The loan under the Türkiye Green Export Project is granted for 10 years

Turk Eximbank has received a €1 billion commercial loan guaranteed by the World Bank to help Turkish exporters adapt to the new European Cross-Border Carbon Adjustment Mechanism (CBAM), Global Trade Review reports.

The 10-year loan under the Türkiye Green Export Project is provided by Deutsche Bank, Standard Chartered, BNP Paribas and ING, and was signed in early May. Turk Eximbank, the government-backed lender, said the deal is its largest ever borrowing operation.

The International Bank for Reconstruction and Development (IBRD), one of the institutions of the World Bank Group, is providing a €600 million first loss guarantee to the lenders, the Turkish bank said in a statement. The deal is the first time the IBRD has supported a loan for green exports. The Turkish Ministry of Finance and Treasury also provided counter-guarantees.

The proceeds will be used to provide financing to exporters who will be affected by the introduction of CBAM. The loan will help them to produce environmentally friendly products and support the use of renewable energy sources, investments in energy efficiency and working capital needs.

“We give great importance to ensure access to favorable financing conditions for Turkish Exporters who are the driving power of our economy and to increase their international competitiveness by supporting their adaptation to European Carbon Border Adjustment Mechanism (CBAM). I believe Türkiye Green Export Project that is developed for this aim will lead our exporter’s green transition, create new job opportunities and support our country to reach its 2053 net zero emission goal,” said Kerem Donmez, Director General of the Foreign Economic Relations Department of the Ministry of Finance and Treasury of Turkey.

Turkey, one of the EU’s largest trading partners, is trying to adapt to the new European rules. Last year, the government said that the national emissions trading scheme it was developing would help mitigate the impact of CBAM on the Turkish economy.

As GMK Center reported earlier, Europe’s cross-border carbon adjustment mechanism is prompting other countries to introduce their own border carbon charges, while others are considering retaliatory measures, according to a study by the International Emissions Trading Association (IETA).