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Document of The World Bank Group
FOR OFFICIAL USE ONLY
Report No. 11096-TR
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
MULTILATERAL INVESTMENT GUARANTEE AGENCY
COUNTRY PARTNERSHIP FRAMEWORK
FOR
THE REPUBLIC OF TURKEY
FOR THE PERIOD FY18-FY21
July 28, 2017 Turkey Country Management Unit Europe and Central Asia The International Finance Corporation Europe and Central Asia The Multilateral Investment Guarantee Agency
This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank Group authorization.
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CURRENCY EQUIVALENTS Exchange Rate Effective July 28, 2017
Currency Unit 1 TL = 3.56 US$
FISCAL YEAR January 1 – December 31
ABBREVIATIONS AND ACRONYMS
ASA Advisory Services and Analytics IFC International Finance Corporation B40 Bottom 40 percent of the population IFI International Financial Institution
BOTAS Boru Hatlari ile Petro Tasima A.S. IMF International Monetary Fund CEM Country Economic Memorandum IPA Instrument for Pre-Accession CLR Completion and Learning Review IPARD Instrument for Pre-Accession in Rural Development CPF Country Partnership Framework MIGA Multilateral Investment Guarantee Agency CPS Country Partnership Strategy MSME Micro, Small, and Medium Enterprises CTF Clean Technology Fund NBFI Non-Bank Financial Institution DP Development Program NCD Non-Communicable Disease
DPL Development Policy Loan NPL Non-Preforming Loan DPO Development Policy Operation OECD Organization for Economic Co-operation and
Development EBRD European Bank for Reconstruction and Development OIZ Organized Industrial Zones
EC European Commission PforR Program for Results ECA Europe and Central Asia PISA Program for International Student Assessment
ESMAP Energy Sector Management Assistance Program PLR Performance and Learning Review EU European Union PPP Public-Private Partnership
EUR Euro RAS Reimbursable Advisory Services FDI Foreign Direct Investment SCD Systematic Country Diagnostic FSA Financial Sector Assessment SIDA Swedish International Development Agency FRiT Facility for Refugees in Turkey SOE State-Owned Enterprise FY Fiscal Year SORT Systematic Operations Risk-rating Tool
FSRU Floating Storage and Regasification Unit SuTP Syrians under Temporary Protection GDP Gross Domestic Product TA Technical Assistance GEF Global Environment Facility TANAP Trans-Anatolian Pipeline
GFDRR Global Facility for Disaster Reduction and Recovery TIMSS Trends in International Mathematics and Science Studies GHG Greenhouse Gas WB The World Bank IBRD International Bank for Reconstruction and Development WBG The World Bank Group ICT Information and Communication Technology
IBRD IFC MIGA Vice President: Director: Task Team Leader: Core Team Members:
Cyril E. Muller Johannes Zutt Eavan O’Halloran Ximena Del Carpio, Tamara Sulukhia, Alper Ahmet Oguz, P. Facundo Cuevas, Tunya Celasin, Donato de Rosa, Pinar Yasar
Dimitris Tsitsiragos Tomasz Telma George Konda, Aisha Williams, Enrique Lora
Keiko Honda Merli Baroudi Gianfilippo Carboni
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TURKEY COUNTRY PARTNERSHIP FRAMEWORK
Table of Contents I. INTRODUCTION .................................................................................................................. 1
II. COUNTRY CONTEXT AND DEVELOPMENT AGENDA ................................................... 1
II.1 Social and Political Context ................................................................................................. 1
II.2 Recent Economic Developments and Prospects .................................................................. 3
II.3 Poverty and Shared Prosperity ............................................................................................. 6
II.4 Development Challenges...................................................................................................... 7
III. WORLD BANK GROUP PARTNERSHIP FRAMEWORK .................................................. 9
III.1. Government’s Program and Medium-term Strategy .......................................................... 9
III.2 Lessons from the CPS Completion and Learning Review (CLR) and Independent Evaluation Group (IEG) Evaluations ........................................................................................ 10
III.3. Proposed WBG Country Partnership Framework FY18-21 ............................................ 12
III.4 Implementing the FY18-21 Country Partnership Framework .......................................... 25
IV. MANAGING RISKS TO THE CPF PROGRAM .................................................................. 28
Annex 1. CPF Results Matrix ...................................................................................................... 31
Annex 2. CPS (FY12-FY16) Completion and Learning Review Report ..................................... 43
Annex 3. Selected Indicators of Bank Portfolio Performance and Management ........................ 70
Annex 4. Operations Portfolio (IBRD/IDA and Grants) .............................................................. 71
Annex 5. Statement of IFC’s Held and Disbursed Portfolio ........................................................ 72
Annex 6. MIGA Active Guarantees.............................................................................................. 75
Annex 7. Summary note of Country Gender Assessment 2016 ................................................... 76
Annex 8. Citizen Engagement Roadmap for Turkey CPF FY18-21 ............................................ 79
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COUNTRY PARTNERSHIP FRAMEWORK FOR TURKEY (FY18-21)
I. INTRODUCTION
1. This Country Partnership Framework (CPF) for Turkey covers the period FY18-21. It is aligned with the objectives of Turkey’s 10th Development Plan and is based on the findings of a World Bank Group (WBG) Systematic Country Diagnostic (SCD) that was finalized in February 2017. The CPF aims to help Turkey to achieve its development objectives through building on the foundations of the existing program and consolidating gains in key areas where the WBG is already active, as well as developing the program further in areas which target the WBG twin goals of reducing extreme poverty and boosting shared prosperity. The CPF puts forward a flexible approach for the WBG’s program that is appropriate for a middle-income country of Turkey’s size and takes account of the evolving country and regional situation. 2. The choice of CPF priorities and objectives was informed by a broad consultative approach undertaken both in the preparation of the SCD and of the CPF. The SCD was prepared following several rounds of discussions with Turkey experts, academia, private sector, investors, and civil society actors. The CPF benefited from strategic consultations with Government on the role of the WBG in Turkey for the CPF period that allowed for alignment of the program with client demand. It also benefited from discussions with a variety of stakeholders, private sector representatives and development partners whose feedback was incorporated into the design of the CPF.
II. COUNTRY CONTEXT AND DEVELOPMENT AGENDA
II.1 Social and Political Context 3. Turkey has achieved commendable economic and social development results since the early 2000s, raising it to the world’s 17th largest economy and establishing it as a global presence. Macroeconomic stability, financial sector reform, closer economic ties with the European Union (EU), and a transformation of a significant part of the economy away from agriculture into manufacturing and services were core contributors to Turkey’s growth. Broad reforms supported a dynamic private sector, opened the country to foreign trade, incentivized significant infrastructure investments and resulted in higher incomes as well as increasing convergence of social indicators to OECD norms. Turkey’s GNI per capita rose from $3,115 in 2001 to $11,000 in 2015: poverty incidence more than halved and extreme poverty fell even more dramatically. Turkey’s development successes have been justifiably lauded, with many countries looking to its development model for inspiration. 4. Going forward, Turkey is facing political, security and economic challenges. In recent years, various commonly-accepted indicators of the quality of a country’s institutions (including Doing Business, the Corruption Perceptions Index, and the World Economic Forum’s Competitiveness Index) have shown that Turkey remains below the levels obtained in high-income countries, and that the distance from the frontier has been widening. Since early 2015, the country
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has also experienced a series of political challenges, including a long election cycle (with parliamentary elections in both June and November 2015), a Cabinet reshuffle in May 2016, and a failed coup attempt in July 2016. Following the failed coup attempt, the government decreed a state of emergency to undertake what it has described as counter-terrorism measures, including the dismissal of civil servants and the transfer of assets of some entities that it has found to be linked with terrorist organizations. In April 2017, voters approved a set of constitutional reforms that will create an executive presidency and bring about important changes in the relations between Government branches.
5. Regional dynamics and impacts from the Syrian conflict are also imposing significant challenges. The government of Turkey is hosting about three million Syrians who have the status of Syrians under Temporary Protection (SuTPs). Turkey is providing for the SuTPs under its own laws and mostly at its own expense, including registration, freedom of movement, housing, health and education services and prospects for legal employment (less than ten percent of SuTPs are hosted in camps). Despite this commendable approach, the presence of such a large number of SuTPs is creating pressures on services and the labor market. At the same time, the geopolitical turmoil in the Middle East region and its implications for the east and south-east of Turkey have affected local economies in some regions, depressed tourism and discouraged investment.
6. Turkey’s relationship with the EU is characterized by peaks and troughs. It has benefited significantly from EU economic ties since the 1995 customs union agreement. In 2005, it initiated EU accession negotiations, which provided an anchor for its reform path and a strong positive indicator of its long-term aspirations. Although the EU negotiations have slowed down since the early 2010s, two new chapters in the accession process were opened in 2015/16. In late 2015, the crisis resulting from high numbers of SuTPs crossing from Turkey into Europe appeared to provide an incentive for quicker progress. Turkey agreed to work further with the EU to stem the transit of irregular migration to Europe, while the EU agreed to admit SuTPs from Turkey via a humanitarian admission scheme, accelerate the updating of the Customs Union, the EU negotiation process and the possibility of Turkish visa-free access to the EU. The EU also pledged €6 billion in assistance to host SuTPs in Turkey. While the irregular crossings from Turkey to Greece have greatly decreased and €3 billion in EU support was committed, progress on visa-free access to the EU Schengen Area for Turkish citizens and developing the Voluntary Humanitarian Admission Scheme for resettlement of SuTPs to the EU has remained slow. Even so, because the EU remains Turkey’s largest trading and development partner, taking about half of exports, harmonization to EU trade and investment standards will continue to dominate Turkey’s reform agenda. 7. Even within this challenging environment, Turkey’s development foundations remain sound. Sitting at the crossroads of Asia and Europe, with a dynamic private sector and young population, and access to the EU, Turkey continues to attract global investors. Strong macro-economic management enabled Turkey to weather the global financial crisis relatively well. But past achievements are no guarantee of future success. How well it copes with its current political, social and economic challenges will determine how much foreign and domestic investment it continues to attract, and when it will achieve its aspiration to become a high-income country.
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II.2 Recent Economic Developments and Prospects
8. Turkey quickly rebounded from the 2009 global financial crisis, enjoying high growth rates until 2015, at the expense of large external and internal imbalances. Its GDP grew on average by 7.4 percent between 2010 and 2015, dwarfing the growth rates in peer countries. It experienced a sizeable current account deficit to keep the investment rate above 25 percent of GDP. While these investment rates helped it catch up, there is still room for improving the quality of investments as more than half of spending was in construction. Prudent fiscal management has been a cornerstone of Turkey’s good economic performance, but accommodative monetary policy has amplified the effects of cheap foreign finance, exacerbating internal and external vulnerabilities, with persistent current account deficits and an inflation rate above target.
Table 1: Key Macroeconomic Indicators and Projections1 Indicators 2013 2014 2015 2016 2017f 2018f 2019f 2020f
Real Economy Annual percentage change, unless otherwise indicated
Real Gross Domestic Product (GDP) 8.5 5.2 6.1 2.9 4.0 3.5 4.0 4.0 Private Consumption Contributions (in percentage points) 5.0 1.9 3.4 1.4 3.0 1.9 2.2 2.1
Government Consumption Contributions (in percentage points) 1.1 0.4 0.5 1.0 1.2 0.3 0.5 0.5
Gross Fixed Investment Contributions (in percentage points) 3.8 1.5 2.7 0.9 0.9 1.1 1.2 1.4
Exports, GNFS, Contributions (in percentage points) 0.3 1.8 0.9 -0.5 1.3 1.2 1.2 1.1
Imports, GNFS, Contributions (in percentage points) -2.1 0.1 -0.4 -0.9 -1.0 -1.0 -1.1 -1.2
Consumer Price Index (average) 7.5 8.9 7.7 7.8 10.1 8.6 7.9 7.1
Fiscal Accounts Percent of GDP, unless otherwise indicated Total Revenues 34.6 33.8 34.2 34.7 34.3 34.1 34.3 34.2 Expenditures 35.2 34.3 34.3 36.3 36.4 35.8 35.7 35.4 General government balance -0.6 -0.5 -0.1 -1.6 -2.1 -1.6 -1.3 -1.2 Government Debt Stock 33.5 31.0 30.0 30.5 30.0 29.4 27.9 26.7 Balance of Payments Percent of GDP, unless otherwise indicated Exports Total 22.0 23.6 23.1 21.9 25.1 25.7 26.3 27.3 Imports Total 28.0 27.6 25.9 24.8 28.9 29.3 30.1 31.4 Primary and Secondary Income -0.8 -0.7 -1.0 -0.8 -0.9 -0.9 -0.9 -0.7 Current account balance (% of GDP) -6.7 -4.7 -3.7 -3.8 -4.7 -4.5 -4.6 -4.8 Net Foreign Direct Investment 1.0 0.6 1.4 1.1 1.1 1.2 1.3 1.4 Net Portfolio Investment 2.5 2.2 -1.8 0.7 1.8 1.8 1.8 1.9 Net Other Investment 4.1 1.6 1.6 0.8 0.9 1.5 1.5 1.6 Change in Reserve Assets -1.0 0.1 1.4 -0.1 0.9 0.0 0.0 -0.1 Net Errors and Omissions 0.2 0.2 1.2 1.3 0.0 0.0 0.0 0.0 Memorandum Item Nominal GDP (billion TL) 1,810 2,045 2,338 2,591 2,973 3,339 3,751 4,181 Source: WB and IMF estimates (February 2017), TURKSTAT, Ministry of Development, Central Bank of Republic of Turkey 9. Turkey’s GDP growth declined to 2.9 percent in 2016, amid geopolitical turmoil, unfavorable global developments and the failed coup attempt (Table 1). Following the failed coup attempt, households delayed spending (especially on durable goods) and corporates postponed key investments decisions, resulting in lower consumption and investment, which was only partly offset by higher government spending. On the external side, imports fell due to slower 1 Figures in this table reflect the decision taken in December 2016 to revise the methodology for national accounting to align with EU regulations (ESA 2010). The revisions increased 2015 GDP by about $140 billion to $851 billion, increased GDP per capita by $2,000 to more than $11,000, and annual growth rates increased: the average growth rate for 2002-07 increased from 6.8% to 7.9%, while the average growth rate for 2012-15 increased from 3.3% to 6.2%.
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domestic demand, and exports contracted due to weaker external demand and volatility in economic ties with some trading partners. The non-agricultural unemployment rate rose from 12.1 percent in January 2016 to 14.3 percent in December 2016. 10. The current account deficit slightly increased to 3.8 percent of GDP in 2016, mostly due to falling tourism revenues and has started to widen in 2017 along with the rebound in global oil prices. The current account deficit declined from 6.7 percent of GDP in 2013 to 3.7 percent of GDP in 2015, thanks to cyclical factors, such as an increased gold balance and a smaller energy bill owing to the collapse of global oil prices. While the core balance remained mostly flat due to weaknesses in Turkey’s main trading partners, the services balance deteriorated due to substantially lower tourism revenues resulting from security concerns and Russian sanctions. This offset the improvement in the energy bill, increasing the current account deficit to 3.8 percent of GDP in 2016. In 2017, the energy and gold excluded trade deficit has started to narrow, thanks to strengthening growth in the EU. Going forward, possible rising energy prices are expected to lead to a larger current account deficit in the medium-term. 11. Portfolio outflows from the bond market accelerated in late 2016, due to domestic and external factors but recovering modestly in 2017. The result of the United States (US) presidential election and anticipation that the Federal Reserve will increase interest rates faster than originally expected decreased global risk appetite, triggering outflows from most developing countries. In Turkey, slowing GDP growth, rising inflation, a widening current account deficit and the unorthodox response of the Central Bank to a depreciating lira triggered investor concerns. Against this backdrop, outflows (non-residents) from the bond market amounted to $3.2 billion in Q4, while the equity market witnessed marginal inflows. The outflows increased the benchmark 2-year government bond yield by more than two percentage points, to 11.15 percent, while the lira depreciated by more than 25 percent between the end of Q3 and the end of January 2017. Improvements in global risk appetite have triggered capital inflows to developing economies in 2017, with inflows into the Turkish bond market amounting to $1.7 billion in January-April. 12. Monetary policy decisions in the past three years have allowed inflation consistently to exceed the central bank’s 5 percent target. A-sharp increase in food prices, persistent depreciation of the lira, and accommodative monetary policy kept inflation well above the target in 2014 and 2015. In 2016, inflation reached 8.5 percent, with lower food inflation offset by tax increases on cars and tobacco products and higher transport and energy prices. The foreign-exchange pass-through associated with rapid lira depreciation, higher global energy prices and unfavorable weather conditions fed into prices and pushed headline inflation to 11.9 percent and core inflation to 9.4 percent by April 2017. In May, headline inflation slightly declined to 11.7 percent. Inflation is likely to hover in low double-digit levels throughout the year 2017.
13. Rapid depreciation of the lira prompted the central bank to increase interest rates in 2016-17. The central bank started simplifying its complex unorthodox monetary policy framework in March 2016 and narrowed the width of its interest rate corridor by cutting the overnight lending rate by 250 bps through September, but it followed an expansionary rather than neutral approach. Following rapid depreciation of the lira in late 2016, it reversed course and increased the 1-week repo and overnight lending rates by 50 bps and 100 bps, respectively, over November to January, and also returned to its previous policy framework. In January 2017, avoiding an outright hike in
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the policy rate, it ceased 1-week repo auctions and provided funding at the overnight lending rate at 9.25 percent and a late liquidity window rate at 11 percent in order to support the lira. The Central Bank further increased the late liquidity window rate to 11.75 percent in March and to 12.25 percent in April, taking into account the upward trend in inflation. Market watchers continue to seek a more orthodox policy framework to restore confidence, stem lira depreciation, and maintain price and financial stability. 14. Fiscal policy provided a considerable stimulus to growth in 2016 and 2017. While the Government maintained fiscal discipline in 2012-2015, with the central government budget deficit averaging 1.0 percent of GDP and the primary surplus averaging 1.5 percent, central government expenditures grew by 15.4 percent in 2016, due to increases in wages, transfers, and purchases of goods and services. A fall in capital spending and interest expenditures as a share of GDP helped to contain the increase in total expenditures. Despite lower economic activity, revenues grew by 14.8 percent because of tax restructuring and amnesties. As a result, the central government budget posted a moderate deficit of 1.1 percent of GDP in 2016, in line with fiscal targets. Expansionary fiscal policy will likely lead budget balances to exceed fiscal targets in 2017, while the growing PPP portfolio will warrant closer monitoring. 15. GDP growth is projected to increase to 4 percent in 2017 and remain at 4 percent in the medium term. In 2017, growth is expected to be driven by consumption (triggered by fiscal measures) and by net exports. As the fiscal stimulus is assumed to be temporary, GDP growth is expected to slow to 3.5 percent in 2018, before reverting to 4 percent in 2019 and 2020 on the back of reduced economic and political uncertainty.
16. Turkey’s growth model faces challenges that are likely to keep growth subdued in the medium-term. With an expected tightening in global liquidity in the medium-term, Turkey`s large external financing requirements pose downside risks to growth. The 2016 current account deficit of 3.8 percent is expected to rise to 4.7 percent of GDP in 2017, and external debt equivalent to almost 20.3 percent of GDP is coming due by early 2018. Turkey has lost its investment grade status from all three major ratings agencies, which is likely to impact financing costs, worsen investment and consumer sentiment, and curtail investment and consumption. In an adverse scenario of tightening global liquidity, a new round of lira depreciation would put more strain on corporate balance sheets, depressing private investment and lowering GDP growth. Although banks are not allowed to hold net open currency positions, defaults in the corporate sector could also have an adverse impact on the banking sector through credit risk channels. Despite trending upward, non-performing loans (NPLs) currently are low at 3.2 percent and well-provisioned, providing comfort in case of an additional deterioration in credit quality. That said, banks have limited resources to support further loan growth, since the deposit base grows slowly, uncertainty concerning global liquidity constrains foreign borrowing, and low profitability prospects might entail additional capital injection to prevent erosion in banks’ capital adequacy. Fiscal prudency will be important in reducing internal and external imbalances in the medium term.
