Baku, Azerbaijan, Feb. 21
By Nigar Guliyeva - Trend:
The European Bank for Reconstruction and Development (EBRD) has invested the equivalent of $60 million in Turkish lira in a covered bond issued by Yapı Kredi Bank, Turkey's fourth-largest private bank.
The Bank reported that the Baa1-rated bond is backed by a portfolio of residential mortgages. Bonds of this kind are rare in the country’s banking sector and the EBRD’s investment in the issuance aims to support Turkey’s nascent covered bond market.
Proceeds from the EBRD’s investment will promote energy-saving improvements in the residential sector. Funds will be on-lent to individual homeowners and groups of homeowners, housing associations, condominium owners and cooperatives investing in greater resource efficiency of homes. Also eligible are private service providers in the residential sector, such as housing management firms, small and medium-sized enterprises, and vendors and installers of highly energy-efficient home improvement equipment and materials, for investment in energy efficiency and small-scale renewable energy projects in the residential buildings sector.
The investment is part of the EBRD’s dedicated Turkey Residential Energy Efficiency Financing Facility (TuREEFF).
The EBRD financing is being complemented by $ 15 million from the Clean Technology Fund (CTF), one of the Climate Investment Funds, which helps countries increase the use of low-carbon technologies with significant potential for long-term savings in greenhouse gas emissions. Concessional funding provided by the CTF will be on-lent alongside the proceeds of the bond issuance to further accelerate the uptake of resource efficiency investments by Yapı Kredi clients.
The EBRD is a major investor in the country. Since 2009, it has invested €10 billion in various sectors of the Turkish economy, with almost all investments in the private sector.
In 2017 alone, the EBRD invested €1.6 billion in 51 projects in Turkey. Almost a third of this financing was provided in Turkish lira.