European financer plans to invest 1 billion euros in Turkey's economy

With an agenda focused on export-oriented industries and renewable energy, the European Bank for Reconstruction and Development has pledged nearly 1 billion euros in Turkish investment projects this year. Daily Sabah reports in its article European financer plans to invest 1 billion euros in Turkey's economy that the European Bank for Reconstruction and Development (EBRD) invested 1 billion euros ($1.14 billion) in a total of 34 projects in Turkey last year and the bank plans to invest the same amount this year, Arvid Tuerkner, the managing director for Turkey said.

Tuerkner emphasized that the EBRD remains strongly committed to the Turkish economy although 2018 was a challenging year with geopolitical tensions, economic slowdown and currency volatility.

"While planning investments, we act upon demand. Our investments will depend on the current demand for financing, the willingness of local and foreign investors to invest, the situation of capital markets and many other factors," he said.

Tuerkner indicated that the EBRD has boosted support for local currency denominated financing in Turkey and raised the share of local currency in overall investments in the country to one-third, noting, "The EBRD increased Turkish lira transactions, amounting to 228.8 million euros in 2017, to 331 million euros last year with 13 transactions."

Since 2009, the EBRD has invested over 11 billion euros in various sectors of the Turkish economy, with almost all investment in the private sector.

The bank's 7-billion-euro Turkey portfolio is the largest among the 38 economies where the bank invests.

Touching on the bank's investment priorities for 2019, Tuerkner said, "This year, we will focus on export-oriented industries, in addition to agriculture. We will continue to focus on renewable energy. We expect a new support mechanism to be created in 2020, when the existing support mechanism for renewable energy will end. This support mechanism should be based on market principles and enable Turkey to achieve the goals cited in the National Renewable Energy Action Plan."

Underlining that they aim for new financing to support woman entrepreneurs, Tuerkner said, "We will continue to focus on local currency financing and support innovation in the private sector. Our bank is also interested in its increasing share portfolio in Turkey."

Tuerkner also assessed the Turkish economy's outlook for this year, emphasizing that Turkey's strong foundations are obvious despite turbulence.

He continued, "Turkey's strategic geopolitical location is a blessing in terms of trade, and its climate and culture make the country a great tourist destination. Turkey has great expectation for tourism invigoration this year."

Indicating that demographics of Turkey is positive and half the population is under 30 years old, Tuerkner said, "The exceptionally entrepreneurial spirit of the people continues to nourish the country's developing private sector. Large and small companies are trying to innovate, grow at home and abroad, provide jobs and grow again."

Pointing to economic challenges, Tuerkner stated, "The economy will not break its stride in 2019. The banking system, which is often seen as the key anchor of the economy, is under stress. This may delay economic recovery. Turkey needs to create strong policy responses that will enable banks to access financing to maintain their economic activities. The decisive structural reforms to improve the business environment will help restore investor confidence."

According to Tuerkner, they expect Turkey's economic growth to increase as of the second half of the year.

"We foresee that there may be negative growth in two or three quarters this year. However, we expect economic growth to rise slowly in the second half of the year. We expect growth of 1 percent for Turkey in 2019. We expect inflation to start falling in the second half of this year. The challenge in the business environment will continue. However, our commitment to our work here in Turkey continues," he concluded.