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II.3 Poverty and Shared Prosperity 17. Turkey has made significant progress in reducing poverty and boosting shared prosperity. Over 2002 to 2014, the poverty rate fell from 44 percent to 18 percent (under the regional poverty line of US$5/day) and extreme poverty (US$2.50/day) fell even more rapidly, from 13 to 3.1 percent.2 Despite macroeconomic volatility and productivity differences, both moderate and extreme poverty decreased in rural and urban settings. Rural poverty went down from 54 to 33 percent, and urban poverty from 37 to 11 percent in this period. The major driver for poverty reduction was economic growth, as opposed to redistribution, with growth accompanied by more and better income generation opportunities for the low income population. 18. Turkey’s prosperity has been shared, improving the wellbeing of those at the bottom of the distribution. Shared prosperity, measured by the growth in consumption per capita of the poorest 40 percent of the population (B40), has been significant in Turkey. The annualized growth of consumption per capita of the B40 attained 4.3 percent between 2007 and 2012, close to the growth rate in consumption of the entire population. This represents a good performance compared to peer countries – better than OECD peers Mexico and Chile but lower than Russia and Brazil. 19. Despite this progress, wide differences persist between regions. Most regions have seen a reduction in poverty over time, with a general convergence trend occurring: however, the pace of progress has varied depending on the region, with some falling increasingly behind others, resulting in regions that are becoming more heterogeneous over time. The gap in GDP and poverty remains large between the prosperous West and the more challenged Southeast Anatolia. The poorest regions of the south-east now host large numbers of SuTPs and other refugees from the conflicts in neighboring Syria and Iraq. Moreover, the poorest regions have also seen significant under-investment in their abundant natural capital which, through degradation, is eroding potential pathways out of poverty and delaying economic convergence. Several incentive programs were launched to stimulate investment in these regions and the impact is expected to be seen in the near future.
20. In addition, there are large inequalities across socio-economic groups and gender. Though growth has been progressive and prosperity shared, the average income of the richest 10 percent is 13.5 times higher than the average income of the poorest 10 percent of the income distribution. This ratio is among the highest in the OECD. Inequality fell significantly for most of the 2000s, but the trend was reversed after the 2008/09 financial crisis. Moreover, women’s participation in the economy is still severely limited. While it has increased steadily in the past few years, female labor force participation remains just 33 percent, the lowest in the OECD and ECA. Turkey ranks 130th among 145 countries in the Global Gender Gap.
2 Poverty and extreme poverty are measured using the thresholds that the World Bank adopts for countries in the Europe and Central Asia (ECA) region. The poverty line is set at US$5.00 per day, and the extreme poverty line at US$2.50 per day, both in terms of 2005 purchasing power parity (2005 PPP). An individual is considered (extreme) poor if his/her expenditure per capita per day is below the (extreme) poverty line. For Turkey, expenditure data comes from the Household Budget Survey (HBS), collected by Turkey’s National Statistics Office (TUIK).
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Summary of 2016 Country Gender Assessment (Further details in Annex 7) Turkey has substantially narrowed gender gaps in access to productive endowments and thus to economic opportunity. Between 2008 and 2013 maternal mortality rates were cut by half, secondary and tertiary education enrolment rates among women and men moved further towards convergence, and female labor force participation increased steadily. These outcomes have been partly the consequence of improvements to the legal and institutional framework for gender equality. However, despite these commendable advances, women still show systematically poorer outcomes than men across significant dimensions, and Turkey lags behind countries with similar income levels and its neighbors in this regard. Turkey ranks 130th among 145 countries according to the World Economic Forum’s “Global Gender Gap Report 2016”. Aggregate figures mask substantial socioeconomic and regional disparities, with women from vulnerable backgrounds bearing the brunt of the existing gender gaps in access to endowments and opportunity. Turkey has one of the lowest female labor force participation rates among countries with similar income levels, with only 33 percent of Turkish women economically active, compared to 62 percent on average in upper-middle-income countries. Women are also under-represented in entrepreneurship and business ownership and management, a situation related to significant socio-cultural as well as economic barriers to enter and remain in those activities. In particular, the gap in financial inclusion between men and women remains comparatively large. As an example, in 2014, 70 percent of men had formal accounts compared to only 44 percent for women. Women´s agency remains comparatively weak. At 14.9 percent in 2015, the share of female Parliamentary representatives remains well below the ECA average of 25.7 percent. The proportion of women in ministerial positions is even lower, at 4 percent, and compares poorly with the average 21.8 percent registered in ECA for 2015. At the local level the picture does not change much: a mere 4 percent of the representatives in local governing bodies are women.
II.4 Development Challenges
21. A recently-completed Systematic Country Diagnostic (SCD) identifies the key binding constraints to completing Turkey’s transition to a high income country, creating more and better jobs, reducing poverty and boosting shared prosperity sustainably. The analytical framework is structured along four main areas: (a) Solid Foundations, which looks into institutions, markets, economic and social stability; (b) Productive Individuals, which examines people’s access to skills, education, health, and economic opportunities across regions; (c) Dynamic Firms, which assesses firms’ access to financing, innovation, and investment opportunities; and (d) Public Assets and Resources, which analyzes connectivity, infrastructure, and protection of natural resources. . 22. The main challenges in the area of Solid Foundations are related to enhancing the quality of regulatory and accountability institutions; addressing the impact of geopolitical turmoil in the Middle East; developing capital markets; and mitigating macro-fiscal risks. Improving the quality of institutions will increase the ability to attract capital, promote innovation, and safeguard natural resources. A second key bottleneck is the geopolitical turmoil in the Middle East and its spillover impacts on southeast Turkey: a stable and safe environment is crucial to expand services, attract investment, create jobs and incentivize human capital accumulation. Capital markets that need deepening are a third bottleneck, contributing to gaps in formal saving and borrowing patterns, financial literacy and women’s access to financial services, and constraining the ability of small firms to expand and innovate. Fourth, Turkey faces external vulnerabilities stemming from macro-fiscal risks, including particularly a dependence on foreign savings and roll-over needs for its large stock of short-term debt; in this context, increased global risk aversion may expose Turkey to accelerating capital outflows.
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23. In the area of Productive Individuals, the main challenges are low educational achievements, limited female economic participation, and economic and social exclusion in lagging regions. Firms can move up the value chain more effectively when they can hire tertiary education graduates and when those graduates have benefited from good-quality lower levels of education (including preschool) that provide the right cognitive and behavioural foundations. Low female labor force participation constrains economic growth and inclusion, and presents a challenge where Turkey finds more room for improvement vis-a-vis high income countries. Limited supply of affordable care for children and the elderly, and cultural norms reinforcing the patriarchal structure of the family prevailing in some regions have been constraining more active participation of women. Finally, regional economic and social inequalities persist and outcomes in lagging regions remain slow to converge to more advanced regions.
24. In the area of Dynamic Firms, a transition away from low-tech products is underway, but high-tech products currently provide only a small share of overall value-addition, and the share has been declining in recent years. Turkey has a number of well-funded programs to encourage private sector innovation. In 2016, the government adopted new legislation to provide further support, including a new R&D law, an investment climate law and an industrial property law. Nevertheless, there is room for improvement: Turkey’s low performance in technology absorption and innovation is especially visible in R&D and innovation indicators collected by the OECD. This constraint is linked with low educational achievement: poor human capital reduces the scope for innovation. It is also linked to the quality of regulatory and accountability institutions which should be improved to provide better incentives for private investment, innovation and entrepreneurship. Corporate governance as well as competition policy and its enforcement are additional crucial constraints that need to be strengthened for supporting the dynamism of Turkey’s firms. The Government has taken important steps by enacting a series of laws over the past year to incentivize R&D investment, improve the investment climate and align the industrial property framework with international standards. However, strengthening the regulatory and accountability institutions will be key to achieve success in effective implementation of these measures.
25. In the area of Public Assets and Resources, constraints relate to land, water, energy and congestion. Some cities (Istanbul and Kocaeli) are suffering from congestion, thus endangering the benefits of agglomeration which have contributed to growth and poverty reduction in the past. Financing and capital investment planning, consistent with territorial plans, is essential for sustaining urban growth. Connecting people and jobs efficiently at low environmental cost is essential for safeguarding competitiveness and sustainability. While water availability is generally sufficient now, projections for growth in water use may surpass availability by 20303 and this could put a brake on growth in agriculture and industry, while gravely affecting well-being. Improving the efficiency of energy consumption and reducing dependence on imported energy is also critical for competitiveness and sustainable economic growth. Inefficient land management affects city planning and financing of municipal infrastructure, as well as rural well-being.
3 Ministry of Forestry and Water Affairs, 2016: “Assessment of Climate Change Impact on Water Resources”, General Directorate of Water Management, Turkey.
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III. WORLD BANK GROUP PARTNERSHIP FRAMEWORK
III.1. Government’s Program and Medium-term Strategy 26. Turkey’s overarching development goals are outlined in its 10th Development Plan (DP 2014-2018), which was launched in 2014. The 10th DP follows many of the same priorities that were pursued under the 9th DP, underscoring Turkey’s sustained commitment to a broad set of reforms and development programs. Implementation of successive DPs has been commendable. Respective DPs have traditionally formed the basis of the partnership between Turkey and the WBG, with the previous Country Partnership Strategy (CPS) (FY12-16) aligning its objectives with those of the 9th DP (covering 2007-13) and the CPS Progress Report (2014) allowing for alignment with the 10th DP objectives. 27. The DP diagnoses the key challenges that Turkey needs to overcome to escape the “middle income trap” and succeed in becoming a high-income country. It has four High Level Objectives (1) Innovative Production, Stable and High Growth (this targets macroeconomic measures, productivity improvements, energy, logistics, infrastructure and greater innovation and technological capacity); (2) Qualified Individuals and Strong Society (this focuses on social welfare, health, education, public services, and employment); (3) Livable Places and Sustainable Environment (this focuses on reducing regional disparities, promoting sustainable cities and services, and using natural resources responsibly); and (4) International Cooperation for Development (this focuses on sharing Turkey’s positive development experiences with other countries). Under the first three of these objectives is a set of 25 Transformation Programs that outline in more detail the reforms to be pursued and the types of investments to be made. Turkey also produces EU Pre-Accession Economic Reform Programs (ERP) that detail short- and medium-term policy actions and structural reform priorities related to EU accession. The last ERP covering 2017-2019 was issued in January 2017.
28. The Government remains committed to the 10th DP and its Transformation Programs. The reform path and investment priorities for these programs have been detailed and implementation is underway, with various degrees of progress depending on the program. At the same time, the WBG’s SCD shows a prioritization of development challenges that is closely aligned with DP objectives, even though the SCD is a fully independent diagnostic that did not seek alignment (see Figure 1). This confirms that the DP provides a solid foundation on which to build and, therefore, that the focus going forward should be on accelerating implementation.
29. Within the DP framework, the Government carefully considers which development partners it engages for which Transformation Programs and how that engagement is designed and delivered. With a large range of potential partners and access to financing on international markets, Turkey has traditionally engaged partners, including the WBG, in a deliberate manner, both for financing and advisory services. In preparing the DP, the government solicited the WBG’s advice generally, but requests for WBG financial support and investments have been much more selective (as noted in the Completion Learning Review -). This demand-driven approach will continue in Turkey.
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Figure 1: SCD priorities (mapped to prioritized 10th DP transformation programs)
III.2 Lessons from the CPS Completion and Learning Review (CLR) and Independent Evaluation Group (IEG) Evaluations 30. The CLR concluded that WBG engagement was effectively aligned with Turkey’s own development objectives. The alignment with the DP guided the CPS design. This, together with a strong sense of selectivity on the part of the Government with respect to where and how to engage IBRD financing, resulted in a smaller portfolio that was concentrated in the energy and financial sectors, and this contributed to IBRD’s achievement of intended results. Nevertheless, an important conclusion of the CLR is that the size of the Turkish economy relative to IBRD’s program meant there were challenges in demonstrating clear linkages between the WBG program’s contribution and country-level outcomes, and attributing results to WBG interventions will remain difficult. 31. A joint WBG CPS facilitated a coordinated strategy, and joint programs (involving sustained and sequenced interventions) generally achieved better results. In several instances (municipal development, energy, the financial and health sectors), IBRD supported policy reforms upstream (through DPLs) that helped establish stronger foundations, paving the way for IFC/MIGA engagement and private sector investment downstream (Figure 2 shows how this “Cascade”4 approach was achieved for the energy sector). Exploiting its convening and leveraging capacity, IBRD also deployed upstream policy advice and capacity building to enable non-WBG partners to step into a maturing and better-performing sectoral framework and finance investments.
4 The cascade approach implies an increased and more systematic emphasis on upstream reforms at the country and sector level (“mainstream the upstream”) and a renewed determination to focus concessional and public resources where they can have the greatest development impact (“shift the default”).
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Figure 2: The cascade approach in action: sequenced WBG interventions in the power sector enhanced private sector investment and created a competitive market
32. Significant time and efforts are needed to develop new areas of WBG business, particularly for IBRD project financing. IFC’s success in growing its program in Turkey resulted largely from investing in long-term partnerships with companies and municipalities, facilitated by establishing an IFC hub in Istanbul, which is IFC’s largest office outside of Washington, DC, headquarters. IBRD success in energy and the financial sector similarly required long-term engagement to build trust, demonstrate value, establish commitment and build knowledge of working with World Bank procedures. The CLR recommends that the WBG program continue to focus on sectors where such relationships already exist, programming has been successful, and expressed client demand remains high. At the same time, the CLR concludes that broadening the program to address new development priorities should proceed, albeit with an approach that is deliberate because it will involve significant start-up costs, long gestation and uncertainty regarding future success. 33. Advisory Services and Analytics (ASA) is a cornerstone of the WBG’s program in Turkey but going forward it needs to be more responsive to client demand and ownership. To enhance the WBG’s development impact, ASA should engage strategically in sectors where the WBG has a comparative advantage, where policy or institutional reform is actively under consideration, where needed data is available, and where government counterparts with the power to make decisions know the WBG and seek to benefit from its knowledge. The WBG should continue to focus its ASA and consider developing further a Reimbursable Advisory Services (RAS) business where applicable and where there is client demand. In addition, there will remain space for more ASA in new areas that try to initiate a dialogue in a subject matter in line with the national development objectives of Turkey and the twin goals of the WBG.
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III.3. Proposed WBG Country Partnership Framework FY18-21 34. The overall objective of the new CPF is to help Turkey to achieve more sustainable and inclusive growth. Turkey’s strong underlying fundamentals, its robust DP, and its long-standing partnership with the WBG provide a good framework for designing a WBG program that will help Turkey to reduce poverty and enhance shared prosperity. At the same time, geopolitical, security and economic developments are also challenging Turkey’s ability to maintain or consolidate some of its recent gains. In this environment, the WBG needs to adopt a flexible approach that remains focused on key medium- and long-term objectives, mostly in known work-programs, but that also responds to opportunities and makes midcourse corrections in the light of changing circumstances. Notably, lessons learned from the past WBG partnership in Turkey, e.g., in the energy sector, emphasize the need for a selective, persistent and supportive engagement with a view to building trust and demonstrating the WBG’s value in helping Turkey pursue its development goals. 35. Three selectivity filters are used to define the WBG program, both at the strategic level and at the objective level:
36. Selectivity filter 1: Alignment with the 10th DP. The CPF aims to support DP implementation by contributing to positive momentum and discouraging backsliding on articulated reforms. This involves assessing critically where the WBG can best add value to DP implementation, where it can deepen or accelerate positive change, and where it can help shape an appropriate response to specific issues (particularly those involving the WBG’s twin goals). 37. Selectivity filter 2: Focus on SCD priority challenges. The development priorities of the SCD and the DP are strongly aligned; together they guide the choice of CPF areas of intervention. In most cases, the SCD highlights areas where the WBG’s ongoing program is already providing support (e.g., macro-fiscal risks, financial markets, female labor force participation, regional differences, congested cities, energy, land management) and so these areas are obvious choices for continued engagement to consolidate and scale-up progress. That said, the CPF will not address all SCD priority challenges. For example, while terrorist-related insecurity is a major challenge, it is also one that lies beyond the WBG’s mandate and expertise. In addition, while the program necessarily focuses on the governance and regulatory framework in sectors where the WBG is active (i.e., energy, health care, the financial sector, and the business environment more generally), there are areas where it is not fully agreed how such issues can most effectively be addressed by the WBG, or where the issues are too distant from WBG expertise or engagement in Turkey to be an effective and constructive partner. In this context, an opportunistic approach will be adopted to stepping up the program where feasible. Finally, the SCD identifies several issues – namely, declining water availability, inefficient small-holder farming, and low performance in innovation and technology absorption – where the WBG has significant expertise that it could leverage but
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where the future program is not yet clearly elaborated; hence WBG work in these areas will depend on an ability to achieve a common understanding and define an agreed work-program over the CPF period. 38. Selectivity filter 3: WBG comparative advantage: The CPF builds on strengths in the ongoing program where the WBG has a comparative advantage in four distinct ways through: (i) building on the already-fruitful relationships with government and the private sector in areas
where partnerships are mature and which present obvious choices for continued engagement to consolidate and scale up progress. These strong partnerships, together with the fully-joint WBG nature of the CPF, allow for the cascade approach to be deployed effectively. Efforts will a lso continue to encourage the client to make broader use of all WBG instruments while recognizing that agreed areas will likely present opportunities for follow-up lending and consolidate results over a longer term. Capitalizing on its significant and long presence through its office in Istanbul and well established relationships with different stakeholders, IFC will continue to focus on areas where its interventions will contribute to create new markets and help boost Turkey’s private sector-led growth;
(ii) exploration of other opportunities by selectively advocating for new engagement in areas that the SCD highlighted for accelerating poverty reduction and enhancing shared prosperity;
(iii) continued coordination and collaboration with other development partners, notably the EU and other IFIs, to maximize the leverage of WBG support; and
(iv) relationship building at central and municipal levels, with NGOs, academia and civil society to ensure the program has as broad a perspective as possible on country developments and events.
39. The CPF objectives are grouped into three focus areas with nine CPF objectives.
Figure 3: CPF areas of engagement (mapped to SCD priorities)
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40. Gender concerns are central to the program through being embedded in the CPF objectives. The CPF draws on the recent Country Gender Assessment for Turkey (Annex 7) and places gender issues squarely in four of the nine CPF objectives. The CPF objective on women’s increased labor force participation puts Turkey’s gender development challenge at center-stage. Two other CPF objectives, focused on access to finance and on education and health services, directly target interventions on women. In addition, the CPF objective on improving the sustainability and resilience of cities aims to ensure that service delivery in supported cities targets and monitors impact on female beneficiaries. 41. The results framework reflects the flexible approach of the CPF. The program design and expected results are more certain in the early years of the CPF, where client demand is already expressed and where the contribution of the WBG’s program can be more clearly defined. In the outer years of the CPF, the engagement will evolve in response to country circumstances and government requests for support; hence the definition of expected results for this later period will be provided in the PLR. Given the large start-up costs and long timeframe related to new areas of IBRD engagement, flexibility will be manifested in choosing areas of engagement, instruments, and timeframes, both of financing and knowledge work. Focus Area 1: Growth
42. The WBG will continue to support government efforts to address challenges with respect to fiscal management, the financial sector, competitiveness, and private investment. Turkey rebounded quickly from the 2009 global financial crisis, enjoying strong growth until 2015. Prudent macroeconomic and fiscal management has been a cornerstone of Turkey’s good performance, but resilience to external shocks has weakened and vulnerabilities have increased. At the same time, the changes in the political context, geopolitical tensions, rising oil prices and an anticipated rise in US interest rates have dampened investor and consumer confidence and impacted growth prospects. Turkey’s bank-centric financial sector is also under stress, constraining credit to households and firms. To return to a higher growth path and convergence to high-income economies, the Government needs to continue to strengthen fiscal management, deepen institutional reforms to strengthen the rule of law and arm’s-length market regulation, and create the environment for a more effective and inclusive financial sector. Turkish firms need to increase productivity by boosting innovation and technology to add more value and create more and better jobs. Several of the DP’s Transformation Programs target these issues: Productivity Growth, Increasing Domestic Savings, Rationalization of Public Expenditures, Technology Development, and Business and Investment Climate. The SCD also identified these challenges under its pillars of Solid Foundations and Dynamic Firms. These challenges form the basis for the choice of CPF objectives under this first Focus Area: (i) increased fiscal space; (ii) enhanced access to finance to underserved segments; and (iii) enhanced competitiveness and employment in select industries.
CPF Objective 1: Increased Fiscal Space
Results indicators for Objective 1 Share of direct tax revenues in total tax revenues Establishment of a monitoring system for internal controls in public administration
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43. The WBG’s program aims to help the government to preserve fiscal space. This will involve a Public Finance Review (benchmarked against EU standards) that will focus on fiscal management, possibly including areas such as income tax law, risk management, internal audit and the analysis of the distributional impacts of fiscal policy. The policy recommendations from this ASA will underpin a proposed DPL series which will be a core part of the IBRD program and which would begin in FY18. The series will have a crosscutting focus in support of key economic reform priorities and the size and frequency will depend on the country situation, the strength of the reform program and financing needs. Further details on the scope of the reform program supported by the DPL series will only become known during its preparation and will thus be provided in the future CPF Program and Learning Review (PLR).
