European Bank for Reconstruction and Development (EBRD) President Odile Renaud-Basso stated that the bank’s investments in Turkiye this year will exceed €2.5 billion and said, “We have always kept our investments in Turkiye very high and we will continue to invest.”
As part of his visit to Turkiye, after the introductory meeting of EBRD’s Women and Climate Finance Report, Renaud-Basso answered the questions of the AA correspondent regarding the developments in the Turkish and world economy and the bank’s investments in Turkiye.
Reminding that while the global economy was recovering after the Covid-19 epidemic, it faced difficulties caused by the impact of the war in Ukraine, the energy crisis and inflation, Renaud-Basso stated that significant changes have been seen in monetary policy around the world and the effects of these changes are beginning to be felt on economies.
Renaud-Basso stated that the European economy has started to slow down now, but the US economy is a little more resilient, and said: “However, we see that interest rates will remain high for a while. Inflation is falling in Europe and the USA, and this is a good indicator. However, we must wait until the end to see if this decline is sustainable. Therefore, we expect interest rates to remain high until central banks reduce inflation to targeted levels.”
“The change in monetary policy in Turkiye is correct and should be sustained”
Stating that the changes in monetary policy and macroeconomic policies in Turkiye are in the right direction and should be continued, Renaud-Basso said, “We are worried about macroeconomic imbalances and high inflation. In this respect, I think it is very important to continue the change in monetary policy until inflation is reduced. On the other hand, it is a positive situation that the Turkish economy and the private sector are very resilient.”
Stating that Turkiye has become the country in which the bank invests the most, Renaud-Basso said, “This year will be an extraordinary year again. We predict that our investments in Turkiye this year will exceed €2.5 billion. We are currently at a volume of €2.4 billion and we expect this amount to exceed €2.5 billion in the remaining two months of the year.”
Stating that 93% of their investments are in the private sector, including companies, manufacturing sector and financial institutions, Renaud-Basso explained that they attach importance to financing SMEs, green transformation and supporting women-led businesses.
Renaud-Basso also stated that they are working with municipalities to develop green infrastructure.
“One of our priority areas is green transformation”
Noting that 50% of the bank’s investments are made in green transformation projects, Renaud-Basso said that they are working with the private sector to contribute to the decarbonization of carbon-intensive sectors, especially steel and cement.
Stating that EBRD investments are shaped by demand, Renaud-Basso said, “Therefore, we do not have an annual target. However, we have always kept our investments in Turkiye very high and we will continue to invest. We see that there are many investment opportunities and we want to continue our support to our customers and the country. One of the priorities for us in these investments is green transformation. There is a lot of work to be done in this field and we think we can contribute.”
Reminding that they have launched a €1.5 billion program for the earthquake zone for 2023 and 2024, Renaud-Basso added that €700 million of this amount has been implemented and the remaining part will be completed in 2024.
EBRD’s highest annual investment in Turkiye
According to EBRD data, the investment, which the bank predicts will exceed €2.5 billion this year, will be the highest investment in Turkiye on an annual basis.
The bank’s previous highest investment in Turkiye on an annual basis was recorded in 2021 with €2 billion. Last year, EBRD’s investments in Turkiye amounted to €1.63 billion.
EBRD’s total investments in Turkiye exceeded €19 billion.
Source: Trthaber / Prepared by Irem Yildiz