EBRD makes $55M loan to Turkey's Garanti BBVA
The European Bank for Reconstruction and Development (EBRD) on May 20 announced a $55 million loan to Garanti BBVA, the second-largest private lender in Turkey.
The fresh boost to Turkey's banking sector amid the novel coronavirus pandemic by the EBRD was complemented by a $50 million loan from the International Finance Corporation (IFC), a member of the World Bank Group, according to the EBRD's statement.
"We are pleased that Garanti BBVA will channel EBRD funds to companies that have been impacted during this period of volatility caused by the coronavirus outbreak," said Arvid Tuerkner, EBRD Managing Director for Turkey.
Recep Bastug, Chief Executive Officer of Garanti BBVA, thanked the EBRD and IFC, noting that the bank would now be able to provide greater support to small and medium-sized enterprises affected by the virus.
With the loans, Garanti BBVA has raised a record $594 million from international commercial banks, with the financing to be linked to the bank's environmental sustainability practices.
As part of the syndication agreement, the bank is committing to no longer financing greenfield power plants, as well as sourcing 80% of the electricity it consumes from renewable sources.
Meeting or outperforming these targets will enable Garanti BBVA to obtain a margin benefit, while falling short will lead to a penalty.
The EBRD is a major investor in Turkey.
Since 2009, it has invested €12.4 billion ($13.6 billion) through 311 projects in various sectors of the country's economy.