CPF Objective 2: Enhanced Access to Finance to Underserved Segments
Results indicators for Objective 2 People, micro, small and medium enterprises (MSMEs) and exporters reached with financial services Increase in portfolio size of private pension investors/members
44. Turkey’s growth depends critically on a well-functioning and inclusive financial sector. This requires enhancing access to finance (especially for small and medium enterprises (SMEs), which account for 73.5% of jobs but receive only 24% of bank loans), expanding financial inclusion (40% of the population, mostly women, are unbanked), and deepening and diversifying financial and capital markets (e.g., developing long-term finance, increasing the size of institutional investors, diversifying corporate debt instruments, and expanding liquidity in the secondary market for corporate bonds). The banking sector overcame the recent global financial crisis without any state intervention, and exhibits good financial metrics; capital adequacy ratio at 15.6, non-performing loans at 3.2, return on assets at 1.50 and return on equity at 14.3 percent by the end of 2016. However, capital buffers, liquidity and profitability of the banks have been in a downward trend since the global crisis (although still remaining comfortably above the regulatory thresholds and there has been an increase in profitability recently) while there has been an upward trend in non-performing loans in recent years. The loan to deposit ratio has breached 123 percent, and banks have limited sources to support further loan growth due to: (i) low savings rates significantly limiting banks’ ability to attract new deposit, (ii) the uncertainty on global liquidity limiting foreign borrowing, and (iii) low profitability discouraging shareholders’ increase of capital. Going forward, Turkey needs to address concerns about financial sector risks and potential spillovers to the economy as a whole. The sector is vulnerable due to structural factors (high dependence on cross-border financing, high debt and savings held in foreign currency at short maturities) as well as cyclical factors (growing corporate leverage, rising corporate-bank and (contingent) corporate-sovereign exposures). While a recent IMF-WB financial sector assessment shows that banks’ capital buffers are resilient in the face of a short-term shock, a longer recession could force some to seek additional capital, which may be difficult in a context of possible future global liquidity constraints. 45. The WBG has a long engagement in many aspects of the financial sector and currently IFC, IBRD and MIGA deliver coordinated support through a portfolio of projects, investments and ASA. For the CPF period, this coordinated support will continue with a particular focus on stepping up finance to MSMEs and under-served segments and through robust ASA that will help inform government policy and underpin the DPL series. The ASA program
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will be coordinated to cover critical issues such as financial sector diversification, pensions, capital market development (including WB-IFC support to develop municipal bond markets and to develop the Islamic finance market) and analysis of sector headwinds and how to respond to them. The ASA will inform any potential new financial sector investment operations as well as reforms to be supported through the DPL series (such as reforms on pensions). IBRD will continue to work with the state banks, development banks and other financial institutions to support their countercyclical and market-gap-filling functions, especially through providing long-term financial sources. New financial sector line-of-credit operations may be provided where they extend access to finance (e.g., to MSMEs, to female- or refugee-owned businesses), incentivize investors in key sectors (e.g., energy or technology innovators), and deepen and diversify applicable and client demand-driven instruments (e.g., leasing and factoring, corporate bonds, infrastructure bonds, Islamic finance, and risk-sharing facilities). In this context, a new operation – Long Term Export Finance – was delivered in early FY17 to help address lack of long-term finance: this operation targets support specifically to exporters and MSMEs. During the course of the CPF, should the financial sector show greater vulnerability to down-side risks, the program can be adapted accordingly. 46. Enhanced access to finance is a key IFC priority. IFC will continue to work with financial institutions and intermediaries to expand the availability of funding to MSMEs, with a focus on rural areas, women-owned enterprises, and agribusinesses. It will continue to support banks and non-bank financial institutions (NBFIs) with longer-term funds to help them scale-up support to the underserved and unbanked. To deepen and diversify financial markets and reach underserved segments, IFC aims to leverage diverse instruments and means of funding, including supply chain finance, digital financial services, NBFIs (leasing companies, insurance companies, and pension funds), and distressed asset resolution platforms. IFC will also support alternatives to bank finance by investing in capital market instruments such as covered bonds, diversified payment rights (DPRs), green bonds, municipal bonds, and PPP project bonds (both in euros and lira). In order to address currency risks facing Turkish borrowers, IFC will seek to maximize lira financing and offer currency hedging instruments for real sector clients, PPP investments and municipalities with large external exposures. Recognizing increased risks of capital erosion, IFC may also help banks to strengthen their regulatory capital. Finally, IFC will closely coordinate with MIGA to respond to commercial lenders’ increasing demand for risk guarantees to enhance municipalities’ creditworthiness. 47. MIGA will continue its support to Turkey’s Eximbank. Given the Eximbank’s strategic role, MIGA provided it with guarantees covering the non-honoring of the financial obligation of state-owned enterprises in 2015 and 2016, thus helping to strengthen the financial sector as a whole and to support lending activities to MSMEs and export-oriented companies.
CPF Objective 3: Enhanced Competitiveness and Employment in Selected Industries
Results indicators for Objective 3 Employment supported by IFC clients Employment supported by IFC-supported equity funds
48. To create the jobs needed to employ the rapidly growing labor force and raise it to a higher income level, Turkish businesses need to improve their competitiveness through
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innovating, boosting productivity and moving up the value chain. The WBG program to date has focused its ASA on trade liberalization, competitiveness, the quality of exports, value chain progression in specified industries, the ability to attract foreign direct investment (FDI), and regional investment climates. This program is expected to be strengthened through analyzing past, and shaping future, efforts to improve the business environment, innovation and technology absorption (including through the links between FDI and local firms), subnational competitiveness, and trade in services, as well as to understand the drivers of competitiveness and productivity (as part of the upcoming Country Economic Memorandum (CEM)). Technical assistance (TA) is also planned to improve the regulatory environment and increase job opportunities in communities affected by SuTPs. TA on competitiveness, resource efficiency and cleaner production with a focus on Organized Industrial Zones (OIZs) will be delivered. Taken together, this ASA serves as a centerpiece of WBG dialogue in Turkey, feeding into the design of reforms, underpinning any relevant reforms that may be captured in the future DPL series, and helping target potential high-growth or innovative SMEs (which in turn could be targeted through the financial sector support pursued under CPF Objective 2 above). This stronger framework is expected to lead to enhanced private sector investment which IFC and MIGA could support. In later stages of the CPF period, IBRD may build on the ASA to step up lending in support of innovation, technology absorption, cleaner production and an improved business environment, should the client demand. 49. Boosting employment growth through support to entrepreneurship and innovation is IFC’s priority under this objective. Through financial intermediaries and direct engagements with real sector companies, IFC will help strengthen Turkish firms’ competitiveness (with new technology, innovation and improved governance) and support their regional and international expansion. IFC will continue investing in equity funds that promote local entrepreneurship, competitiveness and innovation, while also fostering employment in high-growth and high-value-added sectors (e.g., manufacturing, telecommunications, technology, agribusiness). It will continue with its Global Trade Finance program mitigating risks through guarantees to banks that deliver trade financing. IFC will also provide advisory services focused on corporate governance, and skills development that enable better linkages of SMEs with high growth value chains. IFC AS will contribute to improved competitiveness, productivity, and sustainability of Turkish manufacturers through (i) a set of greener manufacturing interventions in OIZs including resource efficiency, cleaner production, industrial symbioses, and green infrastructure, (ii) building business cases (cost-benefit analysis) at firm and OIZ levels to enable better detection of bankable projects, and (iii) helping develop a comprehensive national framework on Green OIZs for Turkey. Focus Area 2: Inclusion
50. WBG support in this area aims to consolidate Turkey’s success towards achieving the twin goals while also supporting efforts to reach those who are left behind. This implies realizing the demographic dividend by creating good jobs for increasing numbers of workers, which involves better integration of women, youth and SuTPs into the labor force, reducing persistent gender inequalities (particularly in access to economic opportunities), reducing regional labor-market disparities, and raising learning levels (including at the youngest ages, when development of the cognitive and behavioral skills required in the workplace is optimal). The WBG’s program to date in this focus area had a concentration on ASA which informs government-financed programming (and DPLs) and which the government wishes to remain at the core of the
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engagement because of its role in providing knowledge for many of the reforms undertaken in this area. Broad issues of equity, vulnerability and regional disparities – that cut across the whole of the WBG program and not just this Focus Area – will continue to be the focus of in-depth ASA, possibly through a future CEM or other deep-dive diagnostic. An important evolution of the WBG program in this area has been the introduction in FY17 of new investment operations financed by the EU’s Facility for Refugees in Turkey (FRiT), which is the framework for the EU’s pledged assistance to Turkey for continuing to support hosting SuTPs; the FRiT funding has allowed the WBG to complement its ASA with more in-depth support through investment projects while strengthening cooperation between WBG and the EU.
CPF Objective 4: Increased Effectiveness of Social Assistance
Results indicators for Objective 4 Increased impact of social assistance on the poverty gap Increased availability of monetary and non-monetary indicators of welfare and inclusion.
51. This CPF objective has the goal of improving efficiency and effectiveness in social assistance and strengthening the evidence-base for policies aiming to narrow gaps between regions and ensure greater inclusion of vulnerable groups. The ASA program will continue to produce and disseminate monetary and non-monetary indicators of welfare and inclusion, including equality of opportunity and multi-dimensional poverty. The WBG will continue its support to the Poverty Reduction Strategy and Social Assistance Reform initiative of the Ministry of Family and Social Policies (MoFSP) for making the social assistance system more effective and efficient, especially towards vulnerable groups such as the disabled. The WBG’s Europe and Central Asia regional agenda on support to the Roma people will encompass Turkey through the framework of providing support to the recently-adopted policy of the Strategy for Roma in Turkey (2016-2021).
CPF Objective 5: Increased Labor Force Participation of Women & Vulnerable Groups
Results indicators for Objective 5 Increased female labor force participation Increased youth participation in the labor force Increased SuTP employability in the labor force (gender disaggregated) Direct employment supported by IFC manufacturing clients in south east regions
52. WBG support under this objective aims to bring more people – especially women and youth – into the formal labor market. This is critical for Turkey to reap the benefits of its demographic window and so to grow rich before it grows old. The importance of this challenge is recognized and reforms in the past have focused on different interventions. The Bank intends to continue its role of providing a comprehensive package of ASA that analyses the labor market’s supply and demand constraints (including jobs diagnostics, evaluations of labor policies such as minimum wage, pre-school and child-care policies, and social norm constraints) as well as assessments of individuals who are not in school, education, employment or training (NEET). The aim of these ASAs is to propose reform recommendations (e.g., on flexible work arrangements, tax incentives for pre-schools, maternity/paternity leave, and active labor market programs (ALMPs) incentivizing training and jobs for women and youth) which can guide Government
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decision-making and could in turn be supported through DPLs. As part of the support to jobseekers, the WB will continue supporting the public employment services (ISKUR) institution to strengthen its capacity as well as its effectiveness helping jobseekers. 53. This objective seeks to improve the employability of other vulnerable groups. The influx of SuTPs has created new challenges among the labor force, particularly for those in the south-east which is hosting the concentration of SuTPs. This is exacerbating an already challenging environment for the people in southeast Turkey who have lower incomes, make less use of public services, and have less access to finance (for farmers, agribusinesses, and SMEs, particularly for women-owned enterprises). The WBG will help to address these issues through policy advice (supported by EU and SIDA trust funds) and project interventions. A FRiT-funded labor market inclusion project (€50 million, FY17) targets increased SuTP participation in the labor market through providing access to ALMPs. This is complemented by FRiT funding of €5 million for IBRD advisory work to support facilitation of employment and entrepreneurship opportunities in SuTP-affected regions. Further IBRD and/or EU investments will be considered where there is client demand and a link to the twin goals. The WBG is also providing support on migration issues more broadly as part of its global knowledge role in this subject. 54. IFC aims to invest in projects that promote greater equity in the access of vulnerable and underserved groups to services, jobs, and finance. IFC will scale up its SME financing targeted to women entrepreneurs and farmers and will leverage NBFIs to broaden access to finance of these groups. It will also invest in key manufacturing companies with presence in the south-east of Turkey with a view to support employment in the lagging regions. Aiming to help underserved populations access better urban services, IFC will pursue investment opportunities in commercially-viable urban infrastructure projects in second-tier, less developed regions. In addition, it will offer advisory services to Turkish corporates to help them develop gender programs that support women’s employment and entrepreneurship.
CPF Objective 6: Strengthened performance of the education and health sectors
Results indicators for Objective 6 Increased percentage of formal school enrollment of SuTP children between the ages of 6-18 Improvement of primary and secondary prevention of non-communicable diseases Number of patients served through IFC health sector clients
55. The focus in the health sector is on promoting healthy lifestyles. Turkey has already made enormous progress in reducing mortality and increasing life expectancy; now the challenge with the greatest potential impact is promoting healthy lifestyles through attacking behavioral risks. An ongoing IBRD-financed health project aims to enhance the capacity of the Ministry of Health (MoH) for evidence-based policy making, increase hospital management capacity, and improve the prevention of selected non-communicable diseases (NCDs). The project mainly aims to raise awareness about NCD risk factors (such as smoking, obesity and physical inactivity) and to promote behavior change; among other things, Turkey will be included in a global obesity study and its experience in tobacco control will be documented. In addition, IBRD will continue to support the second phase of the health transformation program through activities focusing on providing appropriate high-quality care by results-based interventions and payment reforms. This includes documenting the successes and challenges faced, and the political economy of the
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transformation. IFC and MIGA will continue to support Turkey’s health sector through investments in specialized health service providers, and through financial innovation to help create alternative capital market solutions for health infrastructure financing. For example, IFC financed Turkey’s first PPP bond issuance under Elazig health PPP project, which was structured and supported by MIGA and EBRD through credit-enhancement products. IFC will invest in specialized services (e.g., bio-pharmaceuticals manufacturing), where it can play a role in bringing in strategic investors and building partnerships, which it can then support with financing. MIGA will remain open to support investments into Turkey’s health PPP program by providing political risk insurance guarantees for the construction and operation of new health facilities. Similarly to IFC, financial innovation in Turkey’s health sector will remain a focus area to leverage the use of MIGA’s credit enhancement products, as utilized on the recently closed Elazig bond transaction. 56. In the education sector, the CPF will step up ASA in response to the recent fall in PISA and TIMSS scores for Turkey. This ASA will support primary education and teacher training reform efforts, help inform and influence policies affecting the quality of education and the monitoring of education services. Given the time required to impact learning, results are likely to be modest and achieved beyond the CPF period. There are discussions underway with the Ministry of National Education (MONE) to support areas including life-long learning and distance education approaches where the WBG has global experience. IBRD will implement a FRiT-financed education project (€150 million) which aims to expand education service delivery and targets resources where SuTPs as well as host communities face capacity constraints. IBRD is also providing technical support to derive a strategy to integrate immigrant children into the education and vocational system. In addition, a new EU Instrument for Pre-Accession (IPA) -funded project targeting youth who are out of school is being prepared in areas where drop-out rates of Turkish youth is high and where SuTP youth are at risk of never entering school. Lastly, IFC will look for opportunities to invest in education service clients to promote private vocational training. Focus Area 3: Sustainability 57. The WBG’s program will help address the SCD-highlighted challenge of reorienting growth towards a more green, resilient and sustainable pattern. Economic growth and urbanization in Turkey are not yet decoupled from rising energy use, pollution and greenhouse-gas (GHG) emissions, so there is much potential for greater resource efficiency and pollution abatement. The challenges are to provide connectivity and agglomeration benefits in an environmentally, socially and financially sustainable way (particularly as regards reducing energy intensity and avoiding water scarcity). The program will build on the well-established IBRD and IFC collaboration in energy and urban/municipal services, where 75 percent of IBRD’s investment program and a sizeable proportion of IFC’s engagements are already concentrated: this provides an excellent opportunity for operationalizing the cascade approach to financing. The CPF proposes both to build on the on-going program and to encourage its evolution towards issues critical to Turkey’s future growth. It is consistent with the 10th DP Transformation Programs focused on increased energy efficiency and generation from local resources, urban redevelopment, improved access to potable water and wastewater services, effective use of water in agriculture, and sustainability in the use of natural capital. Within this focus area, the CPF objectives include (i) improved reliability of energy supply and generation of green energy; (ii) improved sustainability and resilience of cities; and (iii) increased sustainability of infrastructure assets and natural capital.
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CPF Objective 7: Improved reliability of energy supply and generation of green energy
Results indicators for Objective 7 Renewable electricity generation as percentage of total generation Value of loans provided by IFC clients to renewable projects Total power generation and distribution clients reached Increased capacity of gas storage Gas imports through Trans-Anatolian Pipeline (TANAP)
58. The WBG’s current program is heavily concentrated in the energy sector, with a cascade approach underway whereby IBRD policy advice and TA are paving the way for stepped-up private sector engagement supported by IFC and MIGA. The program aims to help Turkey to reduce its energy dependence (it imports 92 percent of its oil and 98 percent of its gas), support the energy reform agenda, diversify its energy generation (inter alia to include more renewables), and upgrade regional transmission and distribution networks. Harmonization with EU standards is also a key objective. ASA – supported by EU/IPA, ESMAP and CTF grants on rooftop solar programs, generation planning, gas sector restructuring, smart grid applications and distribution companies – will continue to deliver policy advice and just-in-time analysis of sector issues under government debate. IBRD, IFC, and MIGA will work closely together to help Turkey improve its PPP policy framework to stimulate further private sector energy investments, strengthen the energy regulatory environment, and increase long-term financing for renewable energy5. This ASA will also feed into the design of future DPLs, which could stimulate investments in renewable energy generation and transmission and the related climate change benefits. 59. The IBRD investment portfolio will continue to focus on improving Turkey’s energy security and mix, including by increasing the use of renewable resources (wind, solar, and geo-thermal). The CPF program encompasses: (i) increasing the percentage of renewable electricity generation and improving its integration into the grid through the ongoing Renewable Energy Integration, the Private Sector Renewable Energy and Energy Efficiency, the Geothermal Development and the EU/IPA Energy Sector TA Projects; (ii) enhancing energy security infrastructure and gas storage capacity through the on-going Gas Sector Development Project and the proposed Gas Storage Expansion Project; (iii) developing energy trading and restructuring of BOTAŞ through the EU/IPA Energy Sector TA Project; (iv) securing and diversifying Turkey’s gas supply, including gas imports from Azerbaijan through the TANAP Project – where $800 million in IBRD loans to Turkey’s BOTAŞ and Azerbaijan’s Southern Gas Corridor (SGC) leveraged $600 million from the Asian Infrastructure Investment Bank (AIIB) and the expectation of up to $1.2 billion in guarantees from MIGA; (iv) development of interconnections to ensure cross-border electricity and natural gas trading; and (vi) other areas to support sustainable energy sector development as agreed between the Government and the WBG, including increasing the grid capacity and smart grid technologies, distribution and transmission networks and systems. Given the comparative advantage of IBRD in the sector, further energy investments may follow, on client demand, observing the WBG’s cascade approach on leveraging private financing.
5 Support for the regulatory environment for renewable energy, for example, is being provided under the ongoing EU-IPA Energy Sector TA and the Rooftop Solar PV Assessment. Further work to improve the investment climate for the energy sector will be coordinated with the PPP RAS.
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60. IFC aims to support Turkey’s energy security, and help rebalance its energy mix through selective and strategic engagements in the sector. IFC will focus on investments with high development impact that cannot be achieved through alternative investments as well as projects where IFC can play a mobilization role, particularly in the form of FDIs. Now that the electricity distribution network is fully privatized, IFC will focus on providing post-privatization financial support to strengthen the financial structure of distribution companies and to attract long-term financing to upgrade the distribution network, which has been under-invested during public ownership. IFC aims to help distribution companies address currency mismatches by offering suitable financing schemes to hedge their foreign exchange risks. IFC will seek investment opportunities in new technologies (e.g. smart meters) to help address some of the problems in the power distribution sector. In addition, IFC will look for opportunities to address shortages in gas supply through investments in gas infrastructure including import terminals and storage as well as gas distribution. MIGA remains open to supporting FDI in the renewable space through the provision of political risk insurance guarantees.
CPF Objective 8: Improved sustainability and resilience of cities
Results indicators for Objective 8 Improved service delivery and expanded access to digital land registry and cadastre information Number of additional people benefiting from improved urban infrastructure and municipal services Increased resilience of cities through increased number of disaster resilient public buildings and improved disaster preparedness.
