World Bank approves $560 mln loan for sustainable cities

World Bank approves $560 mln loan for sustainable cities

World Bank approves $560 mln loan for sustainable cities

The World Bank’s Board of Executive Directors approved financing of 500 million euros ($561 million) to support sustainable development in Turkish cities.  This comes in the form of an “additional financing” (AF) to the Sustainable Cities 2 Project, the second in a series of projects under the Program for Sustainable Cities.

The first Sustainable Cities Project for $132.7 million was approved in December 2016 and the second Sustainable Cities Project for $91.5 million was approved in April 2018.

The program aims to improve the economic, financial, environmental and social sustainability of Turkish cities by enabling interested municipalities to access financing for their priority investments and to deliver improved services to their citizens, the World Bank said in a statement released on May 24.

“Turkey’s growing cities are faced with increasing climate and disaster risks requiring a broad range of sustainable and resilient infrastructure to provide services and improve the lives of Turkey’s citizens,” said Auguste Kouame, World Bank Country Director for Turkey.

“The World Bank Group has a long-standing engagement in Turkey’s urban sector, and we are happy to continue helping Turkey’s cities to expand and improve their service delivery through this additional financing to the second Sustainable Cities Project.”

The project will be implemented by İlbank to finance eligible subprojects in areas of urban resilience and sustainability and will have two components.

The Municipal Investments component (499 million euros or about $ 559.2 million) will be scaled up to finance demand-driven municipal infrastructure investments to improve access to quality, sustainable and resilient public transport, water and wastewater, solid waste management, energy efficiency and renewable energy, urban environments, municipal firefighting services, and social infrastructure and services.

The Project Management component (1 million euros, or about $1.12 million) will finance goods, consulting services related to day-to-day project management, monitoring and evaluation, reporting, and project communications.

The project fits within the Turkey Country Partnership Framework of the World Bank Group for the 2018-2021 period, which includes the strategic objective of improving the sustainability and resilience of cities through investments and technical assistance interventions, which coalesce around a public-private investment coordination approach, the World Bank said in the statement.

The project supports the maximizing finance for development approach of the World Bank and the International Finance Corporation (IFC), which is the private sector arm of the World Bank Group.

The project is also consistent with the Turkish government’s 10th Development Plan (2014–2018), particularly its “Livable Spaces/Sustainable Environment” pillar, which recognizes the challenges of rapid urbanization and maximizing its benefits for people and economy.

The lending instrument for the project is an International Bank for Reconstruction and Development (IBRD) Flexible Loan with a fixed spread and 30-year maturity, including a five-year grace period, level principal repayments and a commitment-linked repayment schedule.