EU bank set to pump over 2.3 bln euros of financing into Turkey

EU bank set to pump over 2.3 bln euros of financing into Turkey

A senior representative from the European Investment Bank (EIB) said the lender plans to provide financing worth 2.3-2.5 billion euros to Turkey over this year, with small- and medium-scaled enterprises (SMEs) and vital infrastructure projects again being the main focus. 

Giant hospital projects and energy projects are also under the bank’s focus, the EIB’s country representative, Massimo d’Eufemia, told a group of journalists this week. 

Turkey is now the largest recipient of the bank outside of the European Union and the 7th largest among all financing recipients, according to figures from the bank. Over 90 percent of the bank’s operations are concentrated on the 28 EU members, which are its main shareholders. 

D’Eufemia explained the rationale behind the large funding into Turkey as the dynamism of the Turkish economy with around 80 million people, as well as the creation of eligible projects. 

“We will provide financing of between 2.3-2.5 billion euros in Turkey with a main focus on SMEs and infrastructure projects over this year,” he said, adding that the EU’s bank had provided 2.3 billion euros in financing in 2015 with an increase of over 10 percent from the previous year. 

D’Eufemia noted they were following the developments in Turkey and the region, as is the case elsewhere. 

The lender offered around 70 billion euros of financing within the EU, with Spain taking the lion’s share. The EIB’s non-EU loans amount to about 36 billion euros for various projects in countries in the Middle East, North Africa, Turkey and the Western Balkans. The EIB poured 23 billion euros into Turkey between 2005 and 2015, according to data. 

SMEs took the lion’s share of the fund inflow in Turkey, as they used over 42 percent of the bank’s financing, followed by the transport sector with around 22 percent and the energy sector with 10 percent, according to the EIB data.  Among the lender’s flagship transport projects are the Istanbul-Ankara high speed railway and the Eurasia Tunnel in Istanbul. 

D’Eufemia said the lender plans to offer financing to giant hospital projects in Turkey, which are made on the public-private-partnership model. The EIB already provided a 50-million-euro loan to be used in hospital project in the capital Ankara in May. 

“We also want to offer financing to the hospital projects in other provinces, such as the southeastern province of Gaziantep,” he said, adding they were also reviewing projects in the Aegean provinces of Bursa and Manisa. 

The EIB also wants to make more loans outside the 28-nation EU to help tackle the migration crisis and will present plans to European Union leaders at their next meeting in June.

“We are waiting for the June meeting of the council to take the required action,” he added. 

The EIB recently made seven loan agreements totaling more than 800 million euros for Turkish companies, mainly five lenders and SMEs. 

An 80-million-euro loan was given to Petkim to be used in increasing the capacity of the Petkim port in global container terminal standards as well as Ankara’s Etlik Hospital, among others. 

The lender also plans to offer around 1 billion euros of financing to the Trans-Anatolian Natural Gas Pipeline (TANAP) project, according to bank representatives.