The EIB Group Focus on Turkey

2006 is proving to be a record year for EIB Group's operations in Turkey. The Group, composed of the European Investment Bank (EIB) and the European Investment Fund (EIF), is reaching new levels in terms of its exposure to the Turkish market, confirming its commitment to Turkey.

The EIB commenced operations in Turkey more than 40 years ago and has financed a substantial and highly diversified portfolio of both public and private sector projects across all key areas of the country's economy. Total lending in the period 2000-2005 came to TRY 5.8 bn (EUR 3.1 bn). Against the background of growing investments in the country, accelerated by the start of EU accession negotiations, the EIB's investments in Turkey will reach a record figure of some TRY 2.8 bn (EUR 1.5 bn) in 2006, marking a 70% increase compared to the previous year and confirming the growing share of support to private sector initiatives.

The EIB has partnered with national and foreign industrial investors and is supporting, through cooperation with an extended network of local banks, a vibrant SME sector in Turkey. Strong trading links and efficient infrastructure, including transport corridors will support the prosperity of the country and its efforts towards EU membership. The EIB re-confirms its strong commitment to Turkey and underlines that it is the largest recipient country of EIB financing outside the EU. While the Bank is deepening its activity in the above fields it also wishes to progressively expand into other priority areas, such as education and RDI, underlined Matthias Kollatz-Ahnen, EIB's Vice- President.

At the same time, EIF, which is the risk capital arm of the EIB, has approved venture capital investments in excess of TRY 130 m (EUR 70 m) in the current year. Whilst risk capital has been used by holding companies in Turkey in the past, the Fund is now beginning to see the establishment of independent management teams in Istanbul. As EIF's Chief Executive Francis Carpenter explained "Our duty is to ensure that best market practice is being applied by supporting the development of the venture capital industry, which in exchange leads to private sector development and hopefully attractive economic returns."

EIF's long-term commitment to this market was consolidated with a partnership agreement with TTGV, the Turkish Development Foundation of Turkey earlier in June this year which aims at the joint sponsoring of new initiatives to promote risk capital in support of the growth of SMEs, particularly technology-based companies. Furthermore, TSKB, the Turkish leading private industrial development bank, has also recently become a shareholder of EIF.

Philippe Maystadt, President of EIB and Chairman of EIF's Board of Directors, commented "The EIB Group is committed to the Turkish market and to supporting the public and private sector. In order to strengthen our presence, we will soon be opening a permanent office in Turkey."

For further information on EIF's activities in Turkey, please contact EIF's Turkey desk at turkey@eif.org.

More about EIB

The EIB is the European Union's financing institution, set up in 1958 under the Treaty of Rome. Its mission is to contribute to the policy objectives of the European Union by providing long-term finance for investment projects. The bank is owned by the members states of the European Union. Outside the Union, the EIB operates in Bulgaria, Croatia, Romania, Turkey, the western Balkans, Mediterranean countries, Africa and the Caribbean. Investments in Turkey come under the EU-guaranteed South-Eastern Neighbours mandate (SEN) and the Pre-Accession Facility (PAF) where the EIB operates at its own risk. In the year 2005 the EIB lent a total of EUR 47.5bn. The bank has a triple-A credit rating and is the largest multilateral financial institution in the world.