Agence Française de Développement
TURKEY
Passengers walking alongside Haliç metro station on the Golden Horn, Istanbul © Mathias Depardon
AGENCE FRANÇAISE DE DÉVELOPPEMENT
TURKEY
Turkey With a population of 77 million inhabitants, GDP at USD 800bn (making it the 18th largest economy in the world in 2014) and annual per capita income higher than USD 10,000, Turkey is experiencing remarkable economic and social development. It is an emerging power in the Euro-Mediterranean region, as well as a member of the OECD and “G20” Economic Forum (Presidency in 2015), and a candidate for EU membership. The country is located in a strategic position at the crossroads of Europe, Asia and the Middle East. In order to meet the challenges posed by employment, energy and the environment, combined with marked regional disparities, Turkey has embarked on a path of more inclusive and low-carbon growth, fully integrating the place of people in society.
AFD’s commitments in Turkey (2005 - 2015 in EUR M)
The country ratified the Kyoto Protocol in 2009, has adopted a strategy to combat climate change, and renewed its commitment to sustainable development at the United Nations Rio+20 Conference.
Forestry
Small and mediumsized enterprises
Other
125 300
Agriculture
The cooperation between France and Turkey is based on a long-standing relationship, close consultation on the major issues of international and regional agendas, and significant levels of trade. A framework agreement on bilateral cooperation for environmental protection was signed in 1996.
100 392
Urban Development
350
527 Energy Efficiency/ Renewable Energy
AFD’s Strategy in Turkey AFD’s action in Turkey is part of its regional operations framework in the Mediterranean region and contributes to strengthen the French-Turkish partnership on climate and environmental issues. The aim is to provide joint responses to preserve Mediterranean ecosystems and limit greenhouse gas emissions. AFD has identified 4 priority areas for its operations in Turkey in the strategy for 2014 - 2017: ■■ Supporting sustainable urban development; ■■ Supporting businesses to adapt to changes in the economy; ■■ Preserving and developing natural resources; ■■ Promoting equal access to employment. AFD’s operations in Turkey were initially limited to a non-sovereign mandate and have been developed through banking intermediation and financing for municipalities. The aim is to support small and medium-sized enterprises (SMEs), disseminate corporate social responsibility (CSR) practices, promote energy efficiency and renewable energies and foster sustainable urban development.
Wind Power Plant of SARES Company in the Çanakkale region © Mathias Depardon
AGENCE FRANÇAISE DE DÉVELOPPEMENT
TURKEY
In 2011, AFD’s mandate was extended to include sovereign loans and its financing now supports the implementation of Turkey’s forestry policy. AFD Group consequently operates in the public sector (central government, State-owned companies and banks, local authorities) and in the private sector (banks and companies) through its subsidiary PROPARCO. It has a wide range of financial instruments tailored to the projects and partnerships that are established: loans – sovereign and non-sovereign, direct or intermediated, medium and long-term, on preferential terms, in local or foreign currency – equity investments, expertise and capacity building funds. Grants can be mobilized on an ad hoc basis to finance studies and provide technical assistance for projects. AFD also gives its partners the opportunity to use a guarantee mechanism (ARIZ). Finally, AFD seeks to promote exchanges and partnerships between French, Turkish and Mediterranean actors. It mobilizes French expertise, supports decentralized cooperation activities between Turkish and French cities, and creates networks among civil society actors. It involves its Turkish partners in regional cooperation activities. In 2015, AFD is celebrating the 10th anniversary of its presence and commitment in Turkey. During this period, AFD Group has allocated some EUR 2bn of financing in the country.
Supporting sustainable urban development In a context of rapid urban growth and ongoing decentralization process, Turkish municipalities are key partners in ensuring more balanced and sustainable urban development. Local authorities’ investment needs for environmental infrastructure are estimated as very important. AFD directly supports local authority investment programs with the aim of improving the quality and a ccessibility of basic facilities and services (water, waste, transport, energy…), while respecting the environment. AFD’s partnership with the banking sector also provides financing tailored to medium-sized municipalities conducting projects that have a strong social and e nvironmental benefit.
