EBRD Supports Turkish Metal Casting Company Kutes in Transition to Sustainable Energy with Risk-Sharing Agreement

EBRD Supports Turkish Metal Casting Company Kutes in Transition to Sustainable Energy with Risk-Sharing Agreement

(IN BRIEF) The European Bank for Reconstruction and Development (EBRD) is partnering with Türkiye Sinai Kalkinma Bankasi (TSKB), a development bank, to support Kutes, a prominent Turkish metal casting company, in its shift toward sustainable energy practices. TSKB is providing a €15.4 million loan to Kutes, enabling the company to invest in 26 MW of solar power plants located in Kirklareli and Edirne, Turkey. This strategic investment aims to fulfill Kutes’ energy requirements for its casting facility and reduce over 80% of its electricity consumption. The EBRD’s Risk Sharing Framework (RSF) is a crucial component of this agreement, with the EBRD assuming 50% of TSKB’s credit risk for the transaction. This collaboration represents the first use of the EBRD’s RSF by Kutes and signals the beginning of a strong partnership between the EBRD and TSKB in supporting sustainable development among Turkish companies. The RSF is part of the EBRD’s Small Business Initiative, which aims to simplify and enhance access to finance for small and medium-sized enterprises (SMEs) in Turkey, reflecting the EBRD’s commitment to bolstering local private companies.

(PRESS RELEASE) LONDON , 22-Dec-2023 — /EuropaWire/ — The European Bank for Reconstruction and Development (EBRD) is supporting Kutes, a leading Turkish metal casting company, in its transition to sustainable energy through a risk-sharing agreement with development bank Türkiye Sinai Kalkinma Bankasi (TSKB).

Under the EBRD’s Risk Sharing Framework (RSF), TSKB is lending €15.4 million to Kutes to support its investment in solar power plants and sustainable practices. As part of the agreement, the EBRD is assuming 50 per cent of TSKB’ credit risk on the transaction.

Over the past few years, the metal casting industry has experienced a surge in energy expenditure, prompting Kutes to strategically invest in 26 MW of solar power plants in Kirklareli and Edirne in Türkiye. The investment will enable Kutes to meet its casting facility’s energy requirements, while mitigating more than 80 per cent of its electricity consumption.

This is the first time Kutes will benefit from the EBRD’s RSF, which aims to improve and simplify small and medium-sized enterprises’ access to finance across Türkiye. The collaboration marks the beginning of a strong partnership between the EBRD and TSKB and emphasises a joint commitment to supporting Turkish companies’ sustainable development.

The RSF is one of three core financial instruments of the EBRD’s Small Business Initiative, which is dedicated to supporting and developing local private companies. The EBRD offers partner banks funded or unfunded risk-participation mechanisms in foreign or local currency by co-financing and guaranteeing the partner bank’s loans to eligible companies.

To date, the EBRD has invested more than €19 billion in the Turkish economy, largely in the private sector.

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SOURCE: EBRD