ADB Approves $400 Million Loan to Support Post-Earthquake Reconstruction in Türkiye

en.Wedoany.com Reported - On September 29, the Asian Development Bank approved a $400 million financial intermediation loan to Türkiye's Vakıflar Bankası to support housing reconstruction in areas affected by the 2023 earthquakes, SME financing in less-developed regions, and green investments. The loan is backed by a sovereign guarantee from the Ministry of Treasury and Finance of Türkiye, with Vakıflar Bankası serving as the sole financial intermediary and also assuming project execution and implementation responsibilities. The loan has a 20-year term with a 5-year principal repayment grace period.

The housing component will support the construction of disaster-resilient, energy-efficient, and affordable residential units in earthquake-affected provinces; the enterprise financing component focuses on SMEs in less-developed and disaster-affected regions, including women-owned, women-led, or enterprises with a high proportion of female employees; and the green investment component includes energy efficiency, clean energy, and other eligible enterprise transition projects. ADB will channel funds through Vakıflar Bankası to eligible final borrowers.

The project also includes a non-sovereign financing facility of up to $100 million, providing a 5-year loan directly to Vakıflar Bankası with a 6-month interest payment grace period. This portion of funding will be entirely directed to micro and small enterprises in less-developed regions and earthquake-affected provinces, with at least 50% allocated to women-owned or women-led micro and small enterprises.

ADB has classified the project's environmental and social risk as moderate. Sub-loans extended under this project may only be directed to low-risk and moderate-risk projects, while high-risk and significant environmental and social risk activities will be excluded; Vakıflar Bankası is also required to establish a supplementary environmental and social management system to screen and manage subsequent housing, SME, and green investment sub-projects.

The project is included in ADB's 2025–2027 interim country partnership strategy for Türkiye. In July of this year, ADB announced the establishment of a resident representative office in Türkiye and plans to arrange approximately $3 billion in financing annually in 2026 and 2027, focusing on post-earthquake recovery, critical infrastructure, enterprise financing, and transport and trade corridors connecting Asia and Europe.