensured that the flow of external funds continue at full speed this year,” he said. “Within the scope of our fruitful cooperation with the World Bank, we have secured $1.5 billion for the financing of three separate projects, which will be used for the purposes of ensuring the security of Türkiye’s energy supply and supporting the green transformation process of enterprises.”

- World Bank’s Board of Directors approves $1.5 billion in financing

Simsek emphasized that the three projects amounting to approximately $1.5 billion to be financed by the World Bank were approved by the bank’s board of directors.

The “Accelerating the Market Transition for Distributed Energy Program-for-Results (PforR) Project” to be carried out initially by the Development and Investment Bank of Türkiye (TKYB) and the Industrial Development Bank of Türkiye (TSKB) will provide approximately $697 million in funding to the two banks.

“The project will support the investments of companies in electricity storage systems through solar panels and batteries, therefore, the economic size to be created from this is expected to exceed $1 billion,” said Simsek.

He pointed out that the security of Türkiye’s energy supply will be supported by encouraging renewable energy investments.

“Secondly, the Ministry of Industry and Technology will provide a loan of approximately $400 million for the Türkiye Socially Inclusive Green Transition Project to be carried out through development agencies,” he said.

“The project aims to support sectors that are expected to be negatively affected by the green transition,” he added.

- ⁠Cooperation with World Bank to continue for necessary energy transformation

Thirdly, Simsek said TKYB will be provided with a loan of $416.7 million, which will be used for the “Türkiye Industrial Emission Reduction Project” that the bank will carry.

“Small and medium-sized enterprises (SMEs) will be supported to transition to greener production systems by providing financing with favorable conditions within the project,” he said.

“We steadfastly continue our strong cooperation with the World Bank to implement the necessary energy transformation, increase the use of renewable energy resources, and ensure inclusive green transformation in line with our country’s net zero emission goal for 2053 and green development goals. We will continue to direct our resources to more productive and efficient areas while maintaining the current account balance,” he said.

He stated that the amount of external resources provided by international organizations, government agencies, export credit agencies, and commercial creditors to various sectors in the country reached $8.8 billion last year.

“These resources are an indication of the confidence in Türkiye and in our program, which is based on transparency, consistency, accountability, and predictability,” said Simsek.

*Writing by Emir Yildirim in Istanbul