IFC Plans More Investment in Turkish Power, IT, Infrastructure

International Finance Corp., the World Bank’s private sector investment arm, plans more equity investments in Turkey on expectations that the country restores investor confidence amid concerns of political stability.

In the year to the end of June 2016, IFC will at least match the $400 million in equity investments it made in the 2015 fiscal year, said Aisha Williams, country manager for IFC Turkey, in an interview in Istanbul on Thursday. IFC raised its total commitment to Turkey to $1.8 billion, including $1.3 billion in loans to projects and $530 million in short-term trade finance, from $1.24 billion a year ago, she said.

“I foresee us matching or exceeding what we did last year in equity investments,” Williams said. “Market conditions allowing, I expect this year to be another strong year.”

Political parties in Turkey are struggling to form a government after June elections ended more than a decade of single-party rule by the Justice and Development Party, founded by President Recep Tayyip Erdogan. As uncertainty clouds domestic politics, Turkey is also striking at Kurdish rebels and Islamic State militants in its Syrian and Iraqi neighbors.

‘Bullish, Optimistic’

IFC is “bullish and optimistic” about power generation from gas and renewables such as wind and hydro, infrastructure, information technology and financial industries in Turkey, the third largest recipient of its funds after India and China, Williams said.

Investments last year included a 27 percent stake in Gama Enerji AS, an Ankara-based renewable energy producer, for an undisclosed price. It also invested $25 million for an undisclosed stake in data center operator Zenium.

“In Turkey, we see an attractive equity business because of the scarcity of third party capital in the country, especially for energy sector companies that want to expand,” Williams said.

IFC’s commitments under its Country Partnership Strategy program for the four years until end-2016 fiscal year have so far exceeded $4 billion, Williams said. The Washington-based group will draw up another strategy document for Turkey this year to cover for the period until end-2020, she said.

IFC is looking at Turkey for the long-term, and short-term fluctuations in the market won’t affect its decisions, Williams said.

“Whatever the political framework is, the key thing is to inspire and restore confidence as soon as possible for people and investors,” she said. “What the private sector hates most is uncertainty in a country.”