Financing Opportunities for Green Transition Goals

Published in the Official Gazette on 16 July 2021, The Green Deal Action Plan aims to promote domestic and international financing opportunities for environmental and climate change issues. The “Financing Opportunities for Achieving Green Transition Goals” report (“Report”), which will be updated every three months, was published on 4 November 2024 by the Ministry of Trade.

Climate change has accelerated efforts to achieve environmental sustainability and green transition goals. The Report offers detailed analysis of all national and international loans, grants, and incentives available to businesses for environmental and climate change initiatives.

Financing Tools and Support Programs

Key programs highlighted in the Report include:

Sustainable Financing Programs:

These provide critical support for financing environmentally friendly investments and are implemented by national institutions and ministries such as the Small and Medium Enterprises Development Organization (“KOSGEB”), the Scientific and Technological Research Council of Türkiye (“TUBITAK”), and the Ministry of Environment, Urbanization, and Climate Change. KOSGEB offers financing for energy efficiency projects, while TUBITAK supports research and development initiatives focused on green industries.

Green Loans: These aim to reduce financial barriers for sustainable projects and are available to projects focused on green energy, energy efficiency, waste management and environmental protection. The Ministry of Treasury and Finance provides business loans for energy efficiency projects to facilitate such initiatives while the Banking Regulation

and Supervision Agency offers high-energy- performance housing loans to encourage investment in eco-friendly buildings.

Grant Programs: These support projects contributing to environmental sustainability and are considered a significant resource for small and medium-sized enterprises (“SMEs”). For example, the IPA III program provides grants to accelerate the transition to green industries while the World Bank’s Green Transformation Call for Industry offers grants for innovative green solutions.

An analysis of international support programs reveals numerous incentives. The Digital Europe Program, provided by the Presidency’s Digital Transformation Office and the Ministry of Industry and Technology, facilitates access to European Union (“EU”) funding for digitalization. The program, which has a total 2021-2027 budget of €7.5 billion, supports critical digital infrastructures such as high- performance computing, artificial intelligence, data, and cybersecurity while its second phase aims to make these accessible to SMEs, public institutions and citizens.

The Ministry of Environment, Urbanization, and Climate Change provides incentives for wastewater treatment facilities, green transformation projects in industry, and environmental and energy projects under its IPA III program. The Ministry of Labor and Social Security aims to enhance employees’ “green skills” through vocational courses and on-the- job training programs.

The Ministry of Treasury and Finance supports renewable energy initiatives through VAT and tax exemptions and provides financing options for research and development projects (particularly in technology and energy efficiency). The Capital Markets Board reduces fees and offers IPO incentives for green financing instruments, while the Central Bank of Türkiye funds sustainable projects through its Investment-Commitment Advance Credit Program.

The Ministry of Energy and Natural Resources offers Efficiency Enhancing Projects and Energy and Carbon Reduction support programs (as well as EU IPA funds). The Energy Market Regulatory Authority offers the Renewable Energy Support Mechanism and favorable regulations concerning land and licensing fees. The Turkish Electricity Transmission Corporation ensures supply security and The Turkish Energy, Nuclear, and Mining Research Institute offers its Tenmak Technology and Product Development Projects and Tenmak Research and Development Projects.

The Ministry of Industry and Technology offers support in areas such as green industrial zones, electric vehicle charging stations, and technological product investments. Additionally, TUBITAK provides research and development programs in fields such as industrial projects, artificial intelligence, technology transfer, and green innovation. They include the 1501 Industrial Research and Development Support Program, the 1507 SME Research and Development Startup Support Program, and the 1509 Program which promotes international collaboration. Furthermore, specialized support is offered through initiatives such as the 1702 Patent-Based Technology Transfer Program, the 1711 Artificial Intelligence Ecosystem Call, and the 1004 Center of Excellence Program. KOSGEB also assists SMEs transitioning to green industries with technological product investments and collaborative projects.

The Ministry of Agriculture and Forestry’s offering includes research and development programs (led by the General Directorate of Agricultural

Research and Policies), public-private sector collaborations, and the use of certified seeds. Targeted support is also available for niche areas such as rural development investments, the Specialized Hands Project, small-scale fishing, and aquaculture.

Finally, the Ministry of Trade aims to enhance access to international markets and boost competitiveness through assistance with Market Entry Documentation, licensing, and registration to ensure compliance with environmental, quality, and health standards. Programs such as TURQUALITY focus on brand support, while the International Competitiveness Development projects cover a diverse range of areas such as logistics, tourism, cultural initiatives, education and management consultancy. The Green Deal Compliance Project also plays a crucial role in promoting sustainability. Türk Eximbank facilitates export-focused financing through special loans and World Bank funds.

Subsequent articles of this series will examine green financing opportunities provided by Turkish institutions in greater detail.