EUR 80 Million Loan from AFD to TSKB for Supporting Circular Economy

28 December 2022
- 3 min. Read

TSKB signed EUR 80 million credit facility with AFD for the purpose of financing the investments that directly serve the circular economy and support the companies aiming to develop circular economy practices. AFD and TSKB, which have signed loan agreements totaling 475 million Euros to date, specifically focus on the circular economy theme for the first time with this agreement.

Industrial Development Bank of Turkey (TSKB) secureda loan in an amount of EUR 80 million from the French Development Agency (AFD, Agence Française de Développement). This loan aims to provide financing to the investments that directly serve the circular economy and kinds of eligible investments to be made by the companies which have the purpose of developing their circular economy practices.

Murat Bilgiç: “The amount of funding we have received from AFD to date has reached EUR 475 million.”

Commenting on the agreement, TSKB CEO Murat Bilgiç stated that the EUR 80 million loan obtained by TSKB from AFD has a great significance and value in terms of circular economy investments and practices, which are among Türkiye’s priorities, and also added that, “Within our long-standing cooperation, we have undertaken many successful projects with AFD in different themes such as renewable energy, supporting SMEs, sustainable tourism, occupational health and safety, and women’s employment. This new loan agreement has a pioneering, innovative and inclusive theme as it was the Women's Employment loan in past, which was secured from AFD in 2016 and successfully repeated in 2019. The amount of funding we have delivered through AFD agreements  to date has reached EUR 475 million. With this first circular economy-themed agreement, we aim to support the investments that serve the circular economy and financing the companies which deliberately commit to improve their circular economy practices in Türkiye.”

Murat Bilgiç: “The realization of value-added investments in the Circular Economy is possible with effective financing models.”

Murat Bilgiç said that TSKB will continue to serve as a solution partner for the companies which aim to invest or improve current applications in circular economy with its long-standing sustainability experience and methodological approach, and continued, “The circular economy offers new opportunities to the countries in the process of sustainable development and transition to a low-carbon economy, which is critical for combating climate change and its effects. The European Commission has adopted the new Circular Economy Action Plan, which targets recycling rates of 70 percent for all packaging waste by 2030 and 65 percent for all municipal waste by 2035. The "Technical Assistance for Assessment of Türkiye’s Potential on Transition to Circular Economy", carried out simultaneously by our Ministry of Environment, Urbanization and Climate Change, will accelerate the steps in this area. Increasing capacity and ensuring improvement in the field of reuse and recycling for all packaging waste, especially plastics, in Türkiye is critical for becoming aligned with the EU’s Circular Economy Action Plan. The realization of value-added investments in the Circular Economy is possible with effective financing models. In such a conjuncture, we see that our vision of creating measurable value for an economic development that centers on the principles of environmental impact, social inclusion and proper governance gains even more importance. 93% of our loan portfolio consists of investments that contributing to the UN (United Nations) Sustainable Development Goals (SDGs). With this new theme signed with AFD, we are happy for supporting the participation in the circular economy, encourage reuse and recycling projects, as well as create resources for the green transformation of many different sectors such as textile, plastics, food and packaging. We have been working with a high focus for nearly two years regarding the circular economy financing needs in our country's journey towards achieving its sustainable development goals. As TSKB, we are ready to contribute the investments of our country in transition to the Circular Economy with our loan models that include measurement and improvement methodologies, and our competence in engineering and technical consultancy. I would like to take this opportunity to extend my appreciation for our effective cooperation with AFD in the field of sustainable finance, as well as for our important accomplishments under the umbrella of IDFC (International Development Finance Club).

AFD Turkey Deputy Director Marine Karcher: “We hope that this innovative loan agreement we signed with TSKB will be a game changer in terms of circular economy financing.”

Sharing his views on the agreement signed with TSKB, AFD’s Deputy Director for Turkey, Marine Karcher stated: AFD’s strategy in Turkey aims to contribute to a more sustainable and inclusive development of the country by providing financing through financial intermediaries and direct investments to support transition towards a low carbon economy. TSKB is a very important partner for AFD in Turkey and will now have a leading position in raising awareness and improving commitments of Turkish businesses towards circular economy. The project implementation will be associated with a dedicated Technical Assistance Programme which will be instrumental to enhance TSKB’s know-how on circular economy financing. TSKB’s clients’ know-how and their awareness on circularity issues will be boosted, operational tools to assess the benefits of circular practices will be disseminated, and support in their transformation process will be provided. We hope this innovative financing will be a game changer.”