Bloomberg News

Turkey Has ‘Very Large’ Loan Demand on Cash Challenge, EBRD Says

May 31, 2012

Turkish demand for loans from the European Bank for Reconstruction & Development is “very large” amid a challenging financing environment, a bank official said.

Infrastructure projects may have to be revised to include more equity investments as debt funding is scarce because of the euro area financial crisis, EBRD First Vice President Varel Freeman said in an interview in Ankara yesterday, when he inaugurated the London-based bank’s second office in Turkey.

Prime Minister Recep Tayyip Erdogan is seeking to propel Turkey’s $772 billion economy with at least $10 billion of construction investments, including highways, bridges and tunnels Turkish banks have been unable to plug a funding gap as European lenders have curbed lending to strengthen their balance sheets.

“The EBRD itself is not going to be the answer, we’re not going to be pouring 30 billion euros into a series of infrastructure projects,” Freeman said. “We don’t have the balance sheet for that, but what we can do is to provide, very carefully, catalytic money that can help mobilize others to join us, to help improve the risk perception that other financiers have coming into these projects.”

Since opening its first office in Istanbul in 2009, the EBRD’s loans and equity investments in Turkey have risen to 1.5 billion euros ($1.86 billion) as of last year. The bank’s annual lending target in Turkey is 1 billion euros, with a focus on financial firms, energy projects, infrastructure investments and privatizations.

“I’m quite confident of the overall degree of success that will be encountered, but it will not come quickly it will not come automatically,” Freeman said. “We find a very large demand from private-sector companies and potential municipal partners for EBRD’s loans and equity invests here.”

To contact the reporter on this story: Emre Peker in Ankara at

To contact the editor responsible for this story: Andrew J. Barden at

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