Turkey is key market for Asian investment bank AIIB: Official
Kıvanç Dündar - ISTANBUL
Turkey is a key market for the Asian Infrastructure Investment Bank (AIIB) and offers huge potential for investing in energy and transport connectivity, Joachim von Amsberg, AIIB Vice President for policy and strategy at the AIIB, has told Hürriyet Daily News in an interview.
“AIIB’s board of directors has approved up to $800 million in financing to date for two projects: The TSKB Sustainable Energy and Infrastructure On-lending Facility and the Tuz Gölü Gas Storage Expansion Project,” von Amsberg said, adding that Turkey is AIIB’s third largest investment market.
“And we see many additional investment opportunities in Turkey.”
Besides the already approved projects, the AIIB is currently reviewing an up to $100 million investment in the Development and Investment Bank of Turkey’s (TKYB) Renewable Energy and Energy Efficiency On-Lending Facility, according to von Amsberg.
The bank executive said that they recently held an event in Istanbul where they reached out to potential investment partners in energy, transport and sustainable cities.
“We found Turkish investors and businesses to be very receptive to working with us on future projects within these sectors.”
According to von Amsberg the AIIB sees a lot of potential for investing in renewable energy and energy efficiency as well as transport connectivity across Turkey’s European and Asian neighbors.
However, he also noted the bank’s Asian Infrastructure Finance report, released in January, identified infrastructure construction activity in Turkey looks likely to decrease, as there is significant downside risk for the overall construction sector, among other challenges.
The projected recent depreciation of the Turkish Lira, coupled with the country’s heavy reliance on imports for construction materials and the projected flat prices of industrial raw materials is likely to lead to construction costs increasing, according to von Amsberg.
Yet, he said, there continue to be many long-term infrastructure investment opportunities in Turkey despite recent market uncertainty and short-term challenges.
“Turkey’s relatively developed financial markets, as well as public-private partnership [PPPs] model, can help the private sector sustain infrastructure investment through a challenging environment,” the bank executive said.
The AIIB is a multilateral development bank with a mission to improve social and economic outcomes in Asia.
Headquartered in Beijing, the bank began operations in January 2016 with 57 founding members and it has now grown to 93 approved members worldwide.
To date, its president and board of directors have approved 7.62 billion dollars in financing for 36 projects in 13 countries, including Turkey.