61. Given the important role that urbanization has played in Turkey’s development success, the WBG program will continue to focus on helping cities to become more sustainable and resilient. High population growth in some Turkish cities has resulted in congestion and environmental degradation that can impact connectivity and agglomeration benefits. Turkey is responding to this challenge through a “Smart Cities” approach that focuses on cities’ needs to plan, build and provide services in more environmentally and socially sustainable ways. The WBG is providing support through the Sustainable Cities program that is putting in place a cascade approach through an investment coordination platform between IBRD and IFC. Under the Sustainable Cities program, the WBG aims to maximize financing through sustaining constructive dialogue with the central government on policy and regulatory changes that would help modernize the existing municipal financing and investment framework. This will involve supporting cities to become more credit worthy to access concessional finance and focus public funding where it is most needed. Policy advice, technical assistance and capacity building to cities and municipalities on issues of urban transformation (including housing) could pave the way for stepped-up private investment supported by IFC and MIGA. In particular, IBRD’s cooperation with Illerbank to support to municipalities in improving urban planning, infrastructure and capital investment planning, and efforts to strengthen municipal financial capacity (including creditworthiness) should enable the WBG to expand its support to second-tier cities, including in frontier and underserved regions, with the ultimate cascade goal of enabling them to secure financing directly from the capital markets for their crucial infrastructure needs. Expanding the availability of municipal finance options (including the bond market and FX hedging) and an effective municipal PPP framework are areas that require continuing WBG collaboration. Finally, support on low-carbon urban management, and related investment identification in major urban centers will be pursued, aiming to share global best practice.
23
62. IBRD’s lending portfolio will continue to target strategic investments that build on known areas of comparative advantage. The Sustainable Cities program, approved in late 2016, is envisaged as a series of projects, with new projects coming into the program based on the readiness of specific cities and their investment plans, and it will include EU-funded TA in planning and policy analysis to help cities address environmental, social and financial sustainability challenges. The design of the new projects will benefit from ASA recently carried out or underway: these include (i) a recent ASA on sustainable water supply and sanitation service delivery in urban areas, which analyzed and quantified additional efforts needed to reach compliance with EU standards, as well as opportunities for operations performance improvement for climate-smart approaches (water loss reduction, optimized wastewater sludge management and treated wastewater reuse); (ii) a study on housing the bottom 40 percent; (iii) improving municipal services such as urban transport through the EU Transport IPA and Sustainable Cities IPA; and (iv) Global Facility for Disaster Reduction and Recovery’s (GFDRR) -financed TA on disaster risk management and resilience of cities. An ongoing Land Registry and Cadastre Modernization project also contributes to improving local government financing through improving land valuation and enhancing service delivery to citizens through increased access to property market information. For improving the resilience of cities, the program proposes an investment project to strengthen critical public facilities for earthquake resistance and better enforcement of building codes and land use plans. 63. Focus areas for IFC and MIGA include direct engagement with municipalities to strengthen capacity for financial management, and for infrastructure project design, preparation and implementation. IFC’s Cities’ Platform includes long-term and municipal finance, tailored to creditworthiness, to support urban transportation, street lighting, waste-to-power, solid waste, waste water, and water management projects. IFC can leverage a wide range of products including long-term loans (both in euros and lira), municipal bonds, and hedging tools to help municipalities manage their foreign-exchange loans. Developing a municipal bond market, introducing foreign-exchange hedging instruments to municipalities, and improving the municipal PPP framework are areas that require continuing WBG collaboration to open up new opportunities at the municipal level. Building on successes in Istanbul and Izmir, IFC aims to help other fast-growing credit-worthy cities create a pipeline of bankable projects, providing direct senior loans (in euros or lira) or using a portfolio approach by channeling its funds to cities through local banks.
CPF Objective 9: Increased Sustainability of Infrastructure Assets and Natural Capital
Results indicators for Objective 9 Cumulative energy savings achieved through WBG-financed energy sector projects Annual greenhouse gas (GHG) emissions reductions
64. Increasing efficiency in the use of public assets and natural capital is highlighted in the SCD as a key development challenge, with positive impacts on climate change. The SCD found that improving the efficiency of energy consumption is critical for Turkey’s competitiveness and sustainable economic growth (while also supporting the energy security agenda under CPF Objective 7). The WBG’s program in energy efficiency is well developed, with ongoing IBRD investments through the SME Energy Efficiency project and the Private Sector Renewable Energy and Energy Efficiency project as well as a broad program of IFC financing for sustainable and
24
renewable energy. These projects will continue to be implemented with follow-on or scaled-up projects based on client demand. In addition, IBRD is supporting the development of carbon pricing instruments and markets through a grant-funded Partnership for Market Readiness (PMR) project. IBRD is seeking to develop sustainable financing mechanisms and implementation models to support energy efficiency in public buildings and may consider additional projects to develop new markets in the areas of energy efficiency financing. The ASA program includes a Forestry Note and a Socio-Economic Survey of Forest Communities (both recently completed) and future stepped-up engagement in this area could be envisaged. In collaboration with the Ministry of Development, a study is underway on how to finance Sustainable Development Goal (SDG) #12 which focuses on sustainable production and consumption. Finally, IBRD’s new social and environmental framework will serve as a solid ground for furthering dialogue and building in-country capacity on social and environmental social sustainability policies and analytical work. 65. IFC will continue to support private sector investments in manufacturing, SMEs, municipal and transport infrastructure, with a view to improving energy efficiency and reducing GHG emissions. IFC will provide long-term finance to intermediaries with portfolios focused on energy efficiency areas. It will seek direct engagements at the industrial level to help reduce energy intensity and pollution with a set of products such as loans, equity and green bonds, as well as to mobilize funds from other financial partners for these purposes. IFC will work with financial institutions to expand finance for green buildings through innovative instruments such as green bonds and mortgage-covered bonds. At the municipal level, it will seek opportunities to support energy-efficient public transport, municipal buildings, waste management and waste-to-power, and street lighting projects. In addition to financing, IFC will provide advisory support and training to key institutions and corporates to help introduce new energy efficiency practices to Turkey’s residential housing and industrial sectors. 66. MIGA remains open to expanding its support to municipal infrastructure with a view to improving energy efficiency and reducing overall emission levels. In this regard, MIGA could provide credit guarantees for major municipal infrastructure projects, similar to previous assistance to Istanbul and Izmir. 67. The WBG will also advocate a stepped-up program in areas identified in the SCD as important, such as the sustainable use of water and forest resources. This would support some of the most vulnerable groups in Turkey, namely, smallholder farmers and forest communities. In the water sector, a possible IBRD irrigation project is under discussion which could include components on modernizing the sector, increasing water productivity in agriculture, strengthening the capacity of water users associations, and exploring the options of private sector participation in irrigation. In the forestry sector, recommendations from the recent Forest Policy Note have led to discussions of a potential project that would focus on accelerating forest-sector SME growth to improve the forest value chain, with the goal of spurring regional convergence, reducing out-migration, and producing a sustainable supply of quality forest products for the construction and energy markets. Engagement in agriculture is also possible: e.g., analytic work on productivity and competitiveness (proposed under CPF Objective 3) could look at improving the efficiency of agri-food value chains and commercialization. Finally, the WBG is providing EU-funded TA on transport issues, such as a multimodal transport strategy, urban transport, and priority railway investments, and some of this work could lead to financing opportunities during the CPF period.
25
III.4 Implementing the FY18-21 Country Partnership Framework 68. The CPF will feature a mix of instruments, drawing on the strengths of IBRD, IFC and MIGA. IBRD financing for FY17-21 is estimated at $5-7.5 billion, although actual lending volumes will depend on client demand, choice of instrument, overall performance during the CPF, IBRD’s financial capacity, and demand from other IBRD borrowing countries. IFC’s own-account investment program is expected to be $600-800 million p.a., reflecting IFC’s current level of exposure (2nd largest exposure globally), the elevated economic and political risks in Turkey, and increased global risk aversion. IFC’s program can be further increased depending on Turkey’s progress with structural reforms as well as improvements in the economic fundamentals and political risks during CPF implementation. IFC will continue to provide a wide range of innovative and high-impact products and financial instruments with a focus on high-growth and high value-added investments, and areas such as PPP project bonds and municipal PPP projects. 69. The IBRD lending program proposes one DPL series, consolidates financing in on-going and agreed areas, and adopts a flexible approach for the choice of other investment operations (Table 2). The program will encompass one multi-sectoral DPL series, with the specific support to CPF objectives to be agreed during its design. The Government continues to signal the importance of the DPL in its program with the WBG, both for its support to a multi-dimensional reform plan and for the signal it gives to partners and international markets. As detailed in the CLR, Turkey has had good success with using DPLs as a binding instrument that can bring together different aspects of the program, that allows for a deeper engagement and follow-through on ASA recommendations, and that can remain flexible to respond to a changing country context. The proposed lending for FY18 provides support in existing and agreed areas, consolidating gains made in the previous CPS period. For the other years of this CPF (FY19-21), the program is flexible to allow for the partnership to evolve in areas where dialogue has been on-going but where the type of engagement still needs to be agreed. This flexibility means the program can adapt to the evolving country context, as well as align with the objectives of the future 11th Development Plan (for the post-2018 period) and with implementation on the ground.
Table 2: FY17-21 Indicative Financing (by source)
GROWTH INCLUSION SUSTAINABILITY
DPL (IBRD, FY18)
Long Term Finance (IBRD, FY17)
Education (EU FRiT, FY17) Geothermal Development (IBRD and CTF, FY17)
Financial Sector (IBRD, FY19)
Labor Market Integration (EU FRiT, FY17) Trans-Anatolian Pipeline (IBRD, FY17)
Innovation (IBRD, FY20) SuTPs Employment Support and Entrepreneurship (EU FRIT, FY18)
Sustainable Cities Series of Projects (IBRD and IPA, FY17; FY18 and FY20)
Education: Youth-at-Risk (EU/ IPA, FY18) Gas Storage Expansion (IBRD, FY18)
Social Inclusion (IBRD, FY19) Disaster Risk Mgmt. (IBRD, FY19)
Education Reform (IBRD, FY20) Irrigation (IBRD, FY19)
Energy Efficiency (IBRD, FY19)
26
70. The ASA program will strategically respond to clear client demand and ownership in areas that underpin Turkey’s Development Plans and WBG financing engagements (Table 3). The overall aim is to deliver knowledge, informed by the WBG’s international experience and expertise, in areas where there is demand from decision-makers, active consideration of policy or institutional reform options, and sufficient engagement with government counterparts to guide the work and ensure ownership of its results. Where strategically relevant and needed, ASA will inform the DP, while also contributing knowledge pertinent to well-designed and -targeted IBRD lending, including particularly DPLs. Given that many of the development challenges facing Turkey are cross-cutting (such as equity, gender equality, inclusion, productivity, greening the growth model, etc.), diagnostics will typically be applicable to several CPF Focus Areas. Further work will be undertaken to develop the RAS program where applicable and where there is client demand. Finally, the WBG will pursue important global issues that are pertinent to Turkey, such as refugee-related issues, non-communicable diseases, and financing for climate projects.
Table 3: ASA for World Bank GROWTH INCLUSION SUSTAINABILITY
Country Economic Memorandum 2017 – Productivity and Competitiveness
Country Economic Memorandum 2018 – Equity
Poverty Analysis (including Regional Disparities)
Financial Sector Programmatic ASA including WBG-IMF Financial Sector Assessment (FSAP), pensions, capital markets
Education: (1) analysis of PISA and TIMS results; (2) teacher training and primary education reform support; (3) migration management
Energy Programmatic ASA, including EU-financed IPA
Governance Programmatic TA Poverty and equity lens on labor, education and nutrition
Sustainable Cities TA
Business Environment and Innovation ASA and TA
Labor markets and skills: (1) quality of jobs, minimum wage and informality TA; (2) study on Not in Education Employment or Training (NEET); (3) Socio-Emotional Skills
Support to SDG Implementation
Justice Sector TA Syrian Refugee Crisis Response: harmonization strategy, knowledge generation, impact studies
Disaster Risk Management TA
Tax Policy Advice Poverty Reduction Strategy and Social Assistance Reform TA
Forest Sector Review
Distributional Impacts of Fiscal Policy
Health; (1) expenditure projection actuarial model TA; (2) health reform and assessment of the utilization of primary care; (3) obesity study
Sustainable, Efficient and Safe Transport
Disability and Aging Study Rooftop Solar PV Assessment
PPP Advisory and PPP RAS
Housing Study
27
71. Citizen Engagement (CE): The CPF proposes to step up and mainstream CE activities into the program, particularly across the WBG’s investment lending portfolio. To date, several IBRD-supported operations in Turkey have relied on CE mechanisms such as consultations and grievance redress for safeguards compliance, and an increasing number have utilized beneficiary feedback surveys. For instance, as part of its objective to improve customer services in land registry and cadastre offices, the Turkey Land Registration and Cadastre Modernization Project has used beneficiary feedback surveys to monitor increases in customer satisfaction with cadastre services as well as the decline in the number of cadastre disputes pending in courts. In the upcoming CPF, CE mechanisms will be strengthened in all IPFs to achieve the 100 percent beneficiary feedback target. Technical assistance and capacity building will be provided to project teams in all sectors to identify entry points and relevant CE mechanisms. 72. The World Bank’s approach towards mainstreaming CE is aligned with the priorities of the DP and Turkey’s steps towards achieving Sustainable Development Goal 166. The DP has prioritized strengthening the non-government sector by creating a convenient atmosphere for a strong, diverse, pluralist, sustainable civil society and opportunities for all segments of society to engage in social and economic development processes. The ASA portfolio will increase its focus on strengthening CE through documenting and disseminating Turkey’s good practices on CE and participatory public administration reforms. Engagement on CE will be deepened through the ongoing dialogue on open and accountable institutions to improve quality of service delivery and through further dialogue with selected ministries/departments, such as health, land administration, local government, and migration management, through greater focus on: (i) strengthening grievance redress systems; (ii) removing barriers to public participation, especially of women, on social and environmental issues; and (iii) engaging community institutions in disaster risk reduction and management. A Citizen Engagement Roadmap is detailed in Annex 8.
Donor Coordination and Resource Mobilization The WBG program in Turkey is strongly positioned to continue to deepen cooperation with development partners and to utilize multiple channels to meet the WBG’s strategic goal of greater resource mobilization and leveraging of more financing for countries. Turkey already benefits from the strong example shown of the “cascade” approach in the energy sector of mobilizing private sector financing. In the same sector, IBRD led an exemplary IFI effort in support of securing and diversifying Turkey’s gas supply with gas imports from Azerbaijan through the Trans-Anatolian Pipeline (TANAP) Project, where $800 million in IBRD loans to Turkey and Azerbaijan leveraged $600 million from the Asian Infrastructure Investment Bank (AIIB), and the expectation of up to $1.2 billion in loan guarantees from MIGA. This effort helped raise part of the $2 billion in private sector financing for the project. The WBG’s due diligence and cooperation with other IFIs is aimed at leveraging further financing for this project from EBRD and EIB. These examples provide good practice for continuing donor coordination, leveraging of partners and broadening the cascade approach in other projects and sectors.
While the Turkey EU Accession process is progressing slowly, the EU “anchor” on the economic agenda continues to be important and the EU remains a strong partner on socio-economic issues. This means that ensuring a good partnership between the WBG and the EU is an important aspect of the CPF. The EU’s Facility for Refugees in Turkey (FRiT) is a framework agreement between the EU and Turkey for the support that the EU has committed to Turkey to continue to host SuTPs and to deter their illegal crossing into the EU. As part of the FRiT, the WBG is administering three different operations in the areas of education, labor markets and entrepreneurship.
6 SDG16 - Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
28
IV. MANAGING RISKS TO THE CPF PROGRAM
73. The overall risk to achieving the CPF objectives is moderate. This reflects the current complicated political and governance context, both domestically and regionally, as well as increased risks from macroeconomic vulnerabilities, including in the financial sector. Given the dynamic nature of the situation in Turkey, the risk assessment will be reviewed as part of the PLR. As an overall risk-mitigating measure, the CPF puts strong emphasis on a flexible program that can be adapted to respond to the country context and that regularly assesses implementation progress. Risks to the CPF have been assessed using the Standardized Operations Risk-rating Tool (SORT), as summarized in the table below. Risk categories Rating
1. Political and governance Substantial 2. Macroeconomic Substantial 3. Sector strategies and policies Low 4. Technical design of project or program Moderate 5. Institutional capacity for implementation and sustainability Moderate 6. Fiduciary Low 7. Environment and social Moderate 8. Stakeholders Moderate
Overall Moderate 74. Turkey is facing a unique set of political and governance risks. Events within Turkey since the failed coup attempt of July 2016 have affected the domestic landscape and the planned constitutional amendments will change the system of government by introducing a presidential system. Government efforts to amend the constitution (through parliament and a referendum), and manage geopolitical tensions and their implications for the country, particularly in the east and south-east of Turkey, are absorbing much of the time and attention of senior government officials, with the risk that needed reforms may lag. Risk Mitigation: The WBG, together with other development and private sector partners, will continue to monitor these risks closely and modify support within the CPF to help address economic issues that arise out of this context, where its mandate and expertise warrant it. This is where the flexible nature of the CPF will come into play because the program can be adapted to respond accordingly, specifically through modifying how and where the WBG will deliver its financing. The proposed DPL series can be calibrated to the circumstances, both in volume and in policy content, with a view to securing a prudent macroeconomic environment and context-appropriate social and structural reforms. If the environment is considered not conducive for DPL support, the program can be more narrowly targeted to consolidating or expanding gains in mature areas of engagement (energy, financial sector, cities), as well as analyzing or administering investments that help vulnerable populations to reach the twin goals (as is being done with Syrians under temporary protection, with EU funding). 75. The difficult geo-political environment of the sub-region also poses challenges. Regional risks have become more complex, with difficulties in the euro zone as well as challenging debates about Turkey’s EU accession, continued conflict in Syria and spill-over terrorism risks, and dynamic Turkish relations with both Russia and the United States. These challenges may risk
29
negatively impacting political, economic and social issues. Adverse developments may also discourage private investment further. Risk Mitigation: Should these risks materialize, the WBG would moderate support in an appropriate manner. This could mean delaying the planned DPL, changing its content, and adjusting its volume, while also targeting project financing on investments that are responsive to the risks at hand. Capital outflows, whether resulting from adverse domestic conditions or attractive external ones that entice investment away from Turkey, could prompt greater government interest in WBG and IFI financing to compensate for poorer terms on international markets, and also possibly enable a productive dialogue in newly important topics. In all cases, enhanced WBG support for reforms aiming to improve the business environment and enhance resilience and inclusion will remain important, and a backbone of WBG work in Turkey. 76. Domestic and international challenges still pose risks to the macroeconomic outlook. In 2016, Turkey experienced stalling growth low FDI inflows (which were already low for a country of Turkey’s importance and potential), continued high current account deficits, and down-grades of its international credit ratings. Rising oil prices and U.S. interest rates, and depressed tourism revenues are likely to maintain pressure on the trade and current accounts. However, higher growth in the EU (Turkey’s main trading partner) and the depreciation of the lira will likely support trade and current accounts. Sub-regional crises (in Syria and Iraq) are making Turkey less attractive to investors, and the costs associated with hosting some three million SuTPs are adding to fiscal stress. Despite some monetary tightening, inflation remains above target. Fiscal policy, until recently a cornerstone of Turkey’s economic success is on an expansionary path with a recently introduced fiscal stimulus package and a rising contingent liability portfolio. Risk Mitigation: The WBG – together with the IMF – will monitor developments closely. In addition, the WBG will step-up its TA and advisory program to bolster macroeconomic resilience and help the government to respond to emerging vulnerabilities. In the short- to medium-term, Turkey’s main challenge is to avoid a recession, which could trigger deleveraging, and to make good use of external financing conditions to rebuild buffers, reduce inflation and address external balances. The DPL series will be carefully deployed here if necessary and appropriate. 77. There are increasing concerns about the vulnerability of the financial sector and its potential spillover effects on the economy as a whole. Turkey’s financial sector is experiencing headwinds with increasing stability pressures due to the slowdown in the economy, exchange rate volatility and the dynamic political context. The sector is particularly vulnerable due to structural and cyclical factors. Structural factors include the high proportion of savings and debt held in foreign currency and at short maturities, the dependence on cross-border financing, and the convergence in major banks’ business models. Cyclical factors include growing corporate leverage, rising corporate-bank and (contingent) corporate-sovereign exposures, and deterioration in banks’ asset quality. The IMF-WB Financial Sector Assessment (FSA) shows that capital buffers in the banking sector are resilient to a short-term shock but increasingly under pressure in a longer recession, which might force some major banks to seek additional capital. This could be further exacerbated by potential growing global liquidity constraints. Risk Mitigation: The WBG can mitigate financial sector risks through implementation of the FSA’s recommendations through dialogue, technical assistance and possible DPL support, as well as through close coordination with the IMF (through its Article IV reviews). Ongoing operations in the financial sector can be restructured where relevant and feasible to address emerging issues
30
and new credit lines can be extended. Given expected increased pressure on the lira on the back of Turkey’s high external exposure, IFC will promote currency swaps for real sector clients, PPP investments, and municipalities with large open foreign-exchange positions. In addition, IFC will closely coordinate with MIGA to respond to commercial lenders’ increasing demand for risk guarantees. IFC will also stand ready to support banks to strengthen their regulatory capital. 78. Institutional capacity for project implementation and sustainability may be affected, due to coordination issues, institutional restructuring and weak ownership of projects by implementing agencies. This risk is assessed overall as moderate; however, these factors could exacerbate the intergovernmental coordination challenges, have an impact on policy direction, and create difficulties in reaching consensus on investment and other activities that have occasionally marred project implementation in the past. Risk Mitigation: The WBG would mitigate this risk through more intense capacity-building through its projects and ASA targeted at stronger coordination and monitoring. Clearer signs of up-front client commitment will be sought before the WBG expands its program in certain areas. A positive factor in this context is the government’s continued desire to implement its development plan, as evidenced in its current effort to tackle sensitive issues such as improving social programs, adjusting the pension regime, and increasing opportunities for vulnerable groups. The institutions with which the WBG works have traditionally been strong. However, institutional risks have recently resulted in hesitant decision-making. At the same time, the WBG needs to continue to show how WBG guidelines and policies in fiduciary and safeguards areas add value and result in improved development outcomes. The CPF could allow the program to be adapted to focus on areas of strength in the on-going portfolio and deliver additional financing and follow-on projects.