Measurable impacts
86,000 tons
of CO2 equivalent saved every year thanks to the development of the Istanbul metro (estimates).
364,000 tons
of CO2 equivalent saved every year thanks to the financing of Izmir’s maritime and urban transport policy (estimates). Since 2008, the partnership with Denizbank, a private Turkish bank, has financed the investment projects (transport, water and waste) of over 100 small and medium-sized municipalities. An awareness-raising program on sustainable urban development (study tours, training, conferences, etc.) has also been implemented for Turkish municipalities.
Supporting sustainable urban transport policies Metropolitan municipalities of Istanbul and Izmir lead a pioneering approach through the development of their strategic urban plans to improve the quality of life of their inhabitants and to ensure balanced development of their territory. AFD has supported the development of the Istanbul metro network through the financing of the M2 line (Haciosman-Yenikapı) which helped to improve urban transport between different parts of the city (business centers, residential areas, historic sites, cultural centers, etc.) by also reconciling urban development and historical heritage in the context of developments around the Yenikapı station.
Workers on the construction site for the City of Izmir’s new tram line © Mathias Depardon
AGENCE FRANÇAISE DE DÉVELOPPEMENT
TURKEY
Solar panel project in Denizli in the Aegean region © Mathias Depardon
AFD is also supporting Izmir’s transport policy through the financing provided for the upgrading of its maritime transport network, the construction of two new tram lines located along the city’s bay, and the extension of its subway network. These projects will improve urban transport in Izmir by providing more comprehensive and integrated services.
Developing a sustainable energy approach at local level Since the creation of new metropolitan municipalities (extended surface areas and broader competencies), AFD, in partnership with Expertise France, has set up technical cooperation which aims to promote energy efficiency and renewable energies in city centers. This program will identify financial needs through strengthening project development capacity.
Supporting businesses to adapt to changes in the economy SMEs are key for Turkish industry (Turkey has 3 million companies, over 99% of which are SMEs) and make a major contribution to the country’s growth (76% of paid employment and 50% of GDP). AFD offers them intermediated financing and high-quality technical assistance to allow them to develop, while respecting social and environmental standards and European standards.
Improving energy efficiency and scaling up renewable energy generation AFD supports SME investments in “innovative” renewable energies in order to contribute to the national policy of diversifying sources of supply and renewable energy development: solar energy, biomass, geothermal energy, as well as the most efficient processes (heat networks, co/tri-generation…). In addition, and still in line with national objectives, AFD supports companies that invest in improving their energy efficiency.
AFD has established a number of partnerships with Turkish banking operators, including Halkbank, TSKB and TEB, who are working to promote low-carbon growth. Between 2004 and 2015, AFD Group commitments in the energy sector exceeded EUR 520m.
Support investments in upgrading of SME standards In the context of their internationalization, Turkish SMEs are gradually seeking to respect international standards. Turkey is, at the same time, driven by the European Union membership process and has started to transpose part of the Community acquis related to companies complying with standards (sanitary, phytosanitary, environmental, etc.). AFD provides its support to allow Turkish companies to reach the highest standards. Ziraat Bankasi has become the main partner of AFD in the implementation of the modernization project of the Turkish agro-industrial SMEs.
AFD and climate change AFD has fully integrated climate change-related issues into its strategy and actions and is today a major and innovative actor in international “climate” finance. In line with this strategy, half the projects supported by AFD in Turkey have a positive impact on the fight against climate change. In 2009, AFD Group (AFD and PROPARCO) launched its Turkey-Climate program, in partnership with five local banks, which has led to EUR 350m of financing for energy efficiency and renewable energy projects. AFD has supported 168 projects, including 36 for renewable energies (solar, hydropower, wind, biomass), i.e. through them over 2.5 million tons of CO2 equivalent saved every year.
