EBRD European Bank for Reconstruction and Develo : 'Turkey, its private sector and the EBRD have done great things'

Delivered by:

Sir Suma Chakrabarti, EBRD President

Venue:

Istanbul, Turkey

Event:

Signing of EBRD-Turkey donor fund agreement

Introduction

Mr President, Deputy Prime Minister Şimşek, Excellencies, Ladies and Gentlemen, it is an enormous pleasure to be here with you today and to see so many friendly faces, so many EBRD clients, in the audience.

I said this yesterday when I spoke to TUSIAD.

But I will say it again today.

Turkey and the EBRD

Ever since we began investing Turkey - and that was less than a decade ago - this country has been one of the EBRD's star performers.

That investment now amounts to €10 billion.

We are extremely proud of what we have done to assist Turkey as its opens up its economy, drives sustainable growth and boosts the private sector.

Turkey has been our number one market since 2014.

Over the last three years, EBRD has invested €5.4 billion in the Turkish economy, with a record number of 137 projects.

Last year all but one of those projects were in the private sector.

Indeed, 97% of our Turkish portfolio is in that private sector.

Our 5000^th project since we were established in 1991, signed at the end of last year, was Turkish, a resource efficiency loan to a chocolate and snacking manufacturer.

Many, many people have contributed to this success story.

Some of them are here today so I want to thank them personally for everything they have done to make it happen.

First of all, I need to express our heartfelt gratitude to President Erdoğan for everything he has done to further the cause of reform and help us fulfil our mission here.

Thank you, Mr President.

Deputy Prime Minister Mehmet Şimşek and, before him, Ali Babacan, have been closely involved in the Turkey-EBRD relationship for many years.

Mehmet Bey was Finance Minister when Turkey became one of our Countries of Operations back in 2009 and has been a huge supporter of what we do and what we stand for ever since.

Thank you for that.

And I should also say a few words about our Governor, Treasury Undersecretary Osman Çelik, and our Alternative Governor, Deputy Treasury Undersecretary Raci Kaya.

Both of them have been tireless supporters and advocates of the EBRD and its projects here.

Thank you both.

An even closer relationship

Ladies and gentlemen, I have already hailed Turkey as one of our star performers.

Our relationship with you has both depth and breadth.

We invest in many, many different sectors and are present across the country, with offices in Istanbul and Ankara and total staff on the ground of over 80 people.

But today we celebrate taking the EBRD-Turkey relationship to a whole new level.

Today we sign a historic donor fund agreement with our Turkish friends, one that will allow us to do much more both in Turkey and in some of our other countries.

We have worked with donors ever since the Bank's creation, when Turkey was one of our founding shareholders.

But our relationships with our donors have grown in size and importance.

Indeed, donors have today become an essential part of the EBRD's way of doing business.

Their support is often the difference between a project being launched - or not.

Blended finance is particularly relevant because it helps us to address market failures and transaction cost burdening the strategic sectors and technologies we want to promote.

Purely commercial financing in the countries where we work would not allow us to drive innovation, sustainable development or inclusion at the pace today's social and environmental challenges require.

By combining EBRD commercial financing with donor funds, we can partially cover project risks, reduce the cost of funding and provide technical assistance to the clients and the sectors which need it most

What makes today's agreement historic is the fact that

1. This is the first bilateral donor agreement ever signed between the Turkish Republic and an International Financial Institution.

Turkey is a generous donor country already but most of its activity in this area is at the government-to-government level.

We are delighted that it should choose us as the first IFI it wants to do business with in this way.

This says a lot about the trust and mutual respect we feel for each other.

1. And there is one more reason why this agreement is special, if not unique.

Under its terms, Turkey, one of our countries of operations, will channel a significant volume of grants not just to itself, but to others, in this case Azerbaijan, the Kyrgyz Republic and Romania.

Some of the other countries where we work do this already.

But Turkey is being very generous.

And also very modern in the way this agreement has been designed, so that we can work effectively together and minimise red tape.

Turkey today joins the Bank's growing donor community and will help us shape the way we work together.

We look forward to welcoming Turkey at our Donor Meetings: in Jordan, at the time of our next Annual Meeting, and in London, later in the year.

Where the donor funds will go

So where will these grants actually go?

One area that will benefit from it will be our new integrated innovation framework.

Another possible area will be the next generation of our Women in Business programmes.

It is worth noting that our Turkish Women in Business programme passed a major milestone last year when its financing and advice reached 15,000 companies led or owned by women - in 87 out of the country's 89 provinces.

This is making a huge difference in promoting inclusion, an important priority for all our economies, and advancing the cause of gender equality.

I should also mention in passing that today's donor agreement is NOT the first instance of donor support for our work from Turkey.

The Ministry of Labour and Social Security, alongside the European Union, have provided critically important funds for our innovative Women in Business programme in Turkey, for which we continue to be very grateful.

Overall, through these new donor funds that are being made available by today's signing, we will be able to unlock significant investment resources for the benefit of our clients and the wider population here in Turkey and elsewhere.

Tens of thousands of SMEs have already benefited from out credit lines, direct investment and advisory services.

This is particularly relevant in less developed regions, which are the destination of many of the technical cooperation funds we manage.

These new donor funds will help us do even more in this field and thereby speed the transition towards sustainable growth powered by innovation and towards a knowledge-based economy.

We will work in many other areas too.

The new funds will help build strong, resilient and effective financial sectors in Turkey and beyond.

Turkey has excelled in climate financing.

Back in 2010 we launched MidSEFF here, at €1.5 billion our largest credit line for mid-sized investments by the private sector in renewable energy and energy efficiency.

We have also financed almost half Turkey's geothermal capacity, including geothermal field exploration, making the country a world leader in such technology.

Indeed, half of all our projects here last year promoted energy and resource efficiency or renewables.

Thanks to these new funds we now see great potential for going beyond the traditional areas of energy efficiency and renewable energy, and allowing the financing of a wider range of resource efficiency investments, including water efficiency, material efficiency and waste minimisation.

This would be done in line with objectives of the New Energy Efficiency Action Plan that is itself the fruit of our policy reform efforts.

Conclusion

Ladies and gentlemen, I would like to thank everyone who has worked so hard to launch this new donor fund

It is, indeed, a historic agreement.

And rest assured, we will do our level best to make the best use of your resources.

Together, Turkey, its private sector and the EBRD have done great things in the past.

The document we are about to sign will allow us to achieve even more - and to have many further successes in the future.

Thank you very much.