A landmark new investment by IFC is aiming to boost access to finance for Türkiye’s SMEs–with a focus on women-owned smaller businesses and those helping the country adapt to climate change.
IFC is providing $75 million in subordinated debt financing, as part of a $300 million financing package, to Akbank T.A.Ş., a longstanding client, under the bank’s Sustainable Finance Framework. This marks IFC’s first subordinated debt financing in Türkiye compliant with Basel III requirements and the country’s Banking Regulation and Supervision Agency’s equity regulations. It is also IFC’s first such financing globally with proceeds earmarked for women-owned SMEs. The aim is to contribute to the bank’s solid capital base and help expand its lending to SMEs.
“Through our cooperation with IFC, Akbank will further boost Türkiye’s economy by giving women entrepreneurs and SMEs focusing on climate investments access to financing via this innovative Tier-2 instrument. With IFC’s trust in our credit and sustainability vision, we will navigate the current macroeconomic environment with confidence,” said Levent Çelebioğlu, Executive Vice President of Akbank’s Corporate and Investment Banking.
The financing is part of IFC’s strategy to build a more resilient financial system in Türkiye and boost climate financing. Türkiye is among the top 10 most energy-intensive countries in the OECD and increasing its energy efficiency is vital to ensure sustainable economic growth.
“Smaller businesses are essential drivers of growth in Türkiye, but many struggle to access the funds they need, especially in the current challenging economic climate,” said Wiebke Schloemer, IFC Director for Türkiye and Central Asia. “Our investment aims to address this pressing need while helping strengthen a long-standing client’s capital base with subordinated debt financing.”
IFC and Akbank have been partners since 2000 and previously cooperated in a number of areas, including climate finance, supporting smaller businesses in refugee-impacted regions, and green mortgages.
FC has supported private sector development in Türkiye for over 50 years and invested more than $11 billion in the last 10 years alone. Türkiye represents IFC’s third-largest country exposure globally, with a committed portfolio of close to $4.7 billion as of June 2023.