Türkiye's green transition can attract major investment — IFC official

Türkiye's push to boost renewables in its energy mix presents a "unique opportunity" to attract significant foreign investment, a senior official from the International Finance Corporation (IFC), the World Bank's private sector arm, has said.

Susan Lund, the IFC Vice President for Economics and Private Sector Development, will attend the meeting of the Investment Advisory Council of Türkiye on Saturday along with other high-level representatives of international institutions and companies.

The participants will discuss Türkiye's investment climate and strategies to attract more foreign direct investment, particularly in export-oriented sectors, during the meeting, which will be chaired by Turkish President Recep Tayyip Erdogan.

The table will also cover reducing regulatory burdens, modernising the business environment to facilitate technology transfers and innovation, and mobilising private capital to support Türkiye's renewable energy targets and urban infrastructure projects.

"The green transition offers a unique opportunity for Türkiye to attract substantial investment," Lund said, adding that enhancing economic governance and tackling trade barriers are essential for further integrating Türkiye into global value chains.

"Türkiye has made great progress"

"In recent years, large greenfield investment projects have been announced in the renewable energy sector in emerging markets around the world, totaling $336 billion in 2022 and 2023," she explained.

Countries such as Egypt, Morocco, Chile, and India attracted significant foreign direct investment inflows in recent years, she added.

According to Lund, while Türkiye has "made great progress, further improvements in governance, institutional strengthening, and modernisation of the business environment are needed."

Lund also said Türkiye's recent economic stabilisation measures offer new opportunities to enhance engagement in key sectors such as manufacturing, climate initiatives, small-and medium-sized enterprise finance, and digital infrastructure.

"Significant potential across various sectors"

Noting that Türkiye is one of the largest emerging markets that the IFC operates in, Lund said the country has a relatively young, vibrant workforce, and in many industries has world-class companies.

"It offers significant potential across various sectors, including manufacturing, electric vehicles, technology and healthcare," she said.

On the IFC's presence in Türkiye, as of August, she said, Türkiye represents its third-largest country exposure globally, with a committed portfolio of $5.2 billion.

This portfolio includes large investments in financial institutions to support earthquake recovery, climate initiatives, and infrastructure, including the energy sector, Lund explained.

Securing financing for energy projects

"The IFC’s strategy is fully aligned with Türkiye's Medium-Term Plan, focusing on improving access to finance, enhancing competitiveness and job creation in the real sector, reducing the gender gap, tackling climate through mitigation and adaptation, investing in sustainable infrastructure, and advancing exports and trade," she said.

The IFC also plans to deepen its involvement in trade finance and export-oriented sectors, she said.

Asked about the IFC's possible role in securing financing for Türkiye's large-scale energy projects, Lund said, "We can partner with companies to deliver services across the project lifecycle, from origination to financial structuring to implementation and supervision."

According to Lund, revitalising Türkiye's FDI "will require building a business environment more conducive to the private sector, which includes continuing to prioritise and sustain macroeconomic stability, while reducing regulatory burdens."