TSKB Signs USD 155 Million Agreement With The World Bank For Türkiye Green Fund
TSKB has obtained a USD 155 million loan from the World Bank, with the guarantee of the Ministry of Treasury and Finance of the Republic of Türkiye, to establish the Türkiye Green Fund. The Türkiye Green Fund, breaking ground as the first venture capital investment fund financed by loans, both in Türkiye and in the world, is dedicated to reducing emissions and fostering inclusive transformation. With a roadmap prioritizing climate risk management, it is poised to make a substantial impact on Türkiye’s 2053 Net Zero target. Commenting on the agreement, TSKB CEO Murat Bilgiç said, “Through the Türkiye Green Fund, our objective is to play an effective role in the green transformation journeys of businesses in our country, enhance the diversity, scale, and multiplier impact of funds for climate finance via capital markets. Our goal is to activate private sector capital through this fund, offering capital investment opportunities to companies. At TSKB, we are committed to making meaningful and diverse contributions to Türkiye’s sustainable development goals, leveraging innovative funds like the Türkiye Green Fund.”
TSKB (Industrial Development Bank of Türkiye), in line with its vision to offer substantial support to Türkiye’s sustainable and inclusive development through innovative financing practices, has entered into a USD 155 million loan agreement for the “Türkiye Green Fund” with the World Bank (IBRD), under the guarantee of the Ministry of Treasury and Finance of the Republic of Türkiye.
The Türkiye Green Fund, with an envisaged total size of USD 405 million, is anticipated to play a pivotal role in contributing significantly to Türkiye’s objectives outlined in the Nationally Determined Contribution. Within the scope of the project, which will mobilize the contribution of the private sector as well as the public sector in meeting the current financing deficit in Türkiye, beneficiary companies are provided with a balanced level of indebtedness and strategic growth opportunities through equity investments. Poised to foster the growth of capital markets, the Türkiye Green Fund aims to achieve a total equity amount of USD 405 million. This includes USD 100 million at the fund level and USD 150 million at the company level, in addition to the World Bank loan of USD 155 million.
Kerem Dönmez, General Director of Foreign Economic Relations of the Ministry of Treasury and Finance: “I believe that the Türkiye Green Finance Project will be a driving force in achieving our green development goals.”
Kerem Dönmez, General Director of Foreign Economic Relations of the Ministry of Treasury and Finance, said “In 2021, the Paris Agreement was ratified and 2053 net-zero emissions target was announced, launching the Green Development Revolution in our Country. Transitioning to a net-zero emissions economy requires significant and long-term investment. In this regard, it is very important to mobilize private sector financing as well as public financing. In this context, the financing provided by the World Bank and its implementation by TSKB will allow for the Türkiye Green Finance Project to become a driving force in achieving our green development goals. Moreover; the project will create significant new venture capital investment opportunities and contribute to the development of our capital markets. In the coming period, we will continue to establish strong collaborations with the World Bank and our other development partners in supporting our country's green transformation."
World Bank Türkiye Country Director Humberto Lopez: “The Green Finance Project will support the transition to a low-carbon and climate-resilient economy”
Humberto Lopez, IBRD Managing Director for Türkiye, said: “The Green Finance Project will ultimately support the transition to a low-carbon and climate-resilient economy, contribute to financial sector diversification and support the development of domestic sources of long-term finance, capital markets, and job creation. Through the proposed structure and the focus on capital markets instruments, the project has significant potential to crowd in private capital and create markets”
TSKB CEO Murat Bilgiç: “We are committed to supporting companies across Türkiye in their green transformation journey through capital investments”
TSKB CEO Murat Bilgiç provided insights into the agreement, stating, “We are set to establish the Türkiye Green Fund, a venture capital investment fund, in collaboration with Maxis Girişim Sermayesi Portföy Yönetimi A.Ş. using a USD 155 million loan from the World Bank, backed by the Ministry of Treasury and Finance guarantee. Under this model, on which we have been working meticulously with the World Bank for a long time, we will support companies in the process of green transformation across Türkiye through capital investment. Under this fund, we aim to increase the diversity, amount and, most importantly, the multiplier effect of resources for climate finance in our capital markets.We would like to thank the Ministry of Treasury and Finance of the Republic of Türkiye and the World Bank for their trust in TSKB and valuable cooperation, which enabled the establishment of the fund that will increase the diversity, quantity and, most importantly, the multiplier effect of resources for climate finance in our capital markets."
“We aspire for the project size to reach USD 405 million”
Indicating that as part of the Türkiye Green Fund, their goal is to secure an additional USD 250 million of private sector capital at the company level, thereby elevating the overall project size to USD 405 million, TSKB CEO Murat Bilgiç said, “The Türkiye Green Fund will contribute to the development of strategic planning for the companies it invests in, such as the management of commercial risks within the purview of both national and international legislation through equity financing, upholding competitiveness and facilitating focused and balanced borrowing in alignment with the transition toward a low-carbon economy. This will allow our companies to access a more focused and balanced borrowing structure in line with this roadmap. To effectively align company strategies with Türkiye’s Net Zero emission targets, the Türkiye Green Fund will implement ESG (Environmental, Social, and Governance) systems, set targets and initiate reporting practices within the invested companies. This project, unique in the venture capital investment fund market, will emphasize inclusivity as a supportive element within the climate framework and prioritize equal opportunities.”
“The Türkiye Green Fund will be the first venture capital investment fund in Türkiye and in the world dedicated to green and inclusive transformation, financed through loans”
Murat Bilgiç emphasized that TSKB is not only an important actor in the fight against climate change and decarbonization but also actively contributes to regulations, adding, “We consider the work and roadmaps of our regulatory bodies, including our Ministries, BRSA, and CMB, in areas such as the Emissions Trading System, Climate Law, and National Taxonomy, to be very important, especially in the context of our Nationally Determined Contribution. The 12th National Development Plan provides us with a tangible direction for the period 2024-2028. The Türkiye Green Fund will create an ecosystem that contributes to Türkiye’s green transformation and also addresses investment needs in this domain, incorporating an inclusive consideration of the impacts of climate risks in its outputs. I would like to emphasize that this fund will be the first venture capital investment fund in Türkiye and in the world dedicated to green and inclusive transformation, financed through loans. While thanking our Ministry of Treasury and Finance and the World Bank for their trust in our Bank, I would like to note that as TSKB, we are committed to making meaningful and diverse contributions to Türkiye’s sustainable development goals, leveraging innovative funds like the Türkiye Green Fund.”