AGENCE FRANÇAISE DE DÉVELOPPEMENT
TURKEY
Preserving and developing natural resources Forests constitute a major natural and economic capital for Turkey: they cover roughly 28% of the country’s surface area and 7.5 million people (in 20,000 villages) live in or around these forests, who are mostly dependent on forests for their resources. In this context, AFD supports the activities of the General Directorate of Forestry (OGM) – through loans to the Turkish Undersecretariat Of Treasury – for afforestation, the rehabilitation of degraded forests and the combat against erosion and forest fires. In addition, a partnership between the Turkish General Directorate of Forestry and the French National Forestry Office contributes to the development of sustainable forest management and, more particularly, to climate change adaptation.
Measurable impacts Between 2014 and 2015, AFD contributed to the reforestation of some 380,000 ha, the restoration of some 310,000 ha of degraded forests and works to stem erosion on over 650,000 ha. These achievements should lead to an annual sequestration estimated at 9.5 million tons of CO2 equivalent for thirty years, i.e. a total of 285 million tons of CO2 equivalent over this period.
View from Simsirli Village. AFD supports Turkey’s policies on afforestation and combat against erosion since 2011 © Mathias Depardon
As a country covered by the waters of three seas, Turkey has immense coastline that are part of its natural heritage and must be protected. This is why AFD supports the management of marine protected areas through the grants of the French Fund for Global Environment (FFEM) and also supports the development of sustainable tourism, particularly in coastal areas. In 2013, with 35 million foreign visitors, Turkey was the 6th most visited country in the world and the 1st in the Eastern Mediterranean. Projections for the next 30 years show that tourist flows are going to double in the country by 2023, especially due to the boom in local and regional tourism. This will have a significant impact on natural resources, carbon emissions and energy consumption. In this context, AFD, in partnership with a local development bank, TSKB, provides financing to investors who wish to commit to sustainable tourism in Turkey. Finally, AFD acts on integrated water resources management, as well as on the protection of biodiversity and coastal and maritime areas.
Promoting equal access to employment The country has set an ambitious economic target: to be one of the world’s top 10 economies by 2023. To achieve this, one of the conditions is to increase women’s participation in the labor market (their participation rate is below 30%, i.e. the lowest among OECD countries). AFD’s strategy consequently consists in promoting gender equality in terms of opportunities to access to the labor market and contributing to reducing all types of barriers that women can encounter in the employment sector. AFD also seeks to develop activities for a better match between job and qualification of the workforce and offers its support to public and private initiatives in the field of professional training which is a lever for reducing unemployment and of youth inactivity.
AGENCE FRANÇAISE DE DÉVELOPPEMENT
PROPARCO, AFD’s subsidiary dedicated to private investment, promotes private investment in emerging and developing countries in order to boost growth, promote sustainable development and reach the Millennium Development Goals. It s financing is tailored to the specific needs of investors in the productive sector, financial systems, infrastructure and private equity investment.
www.proparco.fr
The French Facility for Global Environment / Fonds Français pour l’Environnement Mondial (FFEM) is a bilateral public fund initiated by the French Government in 1994. The FFEM secretariat and its financial management are entrusted to Agence Française de Développement (AFD). FFEM co-finances projects that encourage the protection of the global environment in developing countries. Its co-financing is exclusively via grants and is used for the implementation of pilot projects that combine environmental protection and economic development in the recipient countries. FFEM is an influential strategic instrument for the French policy on Official Development Assistance regarding global environmental protection. Its activities focus on the topics of biodiversity, international waters, climate change, land degradation and desertification, persistent organic pollutants and stratospheric ozone layer. By the end of 2014, FFEM had co-financed 275 projects with EUR 317m. Two‑thirds were earmarked for sub-Saharan Africa and the Mediterranean.
www.ffem.fr - ffem@afd.fr
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Creation: Planet 7 – October 2015
Izmir © Mathias Depardon
10-31-1482 / PEFC certified / This publication comes from sustainably managed forests and certified sources. / pefc-france.org
Agence Française de Développement (AFD), a public financial institution that implements the policy defined by the French Government, works to combat poverty and promote sustainable development. AFD operates on four continents via a network of 71 offices and finances and supports projects that improve living conditions for populations, boost economic growth and protect the planet. In 2014, AFD earmarked EUR 8.1bn to finance projects in developing countries and for overseas France.