World Bulletin / News Desk
"At least 15 percent of IFC’s funds will be used to provide green mortgages for the purchase of energy-efficient housing," the corporation, a member of the World Bank Group, said in a statement.
The five-year maturity bond is issued as part of Yapı Kredi Bank’s €1 billion (around $1.2 billion) covered bonds program launched in 2016, the IFC noted.
"IFC’s investment in the issuance aims to support Turkey’s nascent covered bond market," it said, adding covered bonds were a relatively new funding instrument for Turkey's capital markets.
"They offer an attractive funding cost and are viewed as low-risk investments since they are backed by the assets of the issuing banks," it said.
Manuel Reyes Retana, IFC's regional industry head for Europe, Middle East and North Africa said that with this financing, they were addressing some of the corporation's key development priorities in Turkey, including capital markets development, climate change and sustainable cities.
"Diversified and innovative funding instruments in Turkish lira help to deepen capital markets, boost financial inclusion and increase investor confidence. Green mortgages also offer better borrowing rates, while helping to save energy costs," he said.
According to the IFC, Yapi Kredi Bank expects its green housing loans portfolio to be worth $250 million by the end of 2021.