The FINANCIAL — The European Bank for Reconstruction and Development (EBRD) has moved to the next stage of its refugee response plan that aims to strengthen the economies of Jordan and Turkey as they deal with the influx of millions of people displaced by the conflict in Syria.
The EBRD’s Board of Directors today approved a €50 million loan to Turkey’s Vakifbank for on-lending to micro, small and medium-sized enterprises (MSMEs) across an extensive network of branches in Turkish regions densely populated by refugees.
The EBRD’s loan to Vakifbank will focus on financing local businesses, including those owned or managed by refugees or employing refugees. In parallel, the EBRD will provide technical assistance to help Vakifbank expand its client base and provide access to skills and know-how for MSMEs, according to EBRD.
The Bank has also agreed a project to improve public transport in Gaziantep, a city on the Syrian border, which is home to one million Turkish people and over 350,000 refugees.
The €5 million loan for the purchase of modern city buses in Gaziantep fell under a new €375 million framework – the Municipal Resilience Refugee Response Framework, also approved by the Board today – that will fast-track infrastructure investments in municipalities in Jordan and Turkey that have been most severely affected by the refugee crisis.
The Gaziantep loan, backed by a further €5 million investment grant from the EBRD, will finance the purchase of another 50 environmentally-friendly compressed natural gas (CNG) buses, helping to strengthen social cohesion in the city by reducing overcrowding on a transport system bloated by a sharp increase in demand.
The new buses are an addition to an original fleet of 50 CNG vehicles financed by the EBRD in 2011 and from which both host communities and refugees are already benefiting.
Under the Municipal Resilience Refugee Response Framework, municipalities will benefit from EBRD financing of €225 million in Jordan and €150 million in Turkey.
The framework will be complemented by substantial donor funding for co-investment and technical cooperation in support of the long-term sustainability of projects, including reforms to improve municipal institutions and services, particularly those aimed at promoting inclusion and gender equality.
The EBRD has approved €11.2 million in grants from its own funds dedicated to the framework’s investments in Jordan and is seeking further grant resources from international donors.
Alain Pilloux, EBRD Vice President, Policy and Partnerships, said: “The EBRD is a key player in the economies affected by the refugee crisis. As such, we are stepping up our support to these countries with investments in infrastructure, finance and advice to small businesses, and access to jobs and training that have immediate impact on host communities and refugees alike. We are ready with a comprehensive investment plan worth €900 million and we are working with the donor community to launch new operations such as those approved today.”
Donors such as the European Union and the United Kingdom have provided €70 million so far to allow the EBRD to rapidly respond to the urgent needs of host communities and refugees. In order to accelerate the implementation of operations the Bank is also using grants from its net income allocation.
Under the EBRD’s refugee response package for Turkey and Jordan, the Bank aims to finance up to €500 million in new transactions subject to the mobilisation of an additional €400 million in grants.
To date, the EBRD has invested €574 million in Jordan and €7.7 billion in Turkey, with the vast majority of projects in both countries in the private sector.