KfW Entwicklungsbank provides financing for municipalities in Turkey – across the country and at the request of the Turkish government

On behalf of the German Federal Ministry of Economic Cooperation and Development (BMZ) KfW Entwicklungsbank has been financing infrastructure projects in Turkish cities across the country for 25 years, with the focus on water supply, sewage treatment and waste disposal. The municipal projects are designed to protect the environment (in particular to keep the rivers and the ground water clean) and support the health of the local population. The objective of the measures is to bring Turkey closer to EU standards.

At the request of the Turkish government KfW Entwicklungsbank appraises the individual projects in line with the criteria agreed between the German and the Turkish government. The loan and financing agreements for the infrastructure measures are concluded between KfW Entwicklungsbank and the Turkish Treasury (Hazine), which transfers the funds on to the municipalities. The contracts for the measures are awarded by the respective cities and municipalities through international competitive bidding.

So far KfW, with support from the German government, has provided around EUR 1 billion for approx. 20 projects in the area of municipal infrastructure, some projects are still in the stage of implementation, a few others in the stage of preparation.

Currently the Turkish government receives so-called composite loans. This form of financing combines federal budget funds with market funds raised by KfW (the interest rate ranges between 2-5 per cent depending on the project, the loan term is between 10 and 25 years with 1 to 4 repayment-free start-up years).

More (here links to the presentation, the website of Entwicklungsbank (pages on Turkey) and the statement of the German Embassy in Ankara will be added)