Turkey's SMEs Get Energy Efficiency Leasing OpportunityFriday 5th May 2017
FMO, the Dutch development bank and IFC, a member of the World Bank Group are providing a loan to leading Turkish leasing company Finans Leasing for improvements in SME energy efficiency.
The lending is aimed at SMEs to invest in eco-friendly projects, cut production costs, and protect the environment.
IFC (International Finance Corps.) is extending a five-year loan in Turkish lira, equivalent to $50 million, to Finans Leasing. FMO is providing an additional loan in Turkish lira, equivalent to $35 million.
The financing will support Finans Leasing’s sustainable energy program, which provides businesses with energy-efficient equipment and machinery, supports production line upgrades, and promotes renewable energy. Finans Leasing plans to increase its energy efficiency lending by 35% percent in the next three years.
Metin Karabiber, General Manager of Finans Leasing, said: “Working once again with our strategic partner IFC, with the participation of FMO, we aim to finance the energy efficient investments of our SME clients that want to increase their productivity while decreasing their costs. While our customers benefit from long-term funding in local currency, the financing also helps preserve the natural resources of our country.”
About 60% of Turkey's power currently comes from fossil fuels and 60% of the country's production relies on imported energy. To change this, Turkey needs to increase capacity, but also invest in energy efficiency. Turkey adopted a wide-ranging energy efficiency law in 2007, laying the groundwork for a series of energy-efficiency-focused policies.
Manuel Reyes Retana, Regional Head of IFC's Financial Institutions Group in Europe, the Middle East, and North Africa, said: “In Turkey, the biggest challenge SMEs face when it comes to investing in energy efficiency is a lack of long-term funding. Only 27% of commercial bank loans go to SMEs. We have established a strong track record of working with leasing companies in Turkey, who are instrumental in helping SMEs to use sustainable energy financing and invest in energy-efficient equipment.”
Energy efficiency has been a key focus for IFC in Turkey. SMEs make up about 90% of Turkey’s economy and helping them become more energy efficient will decrease carbon emissions, increase eco-friendly production processes, and spur growth in the long term.
Friday 5th May 2017