Republic of Turkey Facilitating SME Energy Efficiency Financing in Turkey

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Report No: ACS1288 Republic of Facilitating SME Energy Efficiency Financing in Development of an energy efficiency screening tool for commercial bank lending to SMEs August 14, 2012 ECSS2 EUROPE AND CENTRAL ASIA Document of the World Bank

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3 Last modified by Jasneet Singh on 14-Aug-2012 Basic Information Title Completion Summary Facilitating SME Energy Efficiency Financing in (P130578) Facilitating SME Energy Efficiency Financing in (P130578) Product Line Technical Assistance (Non-lending) Country, Region or Global Legal Name Responsible CC (e.g. OPCDR) Facilitating SME Energy Efficiency Financing in ECSS2 (8378) Requesting CC (e.g. OPCDR) Just In Time No Prior Management Endorsement Sector Board Energy and Mining ECCU6 (382) Report/Output Types Completion Fiscal Year Sector(s) SME Finance (40%), Energy efficiency in Heat and Power (60%) Theme(s) Task Team Leader Form Status: DRAFT Jasneet Singh IAR-Advisory Services Document Status Active Micro, Small and Medium Enterprise support (30%), Climate change (20%), Other Financial Sector Development (50%) Audience Other Fee Based No Cost Center Amount (in USD) Parent GPP Associate Activity/Task TURKEY SME ENERGY EFFICIENCY Final Output Report No 0.00 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 SME EE Project. Overall Development Objective Rating Explanation Overall Development Objective Fully achieved The energy efficiency bank screening tool was developed and delivered on time and positively received by the three Turkish partner banks. Intermediate Outcome(s) Intermediate Outcome Rating Explanation Page 1 of 4

4 Development financing informed Fully achieved 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. Indicator(s) Achieved? Preparation of new operation informed 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 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 Low Explanation 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 Overall Bank Performance Strategic Relevance & Ownership Technical Quality Client Engagement/Dissemination Timeliness Comments Rating 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 Total estimated at Concept , , Total Actual , , Duration of Activity/Program Concept Approval to Today's date 189 days Management Endorsement of Delivery to Today's date 46 days Other Total Page 2 of 4

5 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? Did the client agree to the concept/scope/design? Did the client participate in carrying out the activity? 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 Ziraat Bank Borrower/Recipient Mr. Huseyin Aydin Vakif Bank Borrower/Recipient Mr. Suleyman Kalkan Partners Were there one or more partners who either funding this activity or contributed expertise? No Partners General Manager General Manager and CEO (90-312) General Manager (90-312) Organization Name Type Contact Title Telephone Page 3 of 4

6 Was this joint project with IFC? No Page 4 of 4