Türkiye is not new to the question of maintaining its landscape: in antiquity, this is one of the regions in the world where farming first developed. Much closer to our lifespans, with all the same controversies of dam construction across the world, the government built massive structures beginning in the 1980s with a series of dams on the Euphrates River to generate electricity and provide for farmland irrigation, the largest named for the republic’s founder, Atatürk. More recently, in 2018 it completed the Ilisu Dam on the upper reaches of the Tigris River. Both multi-dam river projects have had considerable environmental impacts locally and downstream.
Stepping back for a broader view, where is Türkiye’s environmental focus in the 2020s? In 2025, what green finance is available in that beautiful landscape to preserve the country’s wealthy natural endowment while contributing to the global decarbonization transition?
Environmental Finance Overview
Carbon transition finance in Türkiye supports renewable energy projects (solar, wind, hydro, biomass), energy efficiency improvements, and clean transportation. Environmental finance has also spread into land, water, and marine cleanup, with emphasis on sustainable water management, pollution prevention and control, and expansion of waste treatment and recycling infrastructures.
Public green finance includes collaborations with multilateral institutions for infrastructure and green energy projects, while private finance is driven by domestic banks offering green loans, as well as green and blue bond issuance covering both land and marine-based projects. Given geography and intense trade and manufacturing ties with the European Union, a key driver for this market is the European Union's Carbon Border Adjustment Mechanism (CBAM), which incentivizes Turkish exporters to invest in greener production methods to meet increasingly rigorous EU carbon norms.
According to 2024 World Bank data, goods exported amounted to $ 262 bn, which represented about 17% of nominal GDP[1]. This included transport equipment, machinery, metal manufactures, apparel, electronics, foodstuffs, textiles, and plastics. The EU bought 41% of Turkish exports - so it will be essential for Turkish producers to meet those norms. Once the goods produced reach that high standard, all other export destinations remain open to those products.
International Development Banks
The public stimulus has been led by international development banks:
- The World Bank has supported the greening of private Turkish firms through equity finance, which has been channeled into specific enterprises via the Industrial Development Bank of Turkey (TSKB). It also has established a $1 billion program to expand renewable energy. A World Bank loan of $155 million, approved in late 2023, is being used to partially capitalize the Türkiye Green Fund. The fund provides equity financing to green companies and is expected to attract an additional $250 million in private capital.
- The Asian Infrastructure Investment Bank (AIIB) signed a $5 billion agreement to fund public-sector green projects over three years. These commitments include a $ 200 million on-lending facility with TKSB to support climate change mitigation and adaptation, a $ 40 million sustainable bond investment in the Türkiye Rönesans Project, and an upcoming $ 100 million loan for climate transition with VakıfBank that is aimed particularly at SMEs.
- The European Bank for Reconstruction and Development (EBRD) has channeled its funding through the Green Economy Financing Facility (GEFF), which has delivered over €700 million.
- Somewhat less well known outside the world of green finance, Climate Investment Funds (CIF) has backed a $1 billion fund for Turkey's green energy scale-up. CIF is the only climate fund working exclusively through six multilateral development banks, its implementing partners ADB, AfDB, EBRD, IDB, IFC, and World Bank[2]. The offer is for long-term financing for very early-stage projects, which is its specialty, in scalable areas of focus. To date, it has put up over USD 10 bn in lower- and middle-income countries world-wide.
Private Environmental Finance
Turkish banks are increasingly active in financing the carbon transition, driven by both commercial and regulatory incentives. Several banks, such as TSKB, Vakıfbank, Turkish Economy Bank, Denizbank, and İşbank, offer green loan financing options, often with favorable terms for environmentally friendly projects. The International Financial Corporation has invested in green bond issuance by QNB Türkiye, with a focus on renewable energy and energy efficiency.
The market is expanding to include not only green bonds for energy and efficiency but also blue bonds, with QNB Türkiye issuing the country's first blue bond for the sustainable blue economy.
As a further incentive, the Banking Regulation and Supervision Agency (BRSA) has implemented a Sustainable Banking Strategic Action Plan (2021–2025) to encourage environmental risk assessments and improve sustainability reporting. This Plan has influenced bank lending practices.
Current Notable Turkish Successes
Current highlights include:
- The Istanbul Resilience Project: in August 2025, the World Bank approved a $650 million loan to strengthen Istanbul's ability to prepare for and respond to disasters and climate risks. The city of some 16 million people is subject to strong earthquakes, and it must manage the extremely long urban shoreline of 630 km, if one includes the furthest northern districts on the Black Sea.
- Power transmission upgrade: also in August 2025, the World Bank approved a funding package totaling over $745 million to help Turkey upgrade its power transmission grid. This will allow for the integration of increased solar and wind energy capacity. Türkiye, like everywhere, must meet rapidly growing electricity demands for the country’s population of some 86 million people
- Karapınar Solar Power Plant[3]: A major renewable energy project, this is the largest solar power plant in Türkiye and Europe, and one of the five largest in the world. It was financed by a $1.1 billion package. It provides reliable, clean power for Konya, a city of 2 million people.
Conclusion
The WAIFC management team hopes that these Turkish successes can spark ideas and collaboration in the financial ecosystems of each of its members and observers.
[1] https://tradingeconomics.com/turkey/exports-by-category
[2] https://www.cif.org/how-we-work
[3] https://kalyonholding.com/Energy/yeka-solar