31
Ann
ex 1
. C
PF R
esul
ts M
atri
x FO
CU
S A
REA
1: G
RO
WTH
Pr
uden
t m
acro
econ
omic
and
fis
cal
man
agem
ent
has
been
a c
orne
rsto
ne o
f Tu
rkey
’s g
ood
perf
orm
ance
, bu
t re
silie
nce
to e
xter
nal
shoc
ks h
as
wea
kene
d, v
ulne
rabi
litie
s ha
ve in
crea
sed,
and
inve
stor
and
con
sum
er c
onfid
ence
are
dam
pene
d w
hich
col
lect
ivel
y ar
e im
pact
ing
grow
th p
rosp
ects
. Tu
rkey
’s b
ank-
cent
ric f
inan
cial
sec
tor
is a
lso
unde
r st
ress
, con
stra
inin
g cr
edit
to h
ouse
hold
s an
d fir
ms.
To r
etur
n to
a h
ighe
r gr
owth
pat
h an
d co
nver
genc
e to
hig
h-in
com
e ec
onom
ies,
the
Gov
ernm
ent
need
s to
con
tinue
to
stre
ngth
en f
isca
l m
anag
emen
t, de
epen
ins
titut
iona
l re
form
s to
str
engt
hen
the
rule
of l
aw a
nd a
rms’
-leng
th m
arke
t reg
ulat
ion,
and
cre
ate
the
envi
ronm
ent f
or a
mor
e ef
fect
ive
priv
ate
sect
or.
Tack
ling
Turk
ey’s
re
lianc
e on
sho
rt-te
rm e
xter
nal f
inan
ce re
quire
s, in
ter a
lia, b
road
enin
g ac
cess
to fi
nanc
e an
d im
prov
ing
finan
cial
incl
usio
n th
roug
h de
epen
ing
and
dive
rsify
ing
finan
cial
mar
kets
. Tur
kish
firm
s nee
d to
incr
ease
pro
duct
ivity
by
boos
ting
inno
vatio
n an
d te
chno
logy
to a
dd m
ore
valu
e an
d cr
eate
mor
e an
d be
tter j
obs.
Thes
e ch
alle
nges
form
the
basi
s for
the
choi
ce o
f CPF
obj
ectiv
es u
nder
this
firs
t Foc
us A
rea.
CPF
Obj
ectiv
e 1:
Incr
ease
d Fi
scal
Spa
ce
Inte
rven
tion
Logi
c: T
he W
BG’s
pro
gram
aim
s to
hel
p th
e go
vern
men
t thr
ough
rob
ust a
naly
tics,
polic
y ad
vice
and
DPL
fin
anci
ng f
or r
efor
ms
unde
rtake
n. T
he fo
cus
will
be
on p
rese
rvin
g fis
cal s
pace
thro
ugh
prov
idin
g kn
owle
dge
serv
ices
on
fisca
l man
agem
ent,
incl
udin
g in
com
e ta
x la
w,
risk
man
agem
ent
guid
elin
es,
and
an i
nter
nal
audi
t st
rate
gy,
as w
ell
as a
naly
sis
of t
he d
istri
butio
nal
impa
cts
of f
isca
l po
licy.
The
pol
icy
reco
mm
enda
tions
from
this
kno
wle
dge
wor
k w
ould
und
erpi
n a
prop
osed
DPL
serie
s, w
hich
will
be
a co
re p
art o
f the
IBRD
pro
gram
and
will
hav
e a
cros
scut
ting
focu
s in
sup
port
of k
ey e
cono
mic
refo
rm p
riorit
ies.
The
flexi
ble
appr
oach
of t
he C
PF w
ill b
e m
anife
st in
the
desi
gn o
f the
DPL
ser
ies
who
se si
ze a
nd fr
eque
ncy
will
dep
end
on th
e co
untry
situ
atio
n, th
e str
engt
h of
the
refo
rm p
rogr
am a
nd fi
nanc
ing
need
s. F
urth
er d
etai
ls o
n th
e sc
ope
of th
e re
form
pro
gram
sup
porte
d by
the
DPL
ser
ies
will
onl
y be
com
e kn
own
durin
g its
pre
para
tion
and
will
thus
be
prov
ided
in t
he f
utur
e CP
F Pr
ogra
m a
nd L
earn
ing
Rev
iew
(PLR
). C
PF O
bjec
tive
Indi
cato
rs
Supp
lem
enta
ry P
rogr
ess I
ndic
ator
s W
BG
Pro
gram
Sh
are
of d
irec
t tax
reve
nues
in to
tal t
ax
reve
nues
. B
asel
ine:
29.
2% in
201
5 T
arge
t: 40
% in
202
1 (N
ote:
the
base
line
repr
esen
ts th
e sh
are
of ta
x on
inco
me
and
prof
it in
tota
l tax
reve
nues
.)
Impr
oved
inco
me
tax
legi
slat
ive
fram
ewor
k th
roug
h en
actin
g a
new
law
, whi
ch c
ombi
nes c
orpo
rate
in
com
e ta
x an
d pe
rson
al in
com
e ta
x le
gisl
atio
ns a
nd
broa
dens
the
tax
base
.
Bas
elin
e: N
o (2
016)
T
arge
t: Y
es (2
017)
New
lend
ing:
D
PL se
ries
ASA
: Ta
x po
licy
advi
ce
Prog
ram
mat
ic g
over
nanc
e TA
Esta
blis
hmen
t of a
mon
itori
ng sy
stem
for
inte
rnal
con
trol
s in
publ
ic a
dmin
istra
tion
Bas
elin
e: N
o m
onito
ring
softw
are
popu
late
d w
ith in
form
atio
n (2
016)
T
arge
t: 70
% o
f cen
tral g
over
nmen
t in
stitu
tions
dat
a in
clud
ed in
the
mon
itorin
g so
ftwar
e (2
018)
Publ
icat
ion
of a
new
risk
man
agem
ent g
uide
line
for
publ
ic a
dmin
istra
tion
Bas
elin
e: N
o (2
016)
T
arge
t: Y
es (2
019)
Pu
blic
atio
n of
a n
ew in
tern
al a
udit
stra
tegy
pap
er
2017
-201
9 B
asel
ine:
No
(201
6)
Tar
get:
Yes
(201
7)
New
lend
ing:
D
PL se
ries
ASA
: Ta
x po
licy
advi
ce
Prog
ram
mat
ic g
over
nanc
e TA
EC
A P
FM T
F In
tern
al a
udit
SAFE
TF
32
CPF
Obj
ectiv
e 2:
Enh
ance
d A
cces
s to
Fina
nce
to U
nder
serv
ed S
egm
ents
Inte
rven
tion
Logi
c: S
treng
then
ing
the
finan
cial
sec
tor i
s cr
itica
l to
achi
eve
fast
er, p
rivat
e se
ctor
-led
grow
th w
hich
requ
ires
addr
essi
ng s
truct
ural
ch
alle
nges
, mov
ing
away
from
a b
ank-
cent
ric fi
nanc
ial s
yste
m, d
eepe
ning
and
div
ersi
fyin
g fin
anci
al a
nd c
apita
l mar
kets
and
bro
aden
ing
acce
ss to
fin
ance
to c
aptu
re u
nder
-ser
ved
segm
ents
(MSM
Es a
nd w
omen
). Th
e fo
cus
of th
e C
PF w
ill b
e on
del
iver
ing
rele
vant
ASA
that
will
hel
p in
form
go
vern
men
t po
licy
and
unde
rpin
fut
ure
inve
stm
ents
by
IBRD
and
IFC
. Th
e A
SA p
rogr
am w
ill c
over
crit
ical
iss
ues
such
as
finan
cial
sec
tor
dive
rsifi
catio
n, p
ensi
ons,
capi
tal m
arke
t and
ana
lysi
s of
sec
tor h
eadw
inds
and
how
to re
spon
d to
them
. IB
RD w
ill c
ontin
ue to
wor
k w
ith th
e sta
te
bank
s, de
velo
pmen
t ban
ks a
nd o
ther
fina
ncia
l ins
titut
ions
thro
ugh
new
lend
ing
oper
atio
ns th
at p
rovi
de lo
ng-te
rm fi
nanc
ial s
ourc
es th
at ex
tend
acc
ess
to f
inan
ce, i
ncen
tiviz
e in
vest
ors
in k
ey s
ecto
rs, a
nd d
eepe
n an
d di
vers
ify in
strum
ents
. IFC
will
con
tinue
to w
ork
with
fin
anci
al in
stitu
tions
and
in
term
edia
ries t
o ex
pand
the a
vaila
bilit
y of
fund
ing
to M
SMEs
, with
a p
artic
ular
focu
s on
rura
l are
as, w
omen
-ow
ned
ente
rpris
es, a
nd a
grib
usin
esse
s. It
will
con
tinue
to
(i) s
uppo
rt ba
nks
and
non-
bank
fin
anci
al i
nstit
utio
ns (
NBF
Is)
with
lon
ger-
term
fun
ds t
o he
lp t
hem
sca
le-u
p su
ppor
t to
the
un
ders
erve
d an
d un
bank
ed, (
ii) le
vera
ge d
iver
se in
strum
ents
and
mea
ns o
f fun
ding
; (iii
) util
ize
inte
rest
rate
and
cur
renc
y sw
aps f
or re
al se
ctor
clie
nts,
PP
P in
vest
men
ts a
nd m
unic
ipal
ities
; and
(iv)
pro
mot
e al
tern
ativ
e de
bt in
stru
men
ts s
uch
as c
over
ed b
onds
, div
ersi
fied
paym
ent r
ight
s (D
PRs)
, gre
en
bond
s, m
unic
ipal
bon
ds, P
PP p
roje
ct b
onds
(bo
th in
Lira
and
har
d cu
rren
cy).
IFC
will
clo
sely
coo
rdin
ate
with
MIG
A to
res
pond
to c
omm
erci
al
lend
ers’
incr
easi
ng d
eman
d fo
r ris
k gu
aran
tees
to e
nhan
ce m
unic
ipal
ities
’ cre
ditw
orth
ines
s and
to s
uppo
rt le
ndin
g ac
tiviti
es to
MSM
Es a
nd e
xpor
t-or
ient
ed c
ompa
nies
. C
PF O
bjec
tive
Indi
cato
rs
Supp
lem
enta
ry P
rogr
ess I
ndic
ator
s W
BG
Pro
gram
Pe
ople
, MSM
Es a
nd e
xpor
ters
reac
hed
with
IF
C fi
nanc
ial s
ervi
ces
B
asel
ine:
2.2
mill
ion
peop
le (2
015)
T
arge
t: 4
.1 m
illio
n (2
019)
O
f whi
ch w
omen
own
ed S
MEs
reac
hed
(num
ber)
Bas
elin
e: 2
7,00
0 (2
015)
Tar
get:
28,
500
(201
9)
MSM
Es a
nd e
xpor
ters
reac
hed
with
IBRD
fin
anci
al se
rvic
es
IBR
D B
asel
ine:
116
,000
(201
6)
IBR
D T
arge
t: 23
2,00
0 (2
020)
In
crea
se in
num
ber o
f pri
vate
pen
sion
m
embe
rs
Bas
elin
e: 2
016:
6.6
mill
ion
T
arge
t: 2
020:
7.5
mill
ion
(G
ende
r dis
aggr
egat
ion
data
is b
eing
col
lect
ed
and
will
be
prov
ided
at t
he P
LR)
Enha
ncin
g ex
tend
ed lo
an m
atur
ities
to fi
rms
bene
fitin
g fr
om IB
RD
fina
ncia
l sec
tor c
redi
t lin
es
Bas
elin
e: N
/A (i
ndic
ator
link
ed to
WB
finan
cial
se
ctor
cre
dit l
ines
star
ting
impl
emen
tatio
n)
Tar
get:
>1
Vol
ume
of o
utst
andi
ng M
SME
loan
por
tfolio
of
IFC
clie
nts
IF
C B
asel
ine:
$30
.5 b
illio
n (2
015)
IF
C T
arge
t: $
60 b
illio
n (2
019)
O
f whi
ch w
omen
own
ed M
SMEs
B
asel
ine:
$13
0 m
illio
n (2
015)
T
arge
t:
$220
mill
ion
(201
9)
Vol
ume
of o
utst
andi
ng M
SME
loan
por
tfolio
and
ex
port
loan
por
tfolio
of I
BRD
Clie
nts
IBR
D B
asel
ine:
$14
.5 b
illio
n (J
anua
ry 2
016)
IB
RD
Tar
get:
$29
bill
ion
(202
0)
Incr
ease
in o
utst
andi
ng c
orpo
rate
deb
t sec
uriti
es
portf
olio
(US$
bill
ion)
Ong
oing
lend
ing:
In
nova
tive
Acc
ess t
o Fi
nanc
e
SME
III
Long
Ter
m E
xpor
t Fin
ance
N
ew le
ndin
g:
DPL
serie
s N
ew F
inan
cial
Sec
tor p
roje
ct
ASA
: Fi
nanc
ial s
ecto
r dee
peni
ng T
A: F
ocus
on
suku
k an
d al
tern
ativ
e ca
pita
l mar
kets
inst
rum
ents
to fi
nanc
e lo
ng
term
infra
stru
ctur
e
TA o
n FS
A fo
llow
-up:
Foc
us o
n fin
anci
al se
ctor
su
perv
isio
n, m
onito
ring,
sys
tem
ic ri
sk a
nd c
risis
m
anag
emen
t to
supp
ort r
esili
ence
IF
C le
ndin
g:
Cap
ital m
arke
t dev
elop
men
t - in
vest
men
ts in
mun
icip
al,
euro
bond
and
loca
l cur
renc
y bo
nd m
arke
ts.
33
Bas
elin
e: 2
016:
US$
58 b
illio
n T
arge
t: 20
20: U
S$70
bill
ion
Incr
ease
in n
umbe
r of f
irms q
uote
d in
the
stoc
k ex
chan
ge
Bas
elin
e: 2
016:
381
T
arge
t: 2
020:
450
In
crea
se in
por
tfolio
size
of i
nstit
utio
nal i
nves
tors
B
asel
ine:
201
6: T
L 10
5 bi
llion
T
arge
t: 2
020:
TL
150
billi
on
Secu
ritiz
atio
n pr
oduc
ts to
incr
ease
dep
th a
nd c
ompe
titio
n in
the
bank
ing
sect
or.
Hed
ging
inst
rum
ents
to m
itiga
te in
tere
st ra
te a
nd
curr
ency
risk
. Ris
k m
itiga
tion
and
capi
tal r
elie
f too
ls fo
r do
mes
tic a
nd in
tern
atio
nal b
anks
. Lo
ng-te
rm fi
nanc
e to
ban
ks a
nd N
BFIs
(lea
sing
and
fa
ctor
ing
com
pani
es, a
nd d
istre
ssed
ass
et p
latfo
rms)
to
expa
nd fi
nanc
ing
to u
nder
-ser
ved
segm
ents
Su
pply
cha
in fi
nanc
e so
lutio
ns
IFC
Adv
isor
y: M
unic
ipal
bon
d m
arke
t dev
elop
men
t (w
ith IB
RD
) M
IGA
: Gua
rant
ee o
f non
-hon
orin
g of
a fi
nanc
ial
oblig
atio
n of
a st
ate-
owne
d en
terp
rise
(NH
FO-S
OE)
for
Turk
ish
Exim
bank
CPF
Obj
ectiv
e 3:
Enh
ance
d C
ompe
titiv
enes
s and
Em
ploy
men
t in
Sele
cted
Indu
stri
es
Inte
rven
tion
Logi
c: T
he S
CD h
ighl
ight
ed th
at T
urki
sh b
usin
esse
s nee
d to
impr
ove
thei
r com
petit
iven
ess t
hrou
gh in
nova
ting,
boo
stin
g pr
oduc
tivity
an
d m
ovin
g up
the
val
ue c
hain
. IB
RD’s
pro
gram
will
foc
us o
n a
deep
-div
e di
agno
stic
thr
ough
a C
EM i
n su
ppor
t of
Gov
ernm
ent
effo
rts o
n co
mpe
titiv
enes
s, tra
de li
bera
lizat
ion,
the
qual
ity o
f exp
orts
, inn
ovat
ion,
val
ue c
hain
pro
gres
sion
, the
abi
lity
to a
ttrac
t for
eign
dire
ct in
vest
men
t (FD
I),
and
regi
onal
inve
stm
ent c
limat
es. T
his
will
be
com
plem
ente
d by
TA
to im
prov
e th
e re
gula
tory
env
iron
men
t and
asp
ects
of c
ompe
titiv
enes
s rel
ated
to
reso
urce
effi
cien
cy a
nd c
lean
er p
rodu
ctio
n w
ith a
focu
s on
Org
aniz
ed In
dustr
ial Z
ones
(OIZ
s). T
his
ASA
will
und
erpi
n an
y re
leva
nt re
form
s tha
t m
ay b
e ca
ptur
ed in
the
futu
re D
PL s
erie
s, an
d w
ill h
elp
targ
et p
oten
tial h
igh-
grow
th o
r inn
ovat
ive
SMEs
(whi
ch in
turn
cou
ld b
e ta
rget
ed th
roug
h th
e fin
anci
al se
ctor
supp
ort p
ursu
ed u
nder
CPF
Obj
ectiv
e 2
abov
e). T
his s
trong
er fr
amew
ork
is ex
pect
ed to
lead
to e
nhan
ced
priv
ate s
ecto
r inv
estm
ent
whi
ch IF
C an
d M
IGA
cou
ld s
uppo
rt. I
n la
ter s
tage
s of t
he C
PF p
erio
d, IB
RD
may
step
-up
lend
ing
in su
ppor
t of i
nnov
atio
n, te
chno
logy
abs
orpt
ion,
cl
eane
r pro
duct
ion
and
an im
prov
ed b
usin
ess e
nviro
nmen
t, as
the
clie
nt d
eman
ds, a
nd th
is w
ill b
e re
flect
ed in
the
PLR
.
Thro
ugh
finan
cial
inte
rmed
iarie
s and
dire
ct e
ngag
emen
ts w
ith re
al se
ctor
com
pani
es, I
FC w
ill h
elp
stre
ngth
en th
e co
mpe
titiv
enes
s of T
urki
sh fi
rms
thro
ugh
inve
stm
ents
that
supp
ort n
ew te
chno
logi
es, i
nnov
atio
n an
d im
prov
ed g
over
nanc
e, a
s wel
l as r
egio
nal a
nd in
tern
atio
nal e
xpan
sion
. IFC
will
al
so c
ontin
ue in
vest
ing
in e
quity
fund
s tha
t pro
mot
e lo
cal e
ntre
pren
eurs
hip,
com
petit
iven
ess a
nd in
nova
tion,
whi
le a
lso
foste
ring
empl
oym
ent i
n hi
gh-g
row
th a
nd h
igh-
valu
e-ad
ded
sect
ors (
man
ufac
turin
g, te
leco
ms,
tech
nolo
gy a
nd a
grib
usin
ess)
. IFC
will
als
o ex
pand
the
Glo
bal T
rade
Fin
ance
pr
ogra
m w
hich
supp
orts
the
capa
city
of b
anks
to d
eliv
er tr
ade
finan
ce b
y pr
ovid
ing
risk
miti
gatio
n. IF
C w
ill p
rovi
de c
orpo
rate
gov
erna
nce
advi
sory
serv
ices
to T
urki
sh fi
rms,
as w
ell a
s tec
hnic
al a
ssist
ance
to im
prov
e lin
kage
s bet
wee
n SM
Es a
nd h
igh-
grow
th v
alue
cha
ins.
