EIB signs €400M loan with Türkiye to support post-earthquake reconstruction project

The project for which the EIB loan is earmarked includes the rehabilitation, construction and extension of water and wastewater infrastructure in devastated regions.

The European Investment Bank (EIB), the bank of the European Union, has signed a loan agreement worth €400 million with Türkiye. The loan is fully guaranteed by the European Union (EU) and will help to restore water and wastewater infrastructure in the provinces affected by the earthquakes that hit the south-east of the country on 6 February 2023. The loan will be provided by EIB Global, the arm of the EIB that works beyond the European Union, with İller Bankası (ILBANK) acting as the intermediary.

The signature of the loan follows on from the Donors’ Conference convened on 20 March 2023 by the European Commission and the Swedish Presidency of the Council of the European Union, during which Team Europe pledged €3.6 billion to support people in Türkiye and Syria.

The project for which the EIB loan is earmarked includes the rehabilitation, construction and extension of water and wastewater infrastructure in devastated regions. In addition to restoring normal living conditions for people in the region, the loan will improve public health and water supply, and reduce greenhouse gas emissions through more efficient wastewater treatment. It will also contribute to socioeconomic development by creating jobs.

EIB President Werner Hoyer said: “Following the tragic earthquakes in Türkiye earlier this year, the EIB, as the EU bank, joined the international community in supporting the people affected by these devastating events. As part of the Team Europe package, our €400 million in financing will respond to current needs by upgrading water infrastructure.”

Member of the European Commission for Neighbourhood and Enlargement, Olivér Várhelyi, said: “I am pleased that the European Investment Bank is providing this important financial contribution to support affected municipalities after the devastating February Earthquakes, with the backing of a guarantee from the EU. This is the delivery of EU solidarity with the people in Türkiye. I want to recall that Team Europe pledged more than €3 billion for people in Türkiye, including €1 billion in grants from the EU budget.”

ILBANK Director General Recep Türk stated “After the earthquake, ILBANK started financing negotiations with international financial institutions to support the affected region. Within the scope of these negotiations, agreements were reached for financing from four international financial institutions including the EIB.  In this context, the signing of the loan agreement between the Ministry of Treasury and Finance of the Republic of Türkiye and EIB with a budget of €400 million marks a significant step for the projects under this financing package, which will be carried out by ILBANK.”

Republic of Türkiye Minister of Treasury and Finance Mehmet Şimşek remarked, “We welcome the EIB’s support for our reconstruction efforts. We are also grateful for the EU’s solidarity with Türkiye. We are spending about 3% of GDP this year to rebuild the region that was affected by the earthquakes in February.”