To support green infrastructure development in Türkiye

The Project encompasses a sovereign-backed partial debt guarantee (PDG) with a maximum guaranteed amount of USD200 million or equivalent from AIIB to help Türkiye İhracat Kredi Bankası A.Ş. (Export Credit Bank of Türkiye, or Turk Eximbank, or the Borrower) raise long-term private sector funding to support green infrastructure development in Türkiye. With support from AIIB’s PDG, Turk Eximbank intends to raise a green loan of up to USD285.7 million or equivalent from international banks (the Guaranteed Lenders). It is expected that 100 percent of Component A will qualify as climate mitigation finance. This will be the first green loan for Turk Eximbank. Ministry of Treasury and Finance (MoTF) will provide the sovereign counter-guarantee to AIIB in the Indemnity Agreement.

AIIB’s Environmental and Social Policy (ESP) including Environmental and Social Exclusion List (ESEL) and Environmental and Social Standards (ESSs) will apply to this Project. The Project has been placed in Category FI, the Environmental and Social Management System (ESMS) of Turk Eximbank follows the OECD common approaches, including a common list of illustrative category A and B projects and Environmental and Social Due Diligence (ESDD) that refers to IFC Performance Standards and World Band Group EHS guidelines.
The loan facility supported by AIIB PDG will be on-lent to eligible sub-borrowers to purchase solar, wind and energy efficiency equipment. Turk Eximbank will allocate a portion of the funding to support women-inclusive enterprises. Activities included in AIIB’s ESEL will not be eligible for financing. The project will further exclude activities purposed for supporting the expansion of production, transportation, and use of oil and natural gas. Category A sub-project and higher risk Category B activities will be excluded. In addition, all sub-projects will be carefully screened against potential risk of land acquisition and involuntary resettlement risk under the E&S assessment model, and any sub-project that triggers ESS2 will be excluded.
The ESMS of Turk Eximbank includes (i) screening the proposed loans against its environmental and social (E&S) exclusion list, (ii) assigning an E&S categorization at borrower level and lending activity level, (iii) conducting an E&S assessment, (iv) monitoring E&S risks and impacts and (v) disclosing relevant E&S information to stakeholders and (vi) reporting to its management accordingly. A Project Operation Manuel will be prepared for the Project to align the project ESMS practice with AIIB ESP and ESS requirements. The existing corporate level ESMS is materially align with AIIB ESP.
The ESMS of Turk Eximbank includes requirements to identify and mitigate potential health, safety, social and environmental hazards in all Project activities that pose a risk to employees and may also have the potential for disruption of site works. In addition, Turk Eximbank has been advised of the importance of implementing an appropriate supply chain review to identify and address issues related to the solar sub-projects, including labor and working conditions and health and safety matters.
Turk Eximbank disclosed on its website the Environmental and Social Impact Policy, Climate Change Adaptation, and Mitigation Policy. Turk Eximbank has further disclosed the ESMS overview with detail ES guideline, Categorization, and ESDD approach. At the institution level, Turk Eximbank has published an annual sustainability report which is prepared in accordance with the Global Reporting Initiative (GRI) Standards requirements.
The ESMS of Turk Eximbank requires that it addresses third-party views, enquiries or concerns regarding its own E&S processes and outcomes, as well as E&S impacts and performances of its portfolio loans. Turk Eximbank has disclosed its External Communication Mechanism (ECM), which will be enhanced to meet AIIB’s ESP requirements. Turk Eximbank will require the sub-borrowers to establish Grievance Redress Mechanism (GRM) that are commensurate with the environmental and social risks of the sub-projects. Provision will also be made to inform Project-affected people and Project workers of their availability, including Turk Eximbank’s ECM and AIIB’s Project-Affected People’s Mechanism (PPM).
During Project implementation, Turk Eximbank will be required to maintain a comprehensive database comprising all relevant E&S information, and report to AIIB a summary of the E&S aspects and overview of the E&S performance of the Project’s portfolio annually. In addition, it is anticipated that AIIB will retain the right to review all sub-loans and conduct supervisory visits, including visits to the sub-borrowers, when it deems appropriate.
Huaixue Fu
Senior Investment Officer, Financial Institutions and Syndications
Pınar Çalışkan
Head of Funding
Home Projects Project Summary Project List Project Details Türkiye: Turk Eximbank Green Infrastructure Support Project (Component A of the previously Türkiye: Turk Eximbank Green Infrastructure Support and Earthquake Response Project)
The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank whose mission is financing the Infrastructure for Tomorrow—infrastructure with sustainability at its core. We began operations in Beijing in January 2016 and have since grown to 109 approved members worldwide. We are capitalized at USD100 billion and Triple-A-rated by the major international credit rating agencies. Collaborating with partners, AIIB meets clients’ needs by unlocking new capital and investing in infrastructure that is green, technology-enabled and promotes regional connectivity.
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