During the EMEA award Ceremony on June 9, the USD 115 mln Syndicated Loan facility to Sekerbank, arranged by FMO & KDB won the award for best green-line syndicated Loan.
This prize is a recognition for a unique transaction (see: Sekerbank transaction). This transaction deserves a place in the spotlight due to its quality, diversity, and its purpose. The FMO part of the funding (USD 30 mln, provided in TRL) supports Sekerbank innovative ‘EKOkredi Product’ in Turkey. Şekerbank has used Turkey's first-ever five-year syndication loan, which it acquired at the end of 2015 to finance SMEs and support foreign trade and energy efficiency investments. As a bank that believes in the crucial importance of the efficient use of energy in Turkey, Şekerbank developed EKOkredi in 2009, thus creating the first loan of its kind in Turkey. With EKOkredi it offers to popularize energy savings and support the sustainability of natural resources, the Bank finances energy efficiency investments by individuals, farmers, craftsmen and enterprises with favourable terms.
Şekerbank aims to create both awareness of energy efficiency and a positive environmental impact throughout Turkey through its EKOloan product. Eighty-thousand people in all customer segments have been introduced to energy efficiency thus far. By financing over 682 million TL in energy savings, investments and expenditures, and by collaborating with civil society on projects, Şekerbank has ignited widespread awareness in energy efficiency across the nation, thus reaffirming the Bank’s international recognition in the area of financing sustainable development. The project illustrates that green products can go hand in hand with profitable business opportunities, and hopefully also will be a model for the rest of the economy. For these projects long-term finance in local currency is required, which is still scarce in the Turkish market. Through providing this facility, FMO reaches indirectly 47,000 SMEs, mainly in the rural parts of Turkey, representing Sekerbank’s strong branch network in its Anatolian origin.
The project is fully in line with FMO’s strategy to support local green initiatives, which aims to halve FMO’s footprint by 2020, and contributes to the overall climate goals. With this project FMO aims to avoid GHG emissions, mainly due to energy savings. The Turkish economy is characterized by a relatively high GHG-intensity. Therefore investments in green generate relatively high GHG-emissions, and are an effective tool in climate change mitigation.
Other parts of the Syndicated loan facility consist of other currencies (USD, EUR), and other use of funds (trade finance, SMEs). Furthermore via this syndicated facility, FMO has been able to introduce KDB, a new Asian investor to the Turkish banking market. FMO catalysed commercial money to an existing client, and thereby created a higher impact at the end client level.
