World Bank approves €600 mn guarantee to support Turkish exporters

The Turkiye Green Export Project will help provide affordable, long-term financing for exporters to invest in green, climate-resilient solutions, such as upgrading machinery, equipment, and heating and cooling systems, as well as reducing or recycling waste.

As a producer of emission-intensive products, reducing the carbon footprint of Turkish exporters is particularly vital as the European Union (EU) begins imposing tariffs on carbon-intensive products from 2026. The EU market accounts for 40 per cent of Turkish exports. 

Turkish export firms are also large employers, employing about 37 per cent of the country’s workforce, underscoring the need for Turkish industry to be fit for purpose in a greener global trade market.

“The continued success of the export sector is crucial to Turkiye’s economy and its green transformation is a top priority for the government. The World Bank is delighted to support these efforts that will contribute to the global transition to a low-carbon future and at the same time to enhance the firms and country competitiveness,” said Humberto Lopez, World Bank country director for Turkiye.

Long-term financing is key for the investments that will ensure a smooth transition to a green economy, which in turn is needed to mitigate climate transition risks. The Turkiye Green Export Project will mobilise long-term commercial funding with a loan guarantee of up to €600 million to Eximbank to enable the raising of up to €1 billion in international private capital through commercial loans of about 10-year tenures, all of which for supporting exporters’ greening efforts. This financing will be more favourable in terms of maturity and costs compared to conventional market options, providing a much-needed impetus for exporters to reduce carbon emissions and boost green exports, the World Bank said in a press release.

“The project is a game-changer for private capital mobilisation to finance long-term, sustainable, and green economic growth. The guarantee instrument is also a market-oriented approach in supporting exporters to adapt to climate transition risks and take advantage of the opportunities offered by the increased demand globally for green products and services,” said Gunhild Berg, one of the World Bank project team leaders.

The project is a part of broader World Bank support for greening Turkiye’s industrial sector and economy to help the country achieve its goal of net-zero emissions by 2053. The World Bank is supporting green transformation in other sectors, including energy, transport, industry, urbanisation, agriculture, and water and forest management.

Fibre2Fashion News Desk (RR)