Circular economy refers to a set of practices relating to production and consumption patterns and manage-ment of their externalities (extraction, pollution and waste management in particular), aimed at preserving all available resources by optimizing their use and that of the resulting products. By promoting more sustainable practices, circular economy activities can contribute to climate change mitigation through more efficient use of resources, longer product lifetimes, increased recycling as well as reuse and reduced use of raw materials. How-ever, the application of circular economy practices is still emergent with a global economy circularity index of only 9%. In the challenge of mainstreaming circular economy in Turkey, financial institutions have a key role to play in order to contribute to its development.
This project is structured around a credit facility to TSKB for financing circular economy investments and fi-nancing companies committed to changing their practices, and a Technical Assistance to support TSKB and its clients.
The credit facility for an amount of 80M€ is based on a dual approach:
- Component 1: enables the financing of “Eligible Investments” based on compliance with a predefined Eligibility Framework targeting Circular Economy practices with positive impact on mitigation and adaptation issues.
- Component 2: enables investments financing in favor of “Eligible Clients” which commit to improve their circular model through: performance of an initial self-diagnosis regarding Circular Economy practices; design and implementation of an Action Plan.
The Technical Assistance for an amount of 500,000 € will support the Project’s overall implementation. TA’s management is entrusted to TSKB, with AFD’s support in compliance with AFD’s Procurement Guidelines. The Technical Assistance will be instrumental to enhance TSKB’s know-how on circular economy financing, to develop companies’ know-how and raise their awareness on circularity issues, to provide operational tools to assess the benefits of circular practices, and to accompany the companies in their transformation process.
The project seeks the following outcomes:
- The sustainable practices related to circular economy among Turkish companies are improved: at least 10 companies are accompanied in the change of their practices and pilot investments are financed.
- TSKB’s know-how and strategy related to circular economy are strengthened. Knowledge of circular economy within the bank’s teams is enhanced, dedicated tools are set up and actions are taken to define TSKB’s strategic positioning on circular economy.
- Low-carbon transition is encouraged. Companies’ carbon footprint is reduced thanks to implementation of innovative mitigation projects with a minimum target of avoided 5,000 tonnes of CO2 per year.
- The importance of circular economy in the scope of climate finance is strengthened, as well as the driving role of the financial sector to facilitate the development of circular economy.
on the same regionGender EqualityMobility and transportHealth and Social ProtectionWater and Sanitation
on the same topicFinancial SystemsGovernanceFinancial SystemsClimateFinancial SystemsClimate
on the same financial tool