Jan 07, 2022
The Climate Investment Funds (CIF) has just published a transformational change case study that looks at the progress in transforming Turkey’s energy sector with support from CIF’s Clean Technology Fund (CTF). In 2009, CIF-supported investments and strategies that backed increasing energy efficiency and improving renewable energy supply in Turkey were implemented to help speed up climate policy goals.
The report looks at how the CTF recognized that the energy sector had the most potential for Turkey to enact meaningful and rapid greenhouse gas emission reductions. A small number of strategic investments were proposed that would contribute to the national low carbon development trajectory, and CTF utilized existing country expertise from three multilateral development banks—the European Bank for Reconstruction and Development (EBRD), the International Bank for Reconstruction and Development (IBRD), and the International Finance Corporation (IFC)—to support the planned investments.
CTF’s investment in energy efficiency focused on an intermediated approach in two major initiatives directed at small and medium-sized enterprises (SMEs) which make up 99.8% of the total number of enterprises in Turkey. One initiative enabled investments of USD250 million in energy efficiency projects through concessional financing that provided longer loan repayment periods and lower interest rates. The other supported an innovative project design that leased energy-efficient equipment to SMEs rather than taking on unnecessary capital requirements. Both initiatives helped SMEs access debt financing, which they normally did not have access to, and helped leasing companies expand into new markets. CTF’s support for renewable energy focused on the promotion of private sector investment in wind, geothermal, solar PV energy, and small-scale hydro development.
Finally, the case study considers the changes brought about by the CIF-supported investments in Turkey through the five dimensions of transformational change: Relevance, Systemic Change, Speed, Scale, and Adaptive Sustainability. For example, within Systematic Change, the study shows how CTF investments increased awareness in national banks about the profitability of working in the energy efficiency and renewable energy sector. CTF investments also lowered perceived risks of investing in the renewable energy sector and has, in fact, opened a wider range of financial instruments that support climate-related investments made by the private sector. And within the dimension of Speed, CTF concessional financing allowed projects to move forward quickly and successfully so much that a second phase of CTF support was enacted after just three years.
Overall, the CIF case study concludes that Turkey successfully transformed its national energy usage to low carbon by prioritizing and accelerating energy efficient investments to reduce energy consumption, while simultaneously promoting the development of renewable energy sources.
Learn more and read the summary and full report.