34
CPF
Obj
ectiv
e In
dica
tors
Su
pple
men
tary
Pro
gres
s Ind
icat
ors
WB
G P
rogr
am
Empl
oym
ent s
uppo
rted
by
IFC
clie
nts
(man
ufac
turi
ng, t
elec
om, t
echn
olog
y,
agri
busi
ness
) B
asel
ine:
39,
400
(201
5)
Tar
get:
5
9,00
0 (
2019
) o/
w Fe
mal
e Em
ploy
men
t sup
port
ed
Bas
elin
e: 1
1,00
0 (2
015)
T
arge
t:
12,
000
(20
19)
Empl
oym
ent s
uppo
rted
by
IFC
equ
ity fu
nds
inve
stee
s (#)
B
asel
ine:
1
5,00
0 (2
015)
T
arge
t:
17,
000
(201
9)
Stud
ents
reac
hed
by IF
C c
lient
s:
Bas
elin
e: 1
1,50
0 (2
015)
T
arge
t: 1
9,70
0 (2
019)
o/
w F
emal
e St
uden
ts re
ache
d B
asel
ine:
6,2
00 (2
015)
T
arge
t: 8
,800
(201
9)
Farm
ers r
each
ed b
y IF
C a
grib
usin
ess c
lient
s:
Bas
elin
e: 5
,400
(201
5)
Tar
get:
10,
900
(201
9)
New
lend
ing:
D
PL se
ries
Inno
vatio
n Pr
ojec
t A
SA:
CEM
on
prod
uctiv
ity
Busi
ness
env
ironm
ent a
nd F
DI-
loca
l firm
link
ages
M
anag
emen
t qua
lity,
inno
vatio
n an
d tra
de in
Ser
vice
s R
egul
ator
y en
viro
nmen
t and
job
oppo
rtuni
ties i
n Su
TP-
affe
cted
regi
ons
Enha
ncin
g co
mpe
titiv
enes
s and
gre
enin
g O
IZs
IFC
Cor
pora
te G
over
nanc
e ad
viso
ry p
roje
ct
IFC
inve
stm
ents
: In
vest
men
ts in
man
ufac
turin
g, te
leco
m &
IT, a
nd
agrib
usin
ess s
ecto
rs. S
uppo
rt fo
r voc
atio
nal t
rain
ing.
In
vest
men
ts in
priv
ate
equi
ty fu
nds a
nd o
ther
col
lect
ive
inve
stm
ent v
ehic
les
focu
sed
on h
igh-
grow
th, h
igh
valu
e-ad
ded
sect
ors.
Trad
e fin
ance
. FO
CU
S A
REA
2: I
NC
LUSI
ON
W
BG s
uppo
rt in
this
are
a ai
ms
to c
onso
lidat
e Tu
rkey
’s s
ucce
ss to
war
ds a
chie
ving
the
twin
goa
ls w
hile
als
o su
ppor
ting
effo
rts t
o re
ach
thos
e w
ho
are
left
behi
nd.
This
impl
ies
real
izin
g th
e de
mog
raph
ic d
ivid
end
by c
reat
ing
good
jobs
for i
ncre
asin
g nu
mbe
rs o
f wor
kers
, whi
ch in
volv
es b
ette
r in
tegr
atio
n of
wom
en, y
outh
and
SuT
Ps in
to th
e la
bor f
orce
, red
ucin
g ge
nder
ineq
ualit
ies
in a
cces
s to
eco
nom
ic o
ppor
tuni
ties,
redu
cing
regi
onal
la
bor-
mar
ket d
ispa
ritie
s, an
d ra
isin
g le
arni
ng le
vels
. The
WBG
’s p
rogr
am to
dat
e in
this
foc
us a
rea
had
a co
ncen
tratio
n on
ASA
whi
ch in
form
s go
vern
men
t pol
icy
and
DPL
s. Br
oad
issu
es o
f equ
ity, v
ulne
rabi
lity
and
regi
onal
dis
parit
ies
– th
at c
ut a
cros
s the
who
le o
f the
WBG
pro
gram
and
not
ju
st th
is F
ocus
Are
a –
will
con
tinue
to b
e th
e fo
cus
of in
-dep
th A
SA, t
hrou
gh a
futu
re C
EM o
r oth
er d
eep-
dive
dia
gnos
tic. A
n im
porta
nt e
volu
tion
of th
e W
BG p
rogr
am in
this
CPF
are
a ha
s bee
n an
d w
ill c
ontin
ue to
be
the
intro
duct
ion
of n
ew in
vest
men
t ope
ratio
ns fi
nanc
ed b
y th
e EU
’s F
acili
ty
for
Refu
gees
in
Turk
ey (
FRiT
) w
hich
has
allo
wed
the
WBG
to
com
plem
ent
its A
SA w
ith m
ore
in-d
epth
sup
port
thro
ugh
the
desi
gn a
nd
impl
emen
tatio
n of
FRi
T pr
ojec
ts.
CPF
Obj
ectiv
e 4:
Incr
ease
d Ef
fect
iven
ess o
f Soc
ial A
ssis
tanc
e
Inte
rven
tion
Logi
c: T
his C
PF o
bjec
tive
has t
he g
oal o
f im
prov
ing
effic
ienc
y an
d ef
fect
iven
ess i
n so
cial
ass
ista
nce
and
stren
gthe
ning
the
evid
ence
-bas
e fo
r pol
icie
s aim
ing
to n
arro
w g
aps b
etw
een
regi
ons a
nd e
nsur
e gr
eate
r inc
lusi
on o
f vul
nera
ble
grou
ps.
In th
is c
onte
xt, t
he W
BG
will
co
ntin
ue it
s sup
port
to m
akin
g th
e so
cial
ass
ista
nce
syst
em m
ore
effe
ctiv
e an
d ef
ficie
nt.
The
ASA
pro
gram
will
con
tinue
to p
rodu
ce a
nd
diss
emin
ate
mon
etar
y an
d no
n-m
onet
ary
indi
cato
rs o
f wel
fare
and
incl
usio
n, in
clud
ing
equa
lity
of o
ppor
tuni
ty a
nd m
ulti-
dim
ensi
onal
pov
erty
, and
pr
ovid
e te
chni
cal a
ssis
tanc
e to
the
Pove
rty R
educ
tion
Stra
tegy
and
Soc
ial A
ssis
tanc
e R
efor
m in
itiat
ive
of th
e M
inis
try o
f Fam
ily a
nd S
ocia
l
35
Polic
ies (
MoF
SP).
An
asse
ssm
ent o
f the
soci
al su
ppor
t sys
tem
of t
he d
isab
led
and
agin
g po
pula
tion
will
als
o be
und
erta
ken
to a
scer
tain
the
adeq
uacy
of s
ocia
l ass
ista
nce
and
supp
ort p
rogr
ams a
vaila
ble
to p
rote
ct th
ese
rela
tivel
y vu
lner
able
pop
ulat
ions
. C
PF O
bjec
tive
Indi
cato
rs
Supp
lem
enta
ry P
rogr
ess I
ndic
ator
s W
BG
Pro
gram
In
crea
sed
impa
ct o
f soc
ial a
ssis
tanc
e on
the
pove
rty
gap.
B
asel
ine:
9.9
% c
over
age
of p
over
ty g
ap
Tar
get:
20%
cov
erag
e of
pov
erty
gap
In
crea
sed
avai
labi
lity
of m
onet
ary
and
non-
mon
etar
y in
dica
tors
of w
elfa
re a
nd in
clus
ion
B
asel
ine:
No
indi
cato
r ava
ilabl
e T
arge
t: 10
diff
eren
t mon
etar
y/no
n-m
onet
ary
indi
cato
rs a
vaila
ble
New
fina
ncin
g:
DPL
serie
s So
cial
Incl
usio
n pr
ojec
t A
SA:
Pov
erty
Red
uctio
n St
rate
gy a
nd S
ocia
l Ass
ista
nce
Ref
orm
TA
on
Mul
ti -di
men
sion
al p
over
ty a
nd in
equa
lity
indi
cato
rs
Dis
abili
ty a
nd a
ging
stud
y
CPF
Obj
ectiv
e 5:
Incr
ease
d La
bor
Forc
e Pa
rtic
ipat
ion
of W
omen
& V
ulne
rabl
e G
roup
s
Inte
rven
tion
Logi
c: W
BG s
uppo
rt un
der t
his
obje
ctiv
e ai
ms
to b
ring
mor
e pe
ople
– e
spec
ially
wom
en a
nd y
outh
– in
to th
e fo
rmal
labo
r mar
ket.
The
Bank
int
ends
to
cont
inue
its
rol
e of
pro
vidi
ng a
com
preh
ensi
ve p
acka
ge o
f A
SA a
nd p
ropo
se r
efor
m r
ecom
men
datio
ns w
hich
can
gui
de
Gov
ernm
ent d
ecis
ion-
mak
ing
and
coul
d in
turn
be
supp
orte
d th
roug
h D
PLs.
The
influ
x of
SuT
Ps h
as c
reat
ed n
ew c
halle
nges
am
ong
the
labo
r for
ce,
parti
cula
rly f
or th
ose
in th
e so
uth-
east
whi
ch is
hos
ting
the
larg
est c
once
ntra
tion
of S
uTPs
. The
WB
G w
ill h
elp
to a
ddre
ss th
ese
issu
es th
roug
h co
ntin
ued
polic
y ad
vice
(sup
porte
d by
EU
and
SID
A tr
ust f
unds
) and
som
e pr
ojec
t int
erve
ntio
ns. A
FRi
T-fu
nded
labo
r mar
ket i
nclu
sion
pro
ject
(€50
m
illio
n, u
nder
pre
para
tion
and
expe
cted
to b
e ap
prov
ed in
mid
-201
7) ta
rget
s in
crea
sed
SuTP
par
ticip
atio
n in
the
labo
r m
arke
t thr
ough
pro
vidi
ng
acce
ss t
o A
LMPs
. Th
is i
s co
mpl
emen
ted
by F
RiT
fun
ding
of
€5 m
illio
n fo
r IB
RD a
dvis
ory
wor
k to
sup
port
faci
litat
ion
of e
mpl
oym
ent
and
entre
pren
eurs
hip
oppo
rtuni
ties i
n Su
TP-a
ffect
ed re
gion
s. F
urth
er IB
RD
and
/or E
U in
vest
men
ts w
ill b
e co
nsid
ered
whe
re th
ere
is c
lient
dem
and
and
a lin
k to
the
twin
goa
ls; o
ne a
rea
unde
r di
scus
sion
is li
velih
ood
supp
ort f
or S
uTPs
in th
e ag
ri-f
ood
sect
or. T
he W
BG is
als
o pr
ovid
ing
supp
ort t
o de
vise
a c
ompr
ehen
sive
stra
tegy
for m
anag
ing
mig
ratio
n in
the
labo
r mar
ket.
U
nder
this
obj
ectiv
e, IF
C a
ims t
o in
vest
in p
roje
cts t
hat p
rom
ote
grea
ter e
quity
in th
e ac
cess
of v
ulne
rabl
e an
d un
ders
erve
d gr
oups
to se
rvic
es, j
obs,
and
finan
ce. I
FC w
ill sc
ale
up it
s SM
E fin
anci
ng ta
rget
ed to
wom
en e
ntre
pren
eurs
and
farm
ers a
nd w
ill le
vera
ge N
BFI
s to
broa
den
acce
ss to
fina
nce
for t
hese
gro
ups.
It w
ill a
lso
inve
st in
key
man
ufac
turin
g co
mpa
nies
with
pre
senc
e in
the
sout
h ea
st re
gion
with
a v
iew
to s
uppo
rt em
ploy
men
t in
the
regi
on. A
imin
g to
hel
p un
ders
erve
d po
pula
tions
acc
ess
bette
r urb
an s
ervi
ces,
IFC
will
pur
sue
inve
stm
ent o
ppor
tuni
ties
in c
omm
erci
ally
-via
ble
urba
n in
frastr
uctu
re p
roje
cts i
n se
cond
-tier
, les
s dev
elop
ed re
gion
s. In
add
ition
, IFC
will
offe
r adv
isor
y se
rvic
es to
Tur
kish
cor
pora
tes t
o he
lp th
em
deve
lop
gend
er p
rogr
ams t
hat s
uppo
rt w
omen
’s e
mpl
oym
ent a
nd e
ntre
pren
eurs
hip
CPF
Obj
ectiv
e In
dica
tors
Su
pple
men
tary
Pro
gres
s Ind
icat
ors
WB
G P
rogr
am
Incr
ease
d Fe
mal
e La
bor F
orce
Par
ticip
atio
n B
asel
ine :
31.
5% in
201
5 Ta
rget
: 35%
by
2018
(10th
DP
targ
et),
41%
by
202
3 (N
atio
nal E
mpl
oym
ent S
trat
egy
targ
et)
Early
chi
ldho
od e
duca
tion
and
care
enr
olm
ent r
ates
B
asel
ine:
1,2
09,1
06 (N
atio
nal E
duca
tion
Stat
istic
s, Fo
rmal
Edu
catio
n 20
15/1
6)
Tar
get:
Incr
ease
of 1
0% o
ver b
asel
ine
New
fina
ncin
g:
DPL
serie
s EU
FR
IT L
abor
Mar
ket P
roje
ct
EU F
RIT
Edu
catio
n Pr
ojec
t Fu
ture
EU
-fund
ed p
roje
cts
for S
uTPs
36
Incr
ease
d yo
uth
part
icip
atio
n in
labo
r for
ce
Bas
elin
e : Y
outh
(15-
19) N
ot In
Edu
catio
n,
Empl
oym
ent o
r Tra
inin
g (N
EET)
: Mal
e 11
.3%
, Fem
ale
21.9
% (2
015)
Ta
rget
: Red
uce
NEE
T by
10%
In
crea
sed
rate
for S
uTP
was h
ave
a wo
rk
perm
it am
ong
elig
ible
SuT
Ps o
f wor
k-ag
e po
pula
tion
(gen
der d
isag
greg
ated
) B
asel
ine:
8,0
00 o
ut o
f 900
,000
(<1%
) elig
ible
Su
TP w
ork-
age
popu
latio
n ha
s a w
ork
perm
it (2
016)
Ta
rget
: 5%
incr
ease
(202
1), o
/w 2
5% a
re
wom
en
Dir
ect e
mpl
oym
ent s
uppo
rted
by IF
C
man
ufac
turi
ng c
lient
s in
sout
heas
t reg
ions
Bas
elin
e: 3
8,00
0 (2
015)
Targ
et:
43,0
00 (2
019)
(G
ende
r dis
aggr
egat
ed d
ata
bein
g co
llect
ed)
Num
ber o
f you
th in
ALM
Ps
Bas
elin
e: 7
4,74
8 m
ale
and
76,1
72 fe
mal
e (1
5-24
) cu
rren
tly in
ALM
Ps (2
015)
T
arge
t: In
crea
se o
f 10%
ove
r bas
elin
e
EU/IP
A P
roje
ct fo
r You
th A
t Ris
k A
SA:
IPA
for I
SKU
R, J
obs
Trus
t Fun
d SI
DA
TF
Pove
rty a
nd E
quity
lens
on
labo
r mar
kets
, inc
ludi
ng
Reg
iona
l dis
parit
ies
Mig
ratio
n m
anag
emen
t for
edu
catio
n Sy
rian
refu
gee
cris
is re
spon
se
NEE
T st
udy
Pi
lot o
f SE
Skill
s and
Eva
luat
ion
Qua
lity
of J
obs:
Min
imum
Wag
e an
d In
form
ality
IF
C:
IFC
Gen
der P
rogr
am
Fina
ncin
g w
omen
-ow
ned
com
pani
es
Fina
ncin
g pr
ivat
e se
ctor
com
pani
es w
hich
hav
e fo
otpr
ints
in
lagg
ing
regi
ons.
CPF
Obj
ectiv
e 6:
Str
engt
hene
d Pe
rfor
man
ce o
f the
Edu
catio
n an
d H
ealth
Sec
tors
Inte
rven
tion
Logi
c: T
he fo
cus o
f the
WBG
’s p
rogr
am in
the
heal
th se
ctor
is o
n pr
omot
ing
heal
thy
lifes
tyle
s thr
ough
atta
ckin
g be
havi
oral
risk
s. A
n on
goin
g IB
RD-fi
nanc
ed h
ealth
pro
ject
aim
s to
enha
nce
the
capa
city
of t
he M
inis
try o
f Hea
lth (M
oH) f
or e
vide
nce-
base
d po
licy
mak
ing,
incr
ease
the
man
agem
ent c
apac
ity o
f hos
pita
ls, a
nd im
prov
e th
e pr
even
tion
of s
elec
ted
non-
com
mun
icab
le d
isea
ses (
NCD
s). I
BR
D w
ill c
ontin
ue to
sup
port
the
seco
nd p
hase
of
the
heal
th t
rans
form
atio
n pr
ogra
m t
hrou
gh a
ctiv
ities
foc
usin
g on
pro
vidi
ng a
ppro
pria
te h
igh-
qual
ity c
are
by r
esul
ts-b
ased
in
terv
entio
ns a
nd p
aym
ent r
efor
ms.
The
ASA
pro
gram
will
als
o fo
cus
on a
sses
sing
the
sust
aina
bilit
y of
hea
lth u
tiliz
atio
n, th
roug
h th
e cr
eatio
n of
m
odel
ing
tool
s as
wel
l as
asse
ssin
g ut
iliza
tion
patte
rns.
Bui
ldin
g on
refo
rms
impl
emen
ted
with
IBR
D s
uppo
rt, a
nd o
n its
exp
erie
nce
in fi
nanc
ing
Turk
ey’s
firs
t hea
lth P
PP p
roje
cts,
IFC
will
con
tinue
to s
uppo
rt Tu
rkey
’s h
ealth
sec
tor t
hrou
gh in
vest
men
ts in
spe
cial
ized
hea
lth s
ervi
ce p
rovi
ders
, an
d th
roug
h fin
anci
al in
nova
tion
to h
elp
crea
te a
ltern
ativ
e ca
pita
l mar
ket s
olut
ions
for f
inan
cing
hea
lth s
ecto
r pro
ject
s. Fo
r exa
mpl
e, IF
C fin
ance
d Tu
rkey
’s fi
rst g
reen
field
infra
struc
ture
PPP
bon
d is
suan
ce u
nder
the
Elaz
ig H
ealth
PPP
pro
ject
, whi
ch w
as a
lso
supp
orte
d by
MIG
A a
nd E
BR
D
thro
ugh
cred
it en
hanc
emen
t pro
duct
s. IF
C w
ill su
ppor
t suc
h in
nova
tive
finan
cial
stru
ctur
es fo
r soc
ial a
nd o
ther
infra
stru
ctur
e pr
ojec
ts o
n a
sele
ctiv
e ba
sis. I
n ad
ditio
n, IF
C w
ill in
vest
in s
peci
aliz
ed s
ervi
ces
(e.g
., bi
o-ph
arm
aceu
tical
s m
anuf
actu
ring)
, whe
re it
can
pla
y a
role
in b
ringi
ng in
stra
tegi
c in
vest
ors.
MIG
A w
ill c
ontin
ue to
inve
st in
Tur
key’
s hea
lth P
PP p
rogr
am th
roug
h pr
ovid
ing
guar
ante
es a
nd c
redi
t enh
ance
men
t. In
the
educ
atio
n se
ctor
, the
CPF
pro
pose
s to
ste
p up
ASA
in re
spon
se to
the
rece
nt fa
ll in
PIS
A a
nd T
IMSS
sco
res
for
Turk
ey a
nd a
lso
help
the
Min
istry
of N
atio
nal E
duca
tion
(MoN
E) st
reng
then
its l
ife lo
ng le
arni
ng, t
each
er tr
aini
ng, a
nd d
ista
nce
educ
atio
n ap
proa
ches
. Giv
en th
e tim
e req
uire
d to
impa
ct le
arni
ng, r
esul
ts a
re li
kely
to b
e m
odes
t and
ach
ieve
d be
yond
the C
PF ti
mef
ram
e. I
BRD
will
impl
emen
t a F
RiT
-fina
nced
edu
catio
n pr
ojec
t
37
(€15
0 m
illio
n) w
hich
aim
s to
expa
nd e
duca
tion
serv
ice
deliv
ery
and
targ
ets r
esou
rces
to v
ulne
rabl
e Su
TP-a
ffect
ed a
reas
thro
ugh
cons
truct
ion
of n
ew
scho
ols.
