Development and Investment Bank of Türkiye Supports Türkiye’s First Transition-Bond Issuance for a Low-Carbon Economy

The sustainability framework for the issuance, for which Ziraat Yatırım Menkul Değerler acted as sales intermediary, was developed by Development and Investment Bank of Türkiye and Metsims Sustainability Consulting. The UNDP Istanbul International Center for Private Sector in Development (IICPSD) contributed to the framework-development process, particularly by sharing global practices to support efforts to transition to a low-carbon economy.

Stating that the Bank continued its work without slowing down in line with Türkiye’s sustainable development objectives, TKYB CEO İbrahim Öztop said: “Under our Investment Banking umbrella, we provide financial advisory services to both private-sector and public institutions and facilitate companies’ access to different financing resources. Through this investment, which makes a significant contribution to our country’s transition to a low-carbon economy, Palgaz will generate 5.3 billion kWh of clean and renewable energy and reduce carbon emissions by 63% compared with the current level. As a Bank that has broken new ground in sustainable finance, taking part in our country’s first transition-bond issuance for a low-carbon economy is a distinct source of happiness and pride for us.”

We Contributed to a Reduction of Three Million Tonnes in Carbon Emissions

Emphasising that the most lasting solution for combating climate change and achieving sustainable development is the transition to a low-carbon economy, Öztop said: “As a Bank, we offer numerous innovative solutions for the transition to a low-carbon economy. We regard not only financial risks but also environmental and social risks as an integral part of our lending processes. Sustainability-themed projects account for 63% of our loan portfolio. We monitor solar, wind, geothermal and biogas projects with great care and support their implementation. As of December 31, 2020, we had provided approximately TRY 9.5 billion in financing support to 295 energy investment projects with total installed capacity of 2,811 MW. We will continue with the same sensitivity, playing a pioneering role in expanding thematic capital-market products and advancing our work on transition bonds and green bonds without slowing down.”

Palmet Energy Group CFO Bora Kıraç said: “As before, we are delighted and proud to break new ground once again together with Development and Investment Bank of Türkiye in the capital markets and our sector. As a result of the investment we plan to make with the TRY 200 million raised through the issuance, we will reduce CO₂ emissions by 1.9 million tonnes compared with the current level. This investment will deliver a 63% reduction in carbon emissions. Our investments, made through access to different financing resources, will continue without slowing down. We believe our investments aligned with sustainable development objectives will create a leverage effect for the transition to a sustainable low-carbon economy that enables people and society to live to better standards, particularly by combating climate change and air pollution.”

Ziraat Yatırım Menkul Değerler CEO Uğur Boğday said: “We were very pleased to act as intermediary for our country’s first transition-bond issuance for a low-carbon economy, which we believe will make a major contribution to a cleaner environment and the transition to a sustainable economy. We are also pleased that the sector has shown interest in such products. We will continue supporting projects in this direction.”

About the Transition Bond for a Low-Carbon Economy

A transition bond is a type of bond whose proceeds are used to finance projects compatible with the transition to a low-carbon economy. Transition bonds are generally used in sectors that meet the general criteria for financing but do not yet have sufficiently green production and require financing to undertake transactions that reduce greenhouse-gas emissions. In view of Palgaz’s emissions-reduction impact, the issuance received “low-carbon economy transition” bond accreditation. Projects financed with the proceeds of transition bonds aim to reduce the carbon footprint, ensure resource efficiency and make significant holistic contributions to the United Nations Sustainable Development Goals. It is estimated that the investment Palgaz plans to make using the TRY 200 million raised through the issuance will reduce CO₂ emissions by 1.9 million tonnes compared with the current level, equivalent to an annual reduction of 946,000 tonnes.

(*) UNDP’s contribution to this specific issuance does not constitute approval or recommendation of any matter and does not reflect the official position of UNDP or of any UN Member State represented on its Executive Board.

(*) The contribution provided by UNDP in relation to this issuance does not constitute an endorsement or recommendation of any kind and does not reflect the official position of UNDP or of any United Nations Member State serving on its Executive Board.