EBRD lends $100 mln to Turkey’s DenizBank

The European Bank for Reconstruction and Development (EBRD) said on Friday it is providing a $100 million (82.4 million euro) loan to Turkey's DenizBank, part of Dubai-based lender Emirates NDB, to finance investments in green technologies and support women-led businesses in the light of the Covid-19 pandemic.

With this financing, made available through an investment under the country's existing Diversified Payment Rights (DPR) programme, DenizBank will be able to issue a total of $435 million, marking its return to DPR securitisation under the Emirates NBD Bank’s ownership, the EBRD said in a statement. The DPR is an established market instrument used by Turkish banks to raise long-term funding.

The issuance has attracted a host of investors, including the International Finance Corporation, Credit Suisse as well as DenizBank's parent, the EBRD also said.

“We believe that this deal will pave the way for new transactions in the Turkish market under DPR securitisation programmes backed by future flows. With its long-term maturity of up to seven years and competitive funding terms, this transaction is also a testament to the improving confidence in the Turkish economy," Hakan Ates, CEO of DenizBank Financial Services Group, said in the statement.

The transaction also allows the EBRD to provide new financing for women entrepreneurs and for green investments by smaller businesses such as those in renewable energy, resource efficiency, waste minimisation and water savings, Jurgen Rigterink, EBRD's first vice president said in the statement.

The EBRD funds for DenizBank will be equally split between the Women in Business programme to finance women-led small and medium-sized enterprises (SMEs) and the Turkey Sustainable Energy Finance Facility programme in support of resource efficiency and small-scale renewable energy investments, both of which are backed by EU grant funding.

The EBRD noted that its new investment follows a record 893 million euro ($1.1 billion) in financing to Turkish financial institutions in 2020.

Istanbul-based DenizBank operates a total of 742 branches as of June 2020, including branches of foreign subsidiaries. The lender's net profit amounted to some 1.1 billion lira ($152.8 million/126.0 million euro) as of end-June, while its assets totalled 248.9 billion lira, according to information published on its website.

(1 euro = 8.4553 lira)

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