EBRD, Ford Otosan Boost Collaboration for an Electric Future
The Turkish automotive industry received a significant boost when the European Bank for Reconstruction and Development (EBRD) arranged a loan of €200 million to the industry leader Ford Otomotiv A.. (Ford Otosan) to fund the company's investment programme for upgrading its next generation of commercial vehicles, which will include battery electric vehicles and plug-in hybrid electric vehicles.
€54 million of the loan is for the account of the EBRD, and up to €146 million is syndicated to commercial lenders under the Bank’s A/B loan syndication structure. In this way of getting money, commercial banks and some private-sector lenders who meet certain requirements can join an EBRD loan on market terms, but the EBRD is still the official lender for the whole loan amount. Participating lenders include the Green for Growth Fund, HSBC, MUFG, Société Générale and ILX.
As part of its effort to finance the transition to a green economy, the EBRD and commercial lenders extended a €650 million loan to Ford Otosan in 2021. This funding supports Ford Otosan's goal of pioneering the automobile industry's electrification toward a greener, more sustainable future.
Arvid Tuerkner, EBRD Managing Director for Türkiye, said: “Electric vehicles are essential to a net-zero future, and we are proud to be partnering with Ford Otosan, an industry leader, in transforming Türkiye into a European hub for the production of commercial electric vehicles.
“I am happy to see that we are continuing our partnership with lenders, launched in 2021 with a €650 million financial package,” he added. “Our partners have put their faith in us and used their resources in support of a common goal. We will remain committed to a green future in Türkiye and the wider world.”
The loan proceeds will assist Ford Otosan in transforming its Kocaeli facilities into an integrated manufacturing centre for the assembly of electric vehicles in Türkiye, as well as supporting higher operational standards and contributing to the digitalisation and integration of the supplier base through greater integration into the value chain.
Güven Özyurt, General Manager of Ford Otosan, said:
“As the leading manufacturer of electric commercial vehicles in Europe, Ford Otosan is also leading a new era of sustainable manufacturing, rethinking not just what we build but how we build. As a company whose goal has always been to make products and provide services that help the environment and society, we are building a state-of-the-art, carbon-neutral plant in our Kocaeli facilities.
"Our electric vehicles and our new plant will help us reach our long-term sustainability goals of becoming carbon neutral in our facilities by 2030, in our suppliers and logistics by 2035, and in our products (including heavy commercial vehicles) by 2040."
Ford Otosan is a multinational car company that makes both passenger cars and commercial vehicles. It currently has four factories, three of which are in Turkey and one in Romania. It is a partnership between Ford Motor Company and Koc Holding, which is Turkey's largest investment holding company and a leader in energy, automotive, consumer durables, and finance. Ford Otosan is also Europe's top commercial vehicle producer.
The investment underlines the EBRD's commitment to the country's green goal, as it wants to encourage large-scale manufacturing of battery electric and hybrid electric commercial vehicles, a crucial step toward global decarbonisation.
For more sustainable finance news
Source: EBRD
