The European Bank for Reconstruction and Development (EBRD) plans to invest 1 billion euros ($1.3 bln) in Turkey next year, predicting demand for finance will grow, especially in the agribusiness and renewable energy sectors. According to Suma Chakrabarti, the bank’s president Turkey is set to overtake the Ukraine as its second biggest investment destination – Russia is the biggest.
“We’re pretty confident we’ll spend at least another billion (euros) here next year … I’ll be surprised and upset if we didn’t manage that,” Chakrabarti told a roundtable with journalists late on Sept. 11.
“There’s demand beyond a billion a year, the pipeline is strong and growing, but we are only a few years into our relations,” he said, noting it would be partly up to the bank’s shareholders whether to expand the programme further.
Set up in 1991 to invest in the former Soviet states in Eastern Europe, the EBRD began working with Turkey in 2009. Since then it has invested roughly 2 billion Euros, mostly in smaller companies within remote regions where financing struggled during the financial crisis.
The next target for the bank is the wider Middle East North Africa region, which is hopes to expand investments into in conjuction with its new Turkish partners. The bank will seek board approval for new investments in Jordan, Morocco and Tunisia next week with Egypt following shortly afterwards, Chakrabarti said.
“Turkish companies have lots of links with the region. Through EBRD, Turkish companies will also look for projects which we could sponsor in that region,” he said. Between them the Turkish government and private sector have invested heavily in the region, particularly in sectors like transport, health, services and energy, but will look to seek EBRD assistance for bigger infrastructure projects.
“We see more interest from Japanese banks than previously which is interesting,” said Michael Davey, EBRD’s Turkey director.