Climate Finance Report 2025

Chapter 6 | PROJECTS

The “Climate Finance Facility” project aims to support Türkiye’s transition to a low-carbon and climate-resilient economy through targeted investments in renewable energy, energy efficiency, climate adaptation, climate industries and circular economy initia- tives. Financed by a ¤50 million loan from the OPEC Fund, the project will be implemented by the Industrial Development Bank of Türkiye (TSKB) and is designed to accelerate climate mitigation and adaptation efforts in line with Türkiye’s net-zero emis- sions target by 2053. By channeling funds to eligible sub-projects across the country, the facility seeks to reduce GHG emissions, enhance energy savings and mobilize additional private sector financing — contributing directly to the country’s updated NDCs and broader sustainable development goals.

Situation Analysis of Climate Impacts

Türkiye is also prioritizing adaptation and resilience. The World Bank’s Country Climate and Development Report emphasizes a “resilient and net zero pathway”, combining adaptation measures with the net-zero 2053 goal. Boost- ing country-wide resilience will require protecting critical infrastructure, improving water resource management, climate-smart land use planning and integrating climate/ disaster risks into fiscal policies. 26 According to the US ND-GAIN index, Türkiye is relatively well- placed to adapt to climate change. However, the EU INFORM Risk Index classifies Türkiye as “medium” risk, noting its con- siderable vulnerability to earthquakes, floods and droughts.

Türkiye faces an increasing frequency of extreme weather events: for example, in 2021 massive wildfires burned over 139,000 hectares and devastating floods struck the Black Sea region. Additionally, twin earthquakes on February 6, 2023, registering 7.8 and 7.6 on the Richter scale, devastat- ed 11 provinces in south and southeast Türkiye, killing more than 50,000 people, displacing an estimated 3.3 million and damaging or destroying over 800,000 buildings, further highlighting the country’s exposure and vulnerability to nat- ural disasters and underscoring the urgent need for resilient infrastructure and disaster preparedness. 24 Key vulnerabili- ty factors include water stress, food security issues and ex- posure of population and assets to hazards like floods and forest fires. As the climate warms, Türkiye is expected to ex- perience more frequent heatwaves, droughts and sea-level rise, threatening public health, agriculture, infrastructure and ecosystems. These risks, combined with a large agriculture sector and population exposure in hazard-prone areas, put significant strain on the environment and the economy. 25 On the emissions side, Türkiye’s per capita output remains below OECD and EU averages. However, the energy sector (power, transport, buildings and industry) accounts for about three-quarters of total emissions, it still relies heavily on coal and its buildings are not energy-efficient. Recognizing the need for action Türkiye ratified the Paris Agreement in 2021 and pledged net-zero emissions by 2053, establishing a new Ministry of Environment, Urbanization and Climate Change and updating its climate action plan. The intensification of floods, wildfires and even marine mu- cilage (“sea snot”) outbreaks in recent years have under- scored the urgency of robust mitigation efforts.

The OPEC Fund’s contribution to Climate Resilience in Türkiye

Purpose of the Loan

The “Climate Finance Facility” project loan is aimed at sup- porting Türkiye’s climate goals by financing green and resil- ient investments. The project document states the purpose clearly: “The project aims to support Türkiye’s transition to a low-carbon economy while simultaneously enhancing its resilience to the adverse effects of climate change.” In practice this means that the loan proceeds will be used to help Türkiye cut its GHG emissions and strengthen adapta- tion. The project focuses on priority areas aligned with these goals — with special attention to investments in: (1) climate mitigation (particularly renewable energy generation, energy efficiency improvements and electricity grid upgrades), (2) climate adaptation, (3) climate industries (supporting busi- nesses and innovations that contribute to climate solutions), and (4) circular economy initiatives.