IFC Invests in Türkiye’s First Blue Bond Issuance by QNB Türkiye, Boosting Climate Finance Market with Green Bond

IFC’s efforts in mobilizing climate finance in Türkiye are part of its broader strategy to support the country’s goal of achieving net-zero emissions by 2053.

In a significant move to enhance Türkiye's climate finance market, the International Finance Corporation (IFC) is investing in the country's first blue bond issuance by QNB Türkiye, alongside a green bond issuance. The combined initiative, valued at up to $125 million, is aimed at tackling climate change impacts and promoting the blue economy while encouraging sustainable investments in the country.

The project, a landmark for Türkiye, consists of two separate bond issuances: up to $25 million in a blue bond, where IFC is the sole investor, and up to $100 million in a green bond, with equal contributions from both IFC and the European Bank for Reconstruction and Development (EBRD), investing $50 million each. Both bonds will have a five-year tenor with a two-year grace period, providing long-term financing for critical climate-focused projects.

Supporting Türkiye’s Climate and Blue Economy

This dual issuance aims to enhance access to climate finance for small and medium enterprises (SMEs) and larger companies in Türkiye. The blue bond will support biodiversity, sustainable fisheries, and sustainable tourism, all of which are vital for the sustainability of Türkiye’s coastal economy. The green bond will focus on renewable energy, energy efficiency, and other environmentally sustainable projects to reduce Türkiye’s carbon footprint and promote a low-carbon economy.

In addition to addressing critical environmental challenges, the project will support sectors crucial to Türkiye’s long-term sustainable development goals. QNB Türkiye’s leadership in launching this project underscores its commitment to transitioning towards a blue and green economy, which aims to protect natural resources while promoting economic resilience.

Strengthening QNB Türkiye's Sustainable Finance

Ömür Tan, CEO of QNB Türkiye, highlighted the importance of the blue bond issuance, saying, “We are proud to lead Türkiye’s first blue bond, alongside an additional green bond issuance, in partnership with IFC. This landmark transaction underscores our commitment to safeguarding vital water resources and supporting the transition towards a sustainable blue and green economy.”

He further emphasized that the collaboration with IFC reinforces the bank's leadership in sustainable finance and its role in promoting climate-smart investments that contribute to both economic and environmental benefits.

To ensure the success of the blue bond, IFC has provided technical assistance to refine QNB Türkiye’s definition of blue finance. This includes identifying qualifying blue assets according to IFC’s Guidelines for Blue Finance and strengthening the bank's compliance with environmental and social standards.

Boosting Innovation in Climate Finance

The IFC believes that this pioneering initiative will pave the way for future climate finance innovations in Türkiye. Momina Aijazuddin, IFC Regional Industry Head for Financial Institutions Group (Middle East, Central Asia, Türkiye, Afghanistan, and Pakistan), stated, “Improving access to climate finance is essential to support Türkiye in tackling climate change and driving sustainable growth. We hope this first blue issuance, alongside the green bond, will help foster innovation, support businesses in adopting sustainable practices, and encourage other financial institutions to follow suit.”

IFC’s efforts in mobilizing climate finance in Türkiye are part of its broader strategy to support the country’s goal of achieving net-zero emissions by 2053. As of September 2024, Türkiye represents IFC’s third-largest country exposure globally, with a committed portfolio of nearly $5.2 billion. IFC continues to play a leading role in providing innovative financial solutions to meet the country’s green and blue economy needs, strengthen the financial system, and promote long-term resilience.

 The blue and green bond issuances mark a significant milestone in Türkiye's climate finance sector, enhancing its capacity to address climate change impacts and support sustainable economic growth. With IFC’s backing, this initiative is expected to catalyze further investment in sustainable practices, benefiting businesses and communities across the country. As the first of its kind, Türkiye’s blue bond issuance sets a new standard for climate finance in the region, encouraging other financial institutions to take similar steps towards a greener and more sustainable future.