The European Bank for Reconstruction and Development (EBRD) has lent US$110mn to Akbank for onlending to companies investing in Turkey’s renewable sector.

The funds are extended as notes issued under Akbank’s diversified payment rights programme, a market instrument used by Turkish banks to raise capital market funding.

The facility is supported by Turkey’s Ministry of Energy and Natural Resources and through a €1.9mn grant from the European Union (EU). It will be used to finance renewable energy and resource efficiency projects in Turkey including solar, hydropower, wind, geothermal, waste-to-energy, water saving and waste minimisation projects.

The transaction is part of the EBRD’s mid-size sustainable energy financing facility (MidSEFF), which was recently expanded to €1.5bn. So far 47 projects have been financed through seven Turkish banks, helping to build over 800 MW of additional renewable energy capacity. The EU has provided €6.8mn in grant funding to the programme overall.

Akbank already received US$110mn through MidSEFF last year, and another US$110mn in 2011.

Noel Edison, director of financial institutions at the EBRD, says: “We are impressed with the response to the previous two rounds of financing we offered to Akbank under our MidSEFF programme. The lender has financed eight projects helping to create 73 MW in additional renewable capacity. The bank has a strong pipeline for further successful renewable energy and resource efficiency investments by Turkish corporates.”

Akbank’s executive vice-president of treasury, Kerim Rota, adds: “Akbank continues to be a pioneering force in the Turkish banking sector in providing fresh funding to the private sector for renewable energy and resource efficiency projects in our country. We firmly believe that our efforts will also help Turkey meet its growing energy demand with a positive spillover for the financing of the country’s current account deficit, as renewable energy generation will diminish its dependency on imported fuels while also addressing climate change.”

Almost half of the EBRD total portfolio in Turkey is in sustainable energy, with over €3bn invested in more than 75 projects since 2009.