World Bulletin/News Desk
Although Turkey has made significant progress with regards democratic reforms and economic growth in recent years, structural challenges still remain an issue, something which the European Bank for Reconstruction and Development (EBRD) plans to address by providing finance and assistance while keeping sustainable energy its focus in the country with the investment of over 1 billion euros in the energy sector.
In accordance with the EBRD's focus areas in the country, which include a sustainable and efficient energy sector, developing mid-sized businesses in underdeveloped regions and supporting rural municipalities strengthen their infrastructure, the EBRD's investments are aimed at reducing energy costs by being more energy efficient, helping profits and competitiveness and assisting industry and economies to grow as well, says Sir Suma Chakrabarti, EBRD president.
The EBRD, which is the largest investor in the region in which it operates, which stretches from Central Europe to Central Asia and to the southern and eastern Mediterranean area, hopes to promote green growth in Turkey as the country's economy presents challenges regarding energy consumption, which is expected to double in the next 10 years. Turkey imports 75 percent of its energy needs, and increasing industrialization and urbanization in line with economic growth also bring opportunities for sustainable energy investments.
The ERBD sees the need for urgent action, and the bank has invested 44 percent of its investment portfolio in sustainable energy since 2009. Looking at the general picture, funds were distributed among borrowers, as 66 percent of investments were in providing financing to sustainable energy credit lines, 16 percent were in renewable energy, 13 percent were for municipal infrastructure energy efficiency and 4 percent were for in industrial energy efficiency while 1 percent went towards clean energy production.
Chakrabarti calls heavy investments in sustainable energy projects a very good business reason to improve the planet as such investments reduce energy use. The EBRD's Turkey Sustainable Energy Financing Facility (TurSEFF) lends to businesses and households via five local commercial partners.
The funds are used to support the participating banks in developing energy efficiency financing instruments and to help sub-borrowers design and implement such projects, as well as to increase the awareness of the benefits of sustainable energy investments.
For example, ODE Yalıtım, which manufactures insulation materials, had received financing from the EBRD to purchase new equipment that allows the company to use less energy while maintaining production levels and releasing fewer pollutants into the atmosphere. ODE Yalıtım also uses the EBRD financing to pay for insulation work to be carried out for households via interest free installment payments. Turkey reaps the benefits of the financing as around 30,000 families across the country have reduced their energy bills by an average of 40 percent through this scheme.
In response to the market potential for financing in renewable energy, the EBRD also developed the Mid-Size Sustainable Energy Financing Facility (MidSEFF) to extend loans worth 1 billion euros aiming at promoting mid-size renewable energy as well as corporate and municipal infrastructure energy efficient projects. In addition, it provides technical assistance to both local banks and project sponsors for the development of these projects.
One project that benefited from the MidSEFF financing is the Gümüşkӧy Geothermal Power Plant in Aydın province, in Turkey's western Anatolia region. The 13 MW geothermal power plant will become operational in July 2013 and will generate 85 GWh of clean baseload energy per year, preventing the release of more than 50,000 tons per year of carbon dioxide emissions into the atmosphere.
Meanwhile, other projects that received loans from the EBRD range from a massive light railway project in the province of Bursa to a wastewater treatment project in the southern province of Mersin as well as loans to farmers to purchase equipment and financial support for women entrepreneurs.Last Mod: 10 Mayıs 2013, 10:20