- €35 million to boost electric vehicle (EV) production, increase competitiveness
- Will support Türkiye in becoming an EV regional hub while increasing exports and creating jobs
IFC is helping a leading automotive manufacturer in Türkiye boost its production of electric vehicles (EVs), strengthen the sector’s competitiveness, increase exports and create jobs. IFC’s investment will also help bolster Türkiye’s transition to net zero.
Karsan manufactures both conventional and electric light commercial vehicles and buses. IFC is providing a €35 million loan to the company, of which €25 million will be used to fund its working capital needs and €10 million to support its acquisition of intellectual property rights and technological know-how around electric buses. Due to its lengthy order-to-delivery periods,the company has higher working capital requirements than passenger car EV companies.
“We are extremely thrilled to enter into a collaboration with IFC that will provide Karsan with an important boost in becoming an important global player in the sphere of sustainable mobility solutions,” said Kenan Kaya, Karsan’s Chief Financial Officer. “Our partnership with IFC started from the very onset of the process and is finally being crowned with this agreement.”
The investment in EVs is part of IFC’s efforts to help further develop Türkiye’s automotive and manufacturing industries, boosting exports and strengthening the country’s position in global value chains. With Türkiye possessing the necessary infrastructure and skills to produce EVs and their components, it has the potential to become a regional EV hub.
It is also aligned with the World Bank’s climate strategy for Türkiye, which set the decarbonization of the transport sector as a key pillar of the country’s net zero carbon path by 2053, and the Paris Agreement’s mitigation and adaptation goals. A full plug-in commercial EV in Europe is expected to reduce emissions by almost 70 percent compared to a similar vehicle powered by diesel.
“Supporting the transition to net zero is the greatest priority of our time,” said Wiebke Schloemer, IFC Director for Türkiye and Central Asia. “This project will help enable that in Türkiye, while boosting its nascent EV sector. That will enable Türkiye to not only keep pace with the latest trends in the automotive industry but also help increase exports and unlock other complex industries in the country.”
IFC has supported private sector development in Türkiye for more than 50 years, with investments of nearly $11 billion in the last decade alone. Türkiye represents IFC’s third-largest country exposure globally, with a committed portfolio of close to $4.9 billion as of November 2023.
Source: ifc