Turkey’s Arçelik secures €150 million EBRD loan for green manufacturing

By Olga Rosca of EBRD

Arçelik CEO Hakan Bulgurlu and EBRD President Odile Renaud-Basso

• EBRD provides landmark €150 million loan to appliance manufacturer Arçelik
• Company to transform processes and plants across Turkey to become more sustainable
• Green manufacturing a business imperative, EBRD President says on visit to Turkey

Reconfirming its role as key provider of green finance, the European Bank for Reconstruction and Development (EBRD) is extending a €150 million loan to Turkey’s leading household appliance manufacturer, Arçelik, to support a three-year environmentally sustainable investment programme.

Arçelik, majority owned by Koc Holding, manufactures and sells home appliances

such as refrigerators, washing machines, cooking appliances, vacuum cleaners and consumer electronics products under 12 brands, including Beko and Grundig. Arçelik's global operations include sales and marketing offices in 48 countries and 28 production facilities in 9 countries.

As the company increases its global presence, it is also keeping a sharp focus on its environmental footprint and resource efficiency.

The first €83 million tranche of the EBRD loan is structured in line with the Green Loan Principles of the Loan Market Association and is the first externally verified green loan to Turkish manufacturing. It will support a green investment programme to transform processes and plants and fund the research and development of greener products.

The remaining €67 million tranche will finance upgrades at the company’s refrigerator plant in Eskisehir and at its cooking appliances plant in Bolu, both in north-western Turkey.

The EBRD previously provided a €150 million loan to help the company produce more energy-efficient and low-noise refrigerators and washing machines, which are in high demand, especially in foreign markets. 

The improvements are part of the company’s continuous innovation drive, aimed at ensuring that Arçelik manufactures pioneering and environmentally friendly products while adopting a green, resource-efficient approach to its production processes.

The new investments will help the company achieve its 2030 climate targets, consistent with the objectives of the Paris Agreement.

Signing the loan agreement in Istanbul, EBRD President Odile Renaud-Basso said: “We applaud Arçelik’s leadership in the green transition of Turkey’s manufacturing sector. Its pioneering experience shows that environmental improvements go hand in hand with profit-making and improved competitiveness. The costs of materials, energy and compliance have increased, and customers, investors and local communities have higher expectations. Therefore, managing operations in an environmentally and socially responsible manner is a business imperative. We hope that more Turkish companies will follow Arçelik’s green path and the EBRD is prepared to finance this transition.”

Arçelik CEO Hakan Bulgurlu said: “The private sector has an important responsibility in the decarbonisation of industry and the transition to a net-zero economy. The business world must set an example for both the planet’s future and sustainable development. Arçelik is taking firm steps in this direction with its green investments. We will translate important goals into action on the path to becoming a net-zero company throughout our value chain by 2050. Financing our environmental sustainability and research and development projects with the green loan provided by the EBRD will be integral to achieving that.”

Arçelik CFO Polat Şen said: “As a company that has set sustainability as a strategic priority, we place great importance on access to sources of green finance. The support we receive from the EBRD is highly valuable in our sustainable finance journey. This is the second cooperation we have undertaken in two years, demonstrating that our relationship depends on trust and Arçelik is treading the right path. The € 150 million loan that we have secured from the EBRD will help us become more sustainable and efficient in production.”

In 2020, Arçelik was named "industry leader" in the household durables category of the Dow Jones Sustainability Index Review for the second year in a row and, in accordance with the PAS 2060 Carbon Neutrality Standard, was Scope 1 and 2 carbon neutral across its global manufacturing operations in the 2019 and 2020 fiscal years, with its own carbon credits.

The EBRD is a leading institutional investor in Turkey. To date, it has invested €14 billion in the country through 351 projects, with 95 per cent of those in the private sector. Sustainability is at the heart of the Bank’s work and half of its portfolio in Turkey promotes the green transition.