IBRD
is a
lso
prov
idin
g te
chni
cal s
uppo
rt to
der
ive
a st
rate
gy to
inte
grat
e im
mig
rant
chi
ldre
n in
to th
e ed
ucat
ion
and
voca
tiona
l sys
tem
. In
ad
ditio
n, a
new
EU
/IPA
-fun
ded
proj
ect t
arge
ting
yout
h w
ho h
ave
drop
ped
out a
nd a
re a
t ris
k of
low
edu
catio
n le
vels
and
vul
nera
ble
to p
over
ty w
ill
be im
plem
ente
d in
are
as w
here
dro
p-ou
t rat
es o
f Tur
kish
you
th is
hig
h an
d w
here
SuT
P yo
uth
are
at ri
sk o
f nev
er e
nter
ing
scho
ol.
IFC
will
look
for
oppo
rtuni
ties t
o in
vest
in e
duca
tion
serv
ice
clie
nts t
o pr
omot
e pr
ivat
e vo
catio
nal t
rain
ing.
C
PF O
bjec
tive
Indi
cato
rs
Supp
lem
enta
ry P
rogr
ess I
ndic
ator
s W
BG
Pro
gram
In
crea
sed
perc
enta
ge o
f for
mal
scho
ol
enro
lmen
t of S
uTP
child
ren
aged
6-1
5 B
asel
ine:
469
,495
chi
ldre
n ac
cess
ing
educ
atio
n (1
49,4
39 in
form
al e
duca
tion
and
320,
056
in te
mpo
rary
edu
catio
n ce
nter
s: ra
tio
is 3
2%)
Targ
et: 6
00,0
00 c
hild
ren
acce
ssin
g ed
ucat
ion
(40%
in fo
rmal
edu
catio
n), 5
0-50
split
of
mal
e-fe
mal
e ch
ildre
n Im
prov
emen
t of p
rim
ary
and
seco
ndar
y pr
even
tion
of n
on-c
omm
unic
able
dise
ases
(N
CD
s)
Bas
elin
e (2
015)
: 10%
cha
nge
of ta
rget
po
pula
tion
usin
g se
rvic
es o
f Hea
lthy
Livi
ng
Cen
ters
Ta
rget
: 50%
N
umbe
r of P
atie
nts S
erve
d th
roug
h IF
C h
eath
se
ctor
clie
nts
Bas
elin
e: 0
(201
5)
Targ
et:
14.0
mill
ion
(201
9)
(Gen
der d
isag
greg
ated
dat
a be
ing
colle
cted
)
Num
ber o
f add
ition
al s
choo
ls re
habi
litat
ed o
r co
nstru
cted
und
er E
U F
RiT
-fina
nced
pro
ject
B
asel
ine:
0 (2
016)
T
arge
t: 5
6 (2
020)
Pe
rcen
t of h
ouse
hold
s tha
t rec
eive
from
hea
lth
wor
kers
cou
nsel
ling
or e
duca
tion
rela
ted
to h
ealth
y liv
ing
Bas
elin
e: 1
0% in
201
6 T
arge
t: 11
% in
202
0 (a
t end
of I
BRD
pro
ject
) Pe
rcen
t of u
sers
of H
ealth
Liv
ing
Cen
ters
satis
fied
with
eas
e of
acc
ess t
o H
ealth
y Li
ving
Cen
ters
an
d/or
resp
onsi
vene
ss o
f ser
vice
s to
user
s' in
divi
dual
nee
ds
Bas
elin
e: 5
0% in
201
6 T
arge
t: 70
% in
202
0
Len
ding
: H
ealth
Sec
tor p
roje
ct (o
n-go
ing)
N
ew fi
nanc
ing:
FR
IT E
duca
tion
proj
ect
Futu
re E
U-fu
nded
pro
ject
s fo
r Su
TPs
ASA
: Tu
rkey
obe
sity
cas
e st
udy
Doc
umen
ting
Turk
ish
expe
rienc
e in
toba
cco
use
cont
rol
Pove
rty a
nd E
quity
lens
on
nutri
tion
and
educ
atio
n,
incl
udin
g R
egio
nal D
ispa
ritie
s D
isab
ility
and
agi
ng st
udy
Hea
lth e
xpen
ditu
re p
roje
ctio
n ac
tuar
ial m
odel
TA
Po
litic
al E
cono
my
of H
ealth
Ref
orm
and
Ass
essm
ent o
f th
e U
tiliz
atio
n of
Prim
ary
Car
e A
naly
sis o
f PIS
A-T
IMSS
Te
ache
r tra
inin
g an
d pr
imar
y ed
ucat
ion
refo
rm T
A
IFC
: In
vest
men
ts in
inno
vativ
e fin
anci
al st
ruct
ures
suc
h as
he
alth
Pro
ject
Bon
ds
Supp
ortin
g pr
ivat
e se
ctor
hea
lthca
re c
ompa
nies
, es
peci
ally
in sp
ecia
lized
hea
lth s
ervi
ces
FO
CU
S A
REA
3: S
UST
AIN
AB
ILIT
Y
Econ
omic
gro
wth
and
urb
aniz
atio
n in
Tur
key
are
not y
et d
ecou
pled
from
risi
ng e
nerg
y us
e, p
ollu
tion
and
gree
nhou
se-g
as (G
HG
) em
issi
ons,
so th
ere
is m
uch
pote
ntia
l for
gre
ater
reso
urce
effi
cien
cy a
nd p
ollu
tion
abat
emen
t. Th
e ch
alle
nges
are
to p
rovi
de c
onne
ctiv
ity a
nd a
gglo
mer
atio
n be
nefit
s in
an e
nviro
nmen
tally
, soc
ially
and
fina
ncia
lly s
usta
inab
le w
ay (p
artic
ular
ly a
s reg
ards
redu
cing
ene
rgy
inte
nsity
and
avo
idin
g w
ater
sca
rcity
) as
wel
l as
to e
nsur
e th
at c
ities
are
mor
e di
sast
er-r
esili
ent.
The
WB
G’s
pro
gram
will
hel
p ad
dres
s th
e SC
D-h
ighl
ight
ed c
halle
nge
of r
eorie
ntin
g gr
owth
to
war
ds a
mor
e gr
een,
resi
lient
and
sus
tain
able
pat
tern
. It w
ill p
rovi
de s
uppo
rt by
bui
ldin
g on
the
wel
l-est
ablis
hed
IBR
D a
nd IF
C c
olla
bora
tion
in
ener
gy a
nd u
rban
/mun
icip
al s
ervi
ces,
whe
re 7
5 pe
rcen
t of I
BRD
’s in
vest
men
t pro
gram
is a
lread
y co
ncen
trate
d, a
nd w
ill e
ncou
rage
evo
lutio
n in
the
38
prog
ram
tow
ards
issu
es cr
itica
l to
Turk
ey’s
futu
re g
row
th.
This
is c
onsi
sten
t with
the
10th D
P Tr
ansf
orm
atio
n Pr
ogra
ms f
ocus
ed o
n in
crea
sed
ener
gy
effic
ienc
y an
d ge
nera
tion
from
loca
l res
ourc
es, u
rban
rede
velo
pmen
t, im
prov
ed a
cces
s to
pot
able
wat
er a
nd w
aste
wat
er s
ervi
ces,
effe
ctiv
e us
e of
w
ater
in a
gric
ultu
re, a
nd su
stai
nabi
lity
in th
e us
e of
nat
ural
cap
ital.
CPF
Obj
ectiv
e 7:
Impr
oved
rel
iabi
lity
of e
nerg
y su
pply
and
gen
erat
ion
of g
reen
ene
rgy
Inte
rven
tion
Logi
c: T
he W
BG’s
cur
rent
pro
gram
is h
eavi
ly c
once
ntra
ted
in th
e en
ergy
sect
or, w
ith IB
RD p
olic
y ad
vice
and
TA
pav
ing
the
way
for
stepp
ed-u
p pr
ivat
e se
ctor
eng
agem
ent s
uppo
rted
by IF
C an
d M
IGA
. It e
ncom
pass
es: (
i) in
crea
sing
the
perc
enta
ge o
f ren
ewab
le e
lect
ricity
gen
erat
ion
and
impr
ovin
g its
inte
grat
ion
into
the
grid
thro
ugh
the
ongo
ing
Ren
ewab
le E
nerg
y In
tegr
atio
n, th
e Pr
ivat
e Se
ctor
Ren
ewab
le E
nerg
y an
d En
ergy
Ef
ficie
ncy,
the G
eoth
erm
al D
evel
opm
ent a
nd th
e EU
/IPA
Ene
rgy
Sect
or T
A P
roje
cts;
(ii) e
nhan
cing
ene
rgy
secu
rity
and
gas s
tora
ge c
apac
ity th
roug
h th
e on
-goi
ng G
as S
ecto
r Dev
elop
men
t Pro
ject
and
the
prop
osed
Gas
Sto
rage
Exp
ansi
on P
roje
ct; (
iii)
deve
lopi
ng e
nerg
y tra
ding
and
rest
ruct
urin
g BO
TAS
thro
ugh
the
EU/IP
A E
nerg
y Se
ctor
TA
Pro
ject
; and
(iv)
sec
urin
g an
d di
vers
ifyin
g Tu
rkey
’s g
as s
uppl
y w
ith g
as im
ports
from
Aze
rbai
jan
thro
ugh
the
Tran
s-A
nato
lian
Pipe
line
(TA
NA
P) P
roje
ct –
whe
re $
800
mill
ion
in IB
RD lo
ans t
o Tu
rkey
’s B
OTA
Ş an
d A
zerb
aija
n’s S
GC
leve
rage
d $6
00 m
illio
n fro
m th
e A
sian
Infra
struc
ture
Inve
stm
ent B
ank
(AIIB
) and
the
expe
ctat
ion
of u
p to
$1.
2 bi
llion
in g
uara
ntee
s fro
m M
IGA
. G
iven
the
com
para
tive
adva
ntag
e of
IBRD
eng
agem
ent i
n th
e se
ctor
, fur
ther
ene
rgy
inve
stm
ents
may
follo
w, o
n cl
ient
dem
and,
obs
ervi
ng th
e W
BG
’s c
asca
de
appr
oach
on
leve
ragi
ng p
rivat
e fin
anci
ng a
s nee
ded
and
appr
opria
te.
IBR
D, I
FC, a
nd M
IGA
will
wor
k cl
osel
y to
geth
er to
hel
p Tu
rkey
impr
ove
its
PPP
polic
y fra
mew
ork
to st
imul
ate
furth
er p
rivat
e se
ctor
ene
rgy
inve
stm
ents
, stre
ngth
en th
e en
ergy
regu
lato
ry e
nviro
nmen
t, an
d in
crea
se lo
ng-te
rm
finan
cing
for
rene
wab
le e
nerg
y. T
his
ASA
will
als
o fe
ed in
to th
e de
sign
of f
utur
e D
PLs,
whi
ch c
ould
stim
ulat
e in
vest
men
ts in
ren
ewab
le e
nerg
y ge
nera
tion
and
trans
mis
sion
and
the
rela
ted
clim
ate
chan
ge b
enef
its.
IFC
aim
s to
supp
ort T
urke
y’s e
nerg
y se
curit
y, a
nd h
elp
reba
lanc
e its
ene
rgy
mix
thro
ugh
sele
ctiv
e, a
nd st
rate
gic e
ngag
emen
ts in
the s
ecto
r an
d w
ill s
eek
out i
nves
tmen
ts w
here
IFC
can
pla
y a
mob
iliza
tion
role
, par
ticul
arly
in th
e fo
rm o
f FD
Is.
IFC
will
pro
vide
long
-term
fin
ance
to
dist
ribut
ion
com
pani
es to
upg
rade
the
dist
ribut
ion
netw
ork.
IFC
als
o ai
ms t
o he
lp p
ower
com
pani
es a
ddre
ss c
urre
ncy
mis
mat
ches
by
offe
ring
suita
ble
finan
cing
sch
emes
to h
edge
thei
r for
eign
exc
hang
e ris
ks.
IFC
will
see
k in
vest
men
t opp
ortu
nitie
s in
new
tech
nolo
gies
(e.g
. sm
art m
eter
s) to
he
lp a
ddre
ss s
ome
of th
e pr
oble
ms
in th
e po
wer
dist
ribut
ion
sect
or. I
n ad
ditio
n, IF
C w
ill lo
ok fo
r opp
ortu
nitie
s to
sup
port
shor
tage
s in
ga
s su
pply
thro
ugh
inve
stm
ents
in g
as in
frast
ruct
ure
incl
udin
g im
port
term
inal
s an
d st
orag
e as
we l
l as
gas
dist
ribut
ion.
MIG
A re
mai
ns
open
to su
ppor
ting
FDI i
n th
e re
new
able
spac
e th
roug
h th
e pr
ovis
ion
of p
oliti
cal r
isk
insu
ranc
e gu
aran
tees
. C
PF O
bjec
tive
Indi
cato
rs
Supp
lem
enta
ry P
rogr
ess I
ndic
ator
s W
BG
Pro
gram
Re
newa
ble
elec
tric
ity g
ener
atio
n as
pe
rcen
tage
of t
otal
gen
erat
ion
(%).
B
asel
ine:
31.
5% in
201
5 Ta
rget
: 33%
in 2
021
Va
lue
of lo
ans p
rovi
ded
by IF
C c
lient
s to
rene
wabl
e pr
ojec
ts
Bas
elin
e: $
38m
(201
5)
Targ
et:
$6
6m (2
019)
Inst
alle
d re
new
able
ene
rgy
capa
city
fina
nced
th
roug
h IB
RD
Pro
ject
s (M
W)
Bas
elin
e: 0
in 2
016
T
arge
t 116
MW
in 2
021
R
enew
able
ene
rgy
gene
rate
d th
roug
h IB
RD
(M
Wh/
year
) B
asel
ine:
0 in
201
6
Tar
get:
200,
000
in F
Y20
17
Ong
oing
lend
ing:
G
as S
ecto
r Dev
. Pro
ject
R
enew
able
Ene
rgy
Int.
Proj
ect
SME
Ener
gy E
ff. P
roje
ct
Priv
. Sec
tor R
enew
able
Ene
rgy
& E
nerg
y Ef
f. Pr
ojec
t N
ew le
ndin
g:
TAN
AP
Geo
ther
mal
Dev
elop
men
t pro
ject
N
ew D
PLs
Gas
Sto
rage
Exp
ansi
on P
roje
ct
39
Tota
l pow
er g
ener
atio
n an
d di
stri
butio
n cl
ient
s rea
ched
(IFC
) (m
illio
ns)
Bas
elin
e: 4
.33
(201
5)
Targ
et:
6.89
(201
9)
Incr
ease
d ca
paci
ty o
f gas
stor
age
(bcm
).
Bas
elin
e: 2
.8 b
cm in
201
6 Ta
rget
: 3.8
bcm
in 2
021
G
as im
port
s thr
ough
TAN
AP (b
cm/a
nnum
).
Bas
elin
e: 0
in 2
016
Targ
et: 5
in 2
021
Win
d en
ergy
gen
erat
ed fr
om p
lant
s con
nect
ed to
su
bsta
tions
fund
ed u
nder
REI
P (M
Wh/
year
) B
asel
ine:
0 in
201
6 T
arge
t: 1,
743
in 2
018
Pow
er g
ener
ated
(GW
h) th
roug
h IF
C fi
nanc
ial
serv
ices
B
asel
ine:
16,
700
(201
5)
Tar
get:
34,6
00 (2
019)
R
estru
ctur
ing
of B
OTA
S
Bas
elin
e: N
o in
201
6 T
arge
t: Y
es in
202
1
Impr
oved
and
mor
e tra
nspa
rent
who
lesa
le g
as
tradi
ng th
roug
h th
e es
tabl
ishm
ent o
f Gas
Tra
ding
Pl
atfo
rm
Bas
elin
e: N
o in
201
6 T
arge
t: Y
es in
202
1
Impr
oved
lega
l, re
gula
tory
and
inst
itutio
nal
envi
ronm
ent i
n th
e Tu
rkey
gas
mar
ket t
hrou
gh th
e en
actm
ent o
f the
am
endm
ent t
o th
e N
atur
al G
as
Mar
ket L
aw
Bas
elin
e: N
o in
201
6 T
arge
t: Y
es in
202
1
New
ene
rgy
sect
or p
roje
ct(s
) A
SA:
Roo
ftop
Sola
r PV
Ass
essm
ent
Dis
com
s ana
lysi
s EU
/IPA
Ene
rgy
Sect
or T
echn
ical
Ass
ista
nce
Prog
ram
IF
C:
IFC
fina
ncin
g fo
r dis
tribu
tion,
and
gas
infra
stru
ctur
e su
ch
as im
port
term
inal
s, st
orag
e, a
nd d
istri
butio
n.
IFC
supp
ort f
or n
ew fi
nanc
ing
inst
rum
ents
– lo
cal
curr
ency
fina
ncin
g an
d cu
rren
cy sw
aps t
o m
itiga
te
curr
ency
risk
CPF
Obj
ectiv
e 8:
Impr
oved
sust
aina
bilit
y an
d re
silie
nce
of c
ities
Inte
rven
tion
Logi
c: T
he W
BG
int
egra
ted
enga
gem
ent
will
con
tinue
to
focu
s on
hel
ping
citi
es t
o be
com
e m
ore
envi
ronm
enta
lly a
nd s
ocia
lly
susta
inab
le a
nd re
silie
nt th
roug
h su
ppor
ting
Turk
ey’s
“Sm
art C
ities
” ap
proa
ch. T
hrou
gh th
e in
vest
men
t coo
rdin
atio
n pl
atfo
rm b
etw
een
IBRD
and
IF
C u
nder
the
joi
nt “
Susta
inab
le C
ities
Pro
gram
”, t
he W
BG
will
mai
ntai
n a
cons
truct
ive
dial
ogue
with
the
cen
tral
gove
rnm
ent
on p
olic
y an
d re
gula
tory
cha
nges
to m
oder
nize
the
exis
ting
mun
icip
al fi
nanc
ing
and
inve
stm
ent f
ram
ewor
k, th
us p
avin
g th
e w
ay fo
r ste
pped
-up
priv
ate
inve
stm
ent
supp
orte
d by
IFC
and
MIG
A.
In p
artic
ular
, IB
RD’s
supp
ort t
o ur
ban
plan
ning
, inf
rastr
uctu
re a
nd c
apita
l inv
estm
ent p
lann
ing,
and
eff
orts
to im
prov
e m
unic
ipal
fina
ncia
l cap
acity
sho
uld
enab
le th
e W
BG to
exp
and
its s
uppo
rt to
sec
ond-
tier c
ities
, inc
ludi
ng in
fron
tier a
nd u
nder
serv
ed re
gion
s, w
ith
the
ultim
ate
goal
of e
nabl
ing
them
to s
ecur
e fin
anci
ng d
irect
ly f
rom
com
mer
cial
inve
stor
s an
d th
e ca
pita
l mar
kets
for
thei
r cr
ucia
l inf
rast
ruct
ure
need
s. Ex
pand
ing
the
avai
labi
lity
of m
unic
ipal
fina
nce
optio
ns, i
mpr
ovin
g cr
editw
orth
ines
s and
an
effe
ctiv
e m
unic
ipal
PPP
fram
ewor
k ar
e ar
eas t
hat
requ
ire c
ontin
uing
WBG
col
labo
ratio
n.
Fina
lly,
advi
ce o
n lo
w-c
arbo
n ur
ban
man
agem
ent,
clim
ate
chan
ge p
lann
ing
and
rela
ted
inve
stm
ent
iden
tific
atio
n in
maj
or u
rban
cen
ters
will
be
purs
ued,
aim
ing
to sh
are
glob
al b
est p
ract
ice.
IBRD
’s le
ndin
g po
rtfol
io w
ill c
ontin
ue to
targ
et st
rate
gic
inve
stm
ents
that
bui
ld o
n kn
own
area
s of
com
para
tive
adva
ntag
e. T
he S
usta
inab
le C
ities
pro
gram
is e
nvis
aged
as
a se
ries
of p
roje
cts,
with
new
40
proj
ects
com
ing
into
the
prog
ram
bas
ed o
n th
e re
adin
ess
of sp
ecifi
c ci
ties a
nd th
eir i
nves
tmen
t pla
ns, a
nd it
will
incl
ude
EU-f
unde
d TA
in p
lann
ing
and
polic
y an
alys
is to
hel
p ci
ties
addr
ess
envi
ronm
enta
l, so
cial
and
fin
anci
al s
usta
inab
ility
cha
lleng
es. A
n on
goin
g La
nd R
egis
try a
nd C
adas
tre
Mod
erni
zatio
n pr
ojec
t als
o co
ntrib
utes
to im
prov
ing
loca
l gov
ernm
ent f
inan
cing
and
enh
anci
ng se
rvic
e de
liver
y to
citi
zens
thro
ugh
incr
ease
d ac
cess
to
pro
perty
mar
ket i
nfor
mat
ion,
incl
udin
g va
luat
ions
. Fo
r im
prov
ing
the
resil
ienc
e of
citi
es, I
BRD
cou
ld a
lso
deliv
er a
n in
vest
men
t pro
ject
aim
ing
to st
reng
then
crit
ical
pub
lic fa
cilit
ies f
or e
arth
quak
e re
sist
ance
and
to su
ppor
t bet
ter e
nfor
cem
ent o
f bui
ldin
g co
des a
nd la
nd u
se p
lans
.
