Sustainable Finance Market to Exceed $25 Trillion by 2031

- Between 2018 and 2022, 148 climatetech startups in Turkey and the MENA region raised a total of USD 651 million, with Turkey accounting for the highest number of deals at 80. The region saw a record-breaking year for climatetech funding in 2022, with investments crossing a quarter-billion dollars for the first time. - The Turkish government is actively promoting renewable energy to reduce its reliance on approximately $40 billion in annual energy imports. Initiatives like the Renewable Energy Resource Zone (YEKA) tenders and policies exempting renewable energy investments up to 5 MW from licensing requirements are key drivers of this strategy. - In April 2023, the Turkish Ministry of Treasury and Finance issued its first-ever green bond on the international capital markets to finance and refinance eligible green projects. This follows the establishment of Turkey's sovereign Sustainable Finance Framework in November 2021, which sets standards for green and social bonds, sukuks, and loans. - Several Turkish banks are actively participating in the sustainable finance market. For instance, Garanti BBVA has committed to phasing out financing for coal projects by 2040, and DenizBank issued a $270 million green bond with the participation of the EBRD, IFC, and Proparco to fund renewable energy and other green projects. - International financial institutions are significant players in Turkey's green transition. The European Bank for Reconstruction and Development (EBRD) aims to increase its green project investments to 40% of its portfolio and has invested in green bonds from Turkish banks like DenizBank and QNB Finansbank. - The World Bank has identified Turkey as the middle-income country with the highest potential to benefit from the rising global demand for climate-tech products. While the number of climate tech investment deals in Turkey has nearly doubled recently, these have predominantly been small, seed-stage rounds. - Turkish venture capital funds are increasingly active in the climatetech space. Notable investors include Maxis, Diffusion Capital Partners, and TRANGELS, alongside corporate venture arms like Sabancı Ventures, which focuses on energy and climate technologies. - Key drivers for the global growth in sustainable finance include increasing investor and consumer awareness of Environmental, Social, and Governance (ESG) issues, and supportive government policies and regulations. In the US, for example, investments with an ESG label reached $6.5 trillion by the end of 2024.