Turkey's Eximbank secures a $145 million Islamic financing arrangement to bolster Turkish exporters
The Islamic Corporation for the Development of the Private Sector (ICD) has coordinated a $145 million murabaha syndication facility for Turk Eximbank, a key institution supporting Turkey's foreign trade. This financing aims to bolster the growth of export-oriented businesses in Turkey's private sector by providing Shariah-compliant financing structured under Islamic finance principles [1][2][3].
Key details of the facility include:
- Shariah-compliant funding: The facility respects Islamic finance principles, offering an alternative financing method that aligns with the values and requirements of many private sector businesses, especially those favoring ethical finance [1][3].
- Syndication with prominent Islamic banks: The deal involves ICD collaborating with Gulf-based Islamic banks—Warba Bank, Kuwait International Bank, and Al Rayan Bank—bringing international financial partners and expertise [1].
- Focus on private sector development: ICD, as the private sector arm of the Islamic Development Bank Group, leads the initiative to effectively channel resources to foster private sector growth across member countries, with Türkiye as a key beneficiary [1][3][5].
- Alignment with Türkiye’s export-driven economic strategy: Turk Eximbank’s General Manager, Ali Guney, emphasized the bank’s commitment to meeting exporters’ financing needs and boosting their global competitiveness via this funding partnership [1].
- Maturity of three years: The facility’s maturity period allows businesses sufficient time to utilize the funds for export activities and repay them within a reasonable timeframe consistent with trade cycles [1][3].
The financing, structured in compliance with Islamic finance principles, is seen as a key step towards supporting Turkish exporters and a reflection of strong cooperation among multilateral development finance institutions [4].
However, no information has been provided about the specific terms or conditions of the funding secured by Turk Eximbank, the impact of these financings on the overall economy or specific businesses in Türkiye, or any potential challenges or risks associated with these financings.
Ali Guney stated that the institution hopes the secured funding will bring benefit to Türkiye [2]. Turk Eximbank has provided a total of $24.1 billion in financing to 13,735 firms, according to its website, highlighting its ongoing commitment to supporting Turkish exporters [6].
This partnership between Turk Eximbank and the ICD is aimed at fostering private sector development across member states, marking a significant move towards promoting ethical, sustainable, and export-driven growth in Türkiye [1][3][5].
[1] Anadolu Agency (2022). ICD, Turk Eximbank Collaborate on $145m Syndicated Facility for Turkish Exporters. [online] Available at: https://www.aa.com.tr/en/economy/icd-turk-eximbank-collaborate-on-145m-syndicated-facility-for-turkish-exporters/2628742
[2] Anadolu Agency (2022). Turk Eximbank Secures $145 Million Islamic Syndication Facility. [online] Available at: https://www.aa.com.tr/en/economy/turk-eximbank-secures-145-million-islamic-syndication-facility/2628964
[3] Anadolu Agency (2022). ICD, Turk Eximbank Sign $145 Million Syndicated Facility for Turkish Exporters. [online] Available at: https://www.aa.com.tr/en/economy/icd-turk-eximbank-sign-145-million-syndicated-facility-for-turkish-exporters/2628743
[4] Anadolu Agency (2022). ICD, Turk Eximbank Collaborate on $145m Syndicated Facility for Turkish Exporters. [online] Available at: https://www.aa.com.tr/en/economy/icd-turk-eximbank-collaborate-on-145m-syndicated-facility-for-turkish-exporters/2628742
[5] Islamic Corporation for the Development of the Private Sector (2022). ICD Signs $145 Million Syndicated Facility with Turk Eximbank. [online] Available at: https://www.icd-ps.org/icd-signs-145-million-syndicated-facility-with-turk-eximbank/
[6] Turk Eximbank (2022). Turk Eximbank. [online] Available at: https://www.turkeximbank.gov.tr/en-US/Pages/AboutUs.aspx
Turkish investors can now consider investing in export-oriented businesses in Turkey, as a Shariah-compliant financing of $145 million has been secured by Turk Eximbank, which aligns with the values of many private sector businesses favoring ethical finance. This partnership between Turk Eximbank and the Islamic Corporation for the Development of the Private Sector (ICD) is aimed at fostering private sector development across member states, promoting ethical, sustainable, and export-driven growth in Turkey.
