AIIB Signs USD 200 Million Guarantee for Türk Eximbank’s Inaugural Green Loan

The Asian Infrastructure Investment Bank (AIIB) has made a significant stride by signing a USD 200 million guarantee to support Türk Eximbank’s inaugural green loan. Backed by a counter-guarantee from the Ministry of Treasury and Finance of Türkiye, this marks AIIB’s first partial debt guarantee on a commercial loan transaction.

The primary objective of this transaction is to bolster Türk Eximbank’s efforts in providing long-term financing to Turkish exporters engaged in renewable energy projects and initiatives aimed at improving energy and water efficiency. Notably, the project places emphasis on inclusion, particularly supporting enterprises with substantial female participation.

In a concerted effort to mobilize private capital and invest in green infrastructure, AIIB has successfully mobilized close to USD 300 million of 10-year private capital from top-tier international banks for this project. The loan is expected to fully qualify as climate mitigation finance.

Najeeb Haider, Director General of AIIB’s Investment Operations (Region 2) Banking Department, expressed delight over the groundbreaking transaction, highlighting AIIB’s strategic focus on leveraging innovative financial instruments to mobilize private capital for green infrastructure projects.

Türk Eximbank’s General Manager, Ali Güney, echoed the sentiment, emphasizing the significance of the facility in supporting exporters’ renewable energy investments and green transformation activities to reduce carbon emissions. Güney also underscored Türk Eximbank’s commitment to green principles, revealing plans for future green financing endeavors worth USD 1.2 billion.

Through the guarantee, AIIB aims to provide crucial credit enhancement to Türk Eximbank, enabling the mobilization of long-term private capital and unlocking capacity for international banks under challenging market conditions. The guarantee structure includes tranches in both Euro and USD, featuring a first-loss guarantee alongside a pari passu guarantee arrangement, exemplifying blended financing between private sector banks and multilateral financing institutions.

Laurent Eurin, Managing Director at SG Development & Structured Export Finance, emphasized the significance of the transaction as a milestone in blended financing between private sector banks and multilateral financing institutions. Michiel de Vries, Global Head of Structured Export Finance at ING Bank, and Faruq Muhammad, Managing Director, Global Head of Structured Export Finance at Standard Chartered Bank, also expressed pride in their participation in Türk Eximbank’s green loan, underscoring their commitment to promoting sustainable infrastructure development in Türkiye.

This landmark collaboration signifies a concerted effort towards advancing sustainable infrastructure development and promoting green finance initiatives in Türkiye.