Public Disclosure Authorized

Report No: ACS1288

Republic of Turkey Facilitating SME Energy Efficiency Financing in Turkey

August 14, 2012

ECSS2 EUROPE AND CENTRAL ASIA

Public Disclosure Authorized

Public Disclosure Authorized

Public Disclosure Authorized

Development of an energy efficiency screening tool for commercial bank lending to SMEs

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Completion Summary Turkey Facilitating SME Energy Efficiency Financing in Turkey (P130578) Last modified by Jasneet Singh on 14-Aug-2012

Form Status: DRAFT

Basic Information Title

Facilitating SME Energy Efficiency Financing in Turkey (P130578)

Product Line

Technical Assistance (Non-lending)

Country, Region or Global

Turkey

Legal Name

Facilitating SME Energy Efficiency Financing in Turkey

Report/Output Types

IAR-Advisory Services Document

Responsible CC (e.g. OPCDR)

ECSS2 (8378)

Requesting CC (e.g. OPCDR)

Just In Time

No

Prior Management Endorsement

Sector Board

Energy and Mining

Sector(s)

SME Finance (40%), Energy efficiency in Heat and Power (60%)

Theme(s)

Micro, Small and Medium Enterprise support (30%), Climate change (20%), Other Financial Sector Development (50%)

Audience

Other

Parent GPP

ECCU6 (382)

Fee Based

No

Associate Activity/Task

TURKEY SME ENERGY EFFICIENCY

Completion Fiscal Year

Cost Center

Task Team Leader

Status

Jasneet Singh

Active

Amount (in USD)

0.00

Final Output Report No

ACS1288

Activity Performance Development Objective

The objective of this activity is to better inform commercial banks in the identification and appraisal of energy efficiency projects in the SME and building sectors. This work will help improve the enabling environment for commercial bank lending to SMEs and build banking capacity in support of the proposed IBRD/GEF Turkey SME EE Project.

Overall Development Objective Overall Development Objective

Rating

Explanation

Fully achieved

The energy efficiency bank screening tool was developed and delivered on time and positively received by the three Turkish partner banks.

Rating

Explanation

Intermediate Outcome(s) Intermediate Outcome

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Development financing informed

Fully achieved

Indicator(s)

Achieved?

Preparation of new operation informed

Yes

The screening tool has helped identify target sectors, improve the overall marketing strategies of the banks, and will help in the analysis of the energy savings cash flows of prospective credit line subprojects.

Intermediate Outcome

Rating

Explanation

Client capacity increased

Fully achieved

The delivery of the tool and training on its use will greatly help the three banks screen potential energy efficiency investments and market their credit lines to SMEs in the areas of energy efficiency.

Indicator(s)

Achieved?

Implementation capacity strengthened

Yes

Risks to Achieve Objective Please rate and describe the principle risks to achieve the development objective within the time period envisaged and how they can be mitigated. Does the team seek any specific guidance?

Risk Rating

Explanation

Low

Since this TA is linked to a Bank investment operation, the link of the capacity increased not be used is low.

Bank Performance Areas to be rated

Rating

Overall Bank Performance

Fully Satisfactory

Strategic Relevance & Ownership

Fully Satisfactory

Technical Quality

Fully Satisfactory

Client Engagement/Dissemination

Fully Satisfactory

Timeliness

Fully Satisfactory

Comments

Despite being initiated late in the FY (February), the activity was delivered on time to the client and for internal reviews, approvals. The positive DM reviews confirmed the relevance and quality of the tool.

Budget and Funding (Amount in USD) Resources

Bank Budget

Bank-executed Trust Fund

Other

Total

Total estimated at Concept

0.00

50,000.00

0.00

50,000.00

Total Actual

0.00

49,575.00

0.00

49,575.00

Duration of Activity/Program Concept Approval to Today's date

189 days

Management Endorsement of Delivery to Today's date

46 days

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Lessons Learned/Next Steps 1. Major Findings and Lessons Learned

Some lessons learned: * Just in-time trust funds, such as ESMAP, can be critical in bridging capacity and knowledge gaps identified in project preparation. * Building tools by using similar tools developed for slightly different purposes can greatly reduce development costs. * Standardizing subproject assessments and marketing for dedicated credit lines can help improve deal flow while lowering transaction costs. 2. Next Steps (Describe expected follow-up)

The final tool was delivered to the three partner banks (Halk, Vakif and Ziraat Banks) as well as relevant government entities (Ministry of Energy and Natural Resources, SME Agency (KOSGEB), Treasury). The tool has also been shared with other banks (e.g., TKB, SKB). The three banks plan to use the tool for marketing, subproject screening, and preliminary subproject cash flow assessments under the proposed SME EE IBRD credit line. It is expected this will help them reduce their transaction costs for smaller projects. KOSGEB and MENR are also planning to disseminate the tool to other banks, energy service companies (ESCOs), SMEs and others to help promote energy efficiency within the industrial sector.

Client Ownership Did the client ask for this activity?

Yes Did the client agree to the concept/scope/design?

Yes Did the client participate in carrying out the activity?

Yes Did client help finance the activity?

No Comments

The banks specifically requested simple tools and methods to assess energy efficiency projects to avoid having to undertake expensive feasibility studies or energy audits for smaller subprojects in SMEs.

Client Contact Information Organization Name

Type

Contact

Title

Telephone

Halk Bank

Borrower/Recipient

Mr. Suleyman Aslan

General Manager 90-312-289-4781

Ziraat Bank

Borrower/Recipient

Mr. Huseyin Aydin

General Manager (90-312) and CEO 584-2000

Vakif Bank

Borrower/Recipient

Mr. Suleyman Kalkan

General Manager (90-312) 455-7575

Email

Partners Were there one or more partners who either funding this activity or contributed expertise?

No

Partners Organization Name

Type

Contact

Title

Telephone

Email

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Was this joint project with IFC?

No

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