The European Bank for Reconstruction and Development (EBRD) has provided $100mn in funds to Turkish private lender Denizbank to finance local companies’ investments in green technologies and support women-led businesses.
The financing was made available through an investment under its existing Diversified Payment Rights (DPR) programme, an established market instrument used by Turkish banks to raise long-term funding, the EBRD said.
Denizbank is planning to issue a total $435mn, marking its return to DPR securitisation under Emirates NBD Bank’s ownership. The issuance has attracted a host of investors, including the International Finance Corporation (IFC), Credit Suisse and Emirates NBD Bank.
Hakan Ates, DenizBank Financial Services Group CEO, said: “We believe that this deal will pave the way for new transactions in the Turkish market under DPR securitisation programmes backed by future flows. With its long-term maturity of up to seven years and competitive funding terms, this transaction is also a testament to the improving confidence in the Turkish economy.”
Jurgen Rigterink, EBRD first vice president, commented: “This is a landmark transaction on several accounts. First, it marks Denizbank’s return to its DPR programme under the Emirates NBD Bank’s ownership. Second, it allows the EBRD to provide new financing for women entrepreneurs and for green investments by smaller businesses such as those in renewable energy, resource efficiency, waste minimisation and water savings. And third, by joining forces with the EU, the Turkish Credit Guarantee Fund and the Ministry of Treasury and Finance, the EBRD and Denizbank will be able to achieve a greater impact of our financing.”
The EBRD funds for Denizbank will be equally split between the Women in Business programme to finance women-led SMEs and the Turkey Sustainable Energy Finance Facility programme in support of resource efficiency and small-scale renewable energy investments.
The European Union is supporting both initiatives with grant funding.
The EBRD’s new investment follows a record €893mn in financing provided to Turkish financial institutions in 2020 to support thousands of businesses across the country, providing the private sector with much-needed funds, the development bank said.
To date, the EBRD has invested almost €13bn in Turkey through 334 projects, 95% of which has gone into the private sector. In 2020, the development bank stepped up its financing in Turkey to €1.7bn from €1bn put into 35 projects in 2019.
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