Focu
s are
as fo
r IFC
and
MIG
A in
clud
e di
rect
eng
agem
ent w
ith m
unic
ipal
ities
to st
reng
then
thei
r cap
acity
for f
inan
cial
man
agem
ent,
infra
stru
ctur
e pr
ojec
t des
ign,
pre
para
tion
and
impl
emen
tatio
n. IF
C ca
n le
vera
ge a
wid
e ra
nge
of p
rodu
cts i
nclu
ding
long
-term
loan
s (bo
th in
eur
os a
nd li
ra),
mun
icip
al b
onds
, and
hed
ging
tool
s to
help
mun
icip
aliti
es m
anag
e th
eir f
orei
gn-e
xcha
nge
loan
s. B
uild
ing
on su
cces
ses i
n Is
tanb
ul a
nd Iz
mir,
IFC
aim
s to
help
oth
er c
redi
t-wor
thy
citie
s cre
ate
a pi
pelin
e of
ban
kabl
e pr
ojec
ts, p
rovi
ding
tech
nica
l ass
ista
nce
and
capa
city
bui
ldin
g, d
irect
seni
or
loan
s (in
eur
os o
r lira
) or u
sing
a p
ortfo
lio a
ppro
ach
by c
hann
elin
g its
fund
s to
citie
s thr
ough
loca
l ban
ks.
C
PF O
bjec
tive
Indi
cato
rs
Supp
lem
enta
ry P
rogr
ess I
ndic
ator
s W
BG
Pro
gram
Im
prov
ed se
rvic
e de
liver
y an
d ex
pand
ed
acce
ss to
dig
ital l
and
regi
stry
and
cad
aste
r in
form
atio
n In
crea
sed
cust
omer
satis
fact
ion
at n
atio
nal
leve
l B
asel
ine:
85%
in 2
016
Targ
et: 9
5% in
202
1 N
umbe
r of a
dditi
onal
peo
ple
bene
fittin
g fr
om
impr
oved
urb
an in
fras
truc
ture
thro
ugh
IBRD
an
d IF
C fi
nanc
ing
(num
ber i
n m
illio
ns)
Bas
elin
e: 3
.3 (2
015)
Ta
rget
: 4.
7 (2
019)
(G
ende
r dis
aggr
egat
ed d
ata
to b
e co
llect
ed)
Incr
ease
d re
silie
nce
of c
ities
thro
ugh
num
ber
of d
isas
ter r
esili
ent p
ublic
bui
ldin
gs
retr
ofitt
ed, r
econ
stru
cted
, or n
ewly
co
nstr
ucte
d th
roug
h IB
RD a
nd F
RIT
finan
cing
B
asel
ine:
0
Targ
et: 1
10 b
y 20
21
Pilo
ts o
f mas
s pro
perty
val
uatio
n co
mpl
eted
and
ne
w p
rope
rty v
alua
tion
polic
y In
form
ed
Bas
elin
e: N
o (2
016)
T
arge
t: Y
es (2
020)
Im
prov
e pl
anni
ng c
apac
ity o
f and
acc
ess t
o ta
rget
ed
mun
icip
al se
rvic
es th
roug
h ad
optio
n of
sect
oral
, sp
atia
l and
cap
ital i
nves
tmen
t pla
ns in
four
m
unic
ipal
ities
B
asel
ine:
0 in
201
6 T
arge
t: 10
sect
oral
pla
ns a
dopt
ed in
at l
east
4
mun
icip
aliti
es b
y 20
21
Sust
aina
ble
urba
n tra
nspo
rt pl
anni
ng a
dopt
ed in
se
lect
ed c
ities
/mun
icip
aliti
es.
Bas
elin
e: 0
. T
arge
t: 2
citie
s/m
unic
ipal
ities
A
vera
ge tr
avel
tim
e (m
in) i
n ur
ban
publ
ic
trans
porta
tion
(tram
way
and
met
ro) (
IFC
) B
asel
ine:
45
(201
5)
Tar
get:
25 (2
019)
U
rban
was
te w
ater
trea
ted
by IF
C c
lient
s (M
m3 )
Bas
elin
e: 0
(201
5)
Tar
get:
4,4
70,0
00 (2
019)
U
rban
solid
was
te tr
eate
d by
IFC
clie
nts (
tons
m
anag
ed/y
ear)
Ong
oing
lend
ing:
M
unic
ipal
Ser
vice
s Pro
ject
La
nd R
egis
try P
roje
ct
New
lend
ing:
Su
stai
nabl
e C
ities
1, 2
, 3 p
roje
cts
Dis
aste
r Ris
k M
anag
emen
t pro
ject
N
ew D
PL se
ries
ASA
: H
ousi
ng st
udy
TA u
nder
the
DR
M G
FDR
R G
rant
EU
/IPA
Gra
nt fo
r Sus
tain
able
Citi
es
IFC
: C
ities
pla
tform
– a
dvis
ory
serv
ices
M
unic
ipal
infra
stru
ctur
e in
vest
men
ts in
met
ropo
litan
ci
ties i
nclu
ding
Ista
nbul
, Izm
ir, A
ntal
ya, B
ursa
and
ad
ditio
nal c
ities
com
men
sura
te w
ith th
eir
cred
itwor
thin
ess
41
Bas
elin
e: 0
(201
5)
Tar
get:
133
,000
(201
9)
Turk
ey D
isas
ter M
anag
emen
t Stra
tegy
and
Tur
key
Ris
k R
educ
tion
Plan
ado
pted
B
asel
ine:
No
in 2
016
Tar
get:
Yes
CPF
Obj
ectiv
e 9:
Incr
ease
d su
stai
nabi
lity
of in
fras
truc
ture
ass
ets a
nd n
atur
al c
apita
l
Inte
rven
tion
logi
c: I
ncre
asin
g ef
ficie
ncy
in th
e us
e of
pub
lic a
sset
s and
nat
ural
cap
ital i
s hi
ghlig
hted
in th
e SC
D a
s a k
ey d
evel
opm
ent c
halle
nge.
In
par
ticul
ar, i
mpr
ovin
g th
e ef
ficie
ncy
of e
nerg
y co
nsum
ptio
n is
criti
cal f
or T
urke
y’s c
ompe
titiv
enes
s and
sust
aina
ble e
cono
mic
gro
wth
. Th
e WB
G’s
pr
ogra
m in
ene
rgy
effic
ienc
y ha
s ong
oing
IBR
D in
vest
men
ts th
roug
h th
e SM
E En
ergy
Effi
cien
cy p
roje
ct a
nd th
e Pr
ivat
e Se
ctor
Ren
ewab
le E
nerg
y an
d En
ergy
Effi
cien
cy p
roje
ct a
s wel
l as a
bro
ad p
rogr
am o
f IFC
fina
ncin
g to
sust
aina
ble
and
rene
wab
le e
nerg
y. T
hese
pro
ject
s will
con
tinue
to b
e im
plem
ente
d w
ith f
ollo
w-o
n or
sca
led-
up p
roje
cts
base
d on
clie
nt d
eman
d, in
clud
ing
supp
ort t
o en
ergy
effi
cien
cy in
pub
lic b
uild
ings
thro
ugh
a po
ssib
le n
ew in
vest
men
t ope
ratio
n.
IBRD
is a
lso
supp
ortin
g th
e de
velo
pmen
t of c
arbo
n pr
icin
g in
strum
ents
and
mar
kets
thro
ugh
a gr
ant-
fund
ed
Partn
ersh
ip fo
r Mar
ket R
eadi
ness
(PM
R) p
roje
ct.
The
ASA
pro
gram
is su
ppor
ting
the
effic
ient
use
of w
ood
fuel
s (an
d fu
ture
step
ped-
up e
ngag
emen
t co
uld
be e
nvis
aged
) an
d a
stud
y on
how
to
finan
ce S
usta
inab
le D
evel
opm
ent
Goa
l (S
DG
) #1
2 w
hich
foc
uses
on
sust
aina
ble
prod
uctio
n an
d co
nsum
ptio
n. IB
RD’s
new
soci
al a
nd e
nviro
nmen
tal f
ram
ewor
k w
ill se
rve
as a
solid
gro
und
for f
urth
erin
g di
alog
ue a
nd b
uild
ing
in-c
ount
ry c
apac
ity
on so
cial
and
env
ironm
enta
l soc
ial s
usta
inab
ility
pol
icie
s and
ana
lytic
al w
ork.
The
WBG
will
als
o ad
voca
te a
step
ped-
up p
rogr
am in
are
as id
entif
ied
in th
e SC
D a
s im
porta
nt, s
uch
as th
e su
stain
able
use
of w
ater
and
fore
st re
sour
ces.
This
wou
ld su
ppor
t som
e of
the
mos
t vul
nera
ble
grou
ps in
Tur
key,
na
mel
y, s
mal
lhol
der
farm
ers
and
fore
st co
mm
uniti
es. I
n th
e w
ater
sec
tor,
a po
ssib
le I
BRD
irrig
atio
n pr
ojec
t is
unde
r di
scus
sion
. In
the
fore
stry
sect
or, r
ecom
men
datio
ns fr
om th
e rec
ent F
ores
t Pol
icy
Not
e ha
ve le
d to
dis
cuss
ions
of a
pot
entia
l pro
ject
. En
gage
men
t in
agric
ultu
re is
also
pos
sible
. Fi
nally
, the
WBG
is p
rovi
ding
EU
-fun
ded
TA o
n tra
nspo
rt is
sues
and
som
e of
this
wor
k co
uld
lead
to fi
nanc
ing
oppo
rtuni
ties d
urin
g th
e CP
F pe
riod.
IF
C w
ill c
ontin
ue to
sup
port
priv
ate
sect
or in
vest
men
ts in
man
ufac
turin
g, S
MEs
, mun
icip
al a
nd tr
ansp
ort i
nfra
stru
ctur
e, w
ith a
vie
w to
impr
ovin
g en
ergy
effi
cien
cy a
nd r
educ
ing
GH
G e
mis
sion
s. IF
C w
ill a
lso
prov
ide
long
-term
fun
ding
to
inte
rmed
iarie
s w
ith p
ortfo
lios
focu
sed
on e
nerg
y ef
ficie
ncy
area
s and
seek
dire
ct e
ngag
emen
ts a
t the
indu
stria
l lev
el to
hel
p re
duce
ene
rgy
inte
nsity
and
pol
lutio
n. IF
C w
ill c
ontin
ue to
exp
and
finan
ce
for r
esou
rce
effic
ienc
y bo
th d
irect
ly th
roug
h in
vest
men
ts in
man
ufac
turin
g, a
grib
usin
ess a
nd se
rvic
es se
ctor
s, an
d th
roug
h fin
anci
al in
stitu
tions
, e.g
. th
roug
h in
nova
tive
inst
rum
ents
suc
h as
gre
en b
onds
and
mor
tgag
e-co
vere
d bo
nds.
At t
he m
unic
ipal
leve
l, it
will
see
k op
portu
nitie
s to
sup
port
ener
gy-e
ffici
ent p
ublic
tran
spor
t, m
unic
ipal
bui
ldin
gs, w
ater
and
was
tew
ater
, and
stre
et li
ghtin
g pr
ojec
ts.
In a
dditi
on to
fina
ncin
g, IF
C w
ill p
rovi
de
advi
sory
supp
ort a
nd tr
aini
ng to
key
inst
itutio
ns a
nd c
orpo
rate
s to
help
intro
duce
new
ene
rgy
effic
ienc
y pr
actic
es to
Tur
key’
s res
iden
tial h
ousi
ng a
nd
indu
stria
l sec
tors
. M
IGA
rem
ains
ope
n to
exp
andi
ng it
s sup
port
to m
unic
ipal
infr
astru
ctur
e with
a v
iew
to im
prov
ing
ener
gy e
ffici
ency
and
redu
cing
ov
eral
l em
issi
on l
evel
s. In
thi
s re
gard
, MIG
A c
ould
pro
vide
cre
dit
guar
ante
es f
or m
ajor
mun
icip
al i
nfra
struc
ture
pro
ject
s, si
mila
r to
pre
viou
s as
sista
nce
to Is
tanb
ul a
nd Iz
mir.
C
PF O
bjec
tive
Indi
cato
rs
Supp
lem
enta
ry P
rogr
ess I
ndic
ator
s W
BG
Pro
gram
42
Cum
ulat
ive
ener
gy sa
ving
s ach
ieve
d th
roug
h W
BG-fi
nanc
ed e
nerg
y se
ctor
pro
ject
s (M
Wh)
. B
asel
ine:
1,1
16,0
00 in
201
6 Ta
rget
: 6,
000,
000
in 2
021
Annu
al G
HG
em
issi
ons e
ither
redu
ced
or
avoi
ded
thro
ugh
the
WBG
pro
gram
(to
nnes
/yea
r)
Bas
elin
e: 4
0,00
0 in
201
6 Ta
rget
: 84
4,40
0 IB
RD re
duce
d, 3
73,0
00
redu
ced
IFC
, 600
,000
avo
ided
at c
ount
ry-
leve
l thr
ough
ado
ptin
g G
B st
anda
rds (
2021
)
Car
bon
mar
ket p
olic
y op
tions
del
iver
ed to
and
co
nsid
ered
by
the
Gov
ernm
ent
The
follo
win
g in
dica
tors
– o
r oth
er re
leva
nt o
nes
- co
uld
be c
onsi
dere
d at
the
time
of th
e C
PF P
LR if
th
ese
area
s are
dev
elop
ed a
s par
t of t
he W
BG
pr
ogra
m:
The
Nat
iona
l Int
ellig
ent T
rans
port
Syst
ems
(ITS
) st
rate
gy o
pera
tiona
lized
B
asel
ine:
No
Tar
get:
Yes
. C
hang
es to
the
Fore
st L
aw, r
egul
atio
ns o
r pol
icie
s to
pro
mot
e gr
eate
r priv
ate
sect
or in
vest
men
t pa
rtici
patio
n in
har
vest
ing
and
deve
lopm
ent o
f pl
anta
tions
. B
asel
ine:
Min
imal
T
arge
t: 2
or m
ore
pilo
t are
as c
over
ed
Ong
oing
lend
ing:
R
enew
able
Ene
rgy
Int.
Proj
ect
SME
Ener
gy E
ff. P
roje
ct
Priv
. Sec
tor R
enew
able
Ene
rgy
& E
nerg
y Ef
f. Pr
ojec
t EU
/IPA
Ene
rgy
Proj
ect
New
lend
ing:
N
ew D
PLs
Irr
igat
ion
Reh
abili
tatio
n Pr
ojec
t Po
ssib
le fu
ture
pro
ject
s in
supp
ort o
f Tra
nspo
rt/Lo
gist
ics
and/
or S
usta
inab
le F
ores
try M
anag
emen
t A
SA:
Fore
stry
Stu
dy
CEM
on
Prod
uctiv
ity
IFC
: IF
C fi
nanc
ing
to su
ppor
t res
ourc
e ef
ficie
ncy
proj
ects
IF
C p
rovi
sion
of l
ong
term
loan
s to
finan
cial
in
term
edia
ries t
o su
ppor
t RE/
EE p
roje
cts
IF
C in
vest
men
ts a
nd a
dvis
ory
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Annex 2. CPS (FY12-FY16) Completion and Learning Review Report
CPS Board Discussion: March 27th, 2012
CPS Progress Report (Board Presentation): October 3rd, 2014
Period Covered by CPS Completion and Learning Review: FY12 – FY16
1. SUMMARY OF KEY FINDINGS
1. Turkey’s National Development Plans (NDPs) for 2007-2013 and 2014-18 formed the strategic underpinning of the CPS Objectives (FY12-15), which were: (i) Enhanced Competitiveness and Employment; (ii) Improved Equity and Public Services; (iii) Deepened Sustainable Development; and a cross-cutting objective of Sharing Turkey’s Experience – Results, Knowledge, and Capacity. In the CPS Progress Report (CPSPR, FY14), and in response to a Government request, the period of the CPS was extended to cover FY16 to allow for better alignment with the electoral cycle within Turkey.
2. Overall CPS program performance is rated Moderately Satisfactory. This rating is based on the Self Evaluation Framework, revised through the CPS PR, as most of 33 CPS outcomes indicators were either achieved or partially achieved.
3. Overall WBG performance in designing and implementing the CPS is rated Good. Collaboration within the WBG and with development partners was adequate, and the lending program was complemented by knowledge products. Combined IFC/IBRD total delivery reached $7.8 billion during the CPS period, and MIGA’s guarantee gross exposure grew to $1.695 billion in FY16. Turkey has become IFC’s second largest client globally as IFC’s own account investments in Turkey have far exceeded the expected FY12-16 program of US$2.5-2.8 billion, reaching $3.58 billion in long-term finance for its own account. During the CPS period, MIGA`s guarantee gross exposure grew from $458 million in FY13 to $1.695 billion in FY16, making Turkey MIGA’s largest exposure country, with a good product mix of traditional political risk insurance as well as the non-honoring, credit guarantees.
2. CPS DEVELOPMENT OUTCOME
4. The CPS Development Outcome rating is Moderately Satisfactory. The program was built on three strategic objectives, eight thematic areas (revised down from ten in the CPSPR), and thirty-three outcomes, of which most were either achieved or partially achieved. A thematic priority, Sharing Turkey’s Experience, cut across the three pillars but there are no indicators associated to it and it is treated in this CLR as a thematic priority rather than a measureable objective.
A. First Strategic Objective: Enhanced Competitiveness and Employment – Partially Achieved
A.1 Thematic Area 1: Sustained macroeconomic and financial stability and strengthened exports, domestic savings, and external resilience
5. Thematic area 1 outcomes are partially achieved: one of two outcome indicators was met and the other was not. The first outcome indicator involved an increase in take-up of a new voluntary pension scheme: from a baseline of 3.1 million participants in 2012 there were, by end-FY16, 6.2 million
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participants, reflecting a 100% increase. The second outcome involved a projected 10% increase in the number of tax payers filing income tax returns; it was not achieved, as it was linked to a proposed new income tax law, which has not yet been ratified. 6. The objectives of the WBG program under this result area were underpinned by a series of DPLs, albeit with delays. Two DPLs were delivered in the CPS period: the US$800 million Competitiveness and Savings DPL (FY13), and the first, US$500 million, operation of a planned two-operation Sustained Shared Growth DPL (FY15). The proposed second operation was not delivered, as two parliamentary elections (in June and November 2015) put DPL discussions on the back-burner until a new Government was in place.
7. The Bank also provided a broad knowledge program in support of Thematic area 1. Among many deliveries (listed in the results matrix), the most important were a Flagship report, Turkey’s Transitions (FY15), which was a comprehensive analysis of Turkey’s progress to the threshold of high income and contributed to the thematic priority of sharing Turkey’s experience globally, and a Country Economic Memorandum (CEM), which identified policy options and interventions to enhance Turkey’s trade performance and competitiveness. These reports were widely disseminated and unlocked a useful discussion on the importance of economic institutions for sustained growth beyond the high-income threshold. They also helped to inform the domestic policy debate, as the Government released a new batch of 25 Transformation Programs around the time that the reports were discussed in Turkey. Two technical reports also informed Government policy: a Public Expenditure Review analyzed Turkey’s fiscal policy over the previous decade and identified the broader macroeconomic implications of fiscal policy, notably with regard to supporting future economic growth; and a Customs Union Evaluation report provided quantitative and qualitative estimates of the effects of the Customs Union (CU) and demonstrated that the trade agreement has been highly beneficial for both Turkey and the EU.
A.2. Thematic Area 2: Improved investment and business climate; deepened and broadened access to finance; increased employment
8. Thematic area 2 outcomes are partially achieved. Five outcome indicators were met, one partially met, one non-verified, and two not met.
9. The indicator linked to improved intellectual property rights was not achieved within the CPS period, but the law was ultimately ratified in December 2016. Sub-indicators on (i) targeting reduced entry barriers and improved intellectual ownership were not met because, by end-FY16, there were only 5,512 new patent applications (against a 2013 baseline of 5,600). The indicator on (ii) the number of registered companies in the company regulation system (MERSIS) could not be verified due to the non-public disclosure of data against a 2012 baseline of 204 companies registered.
10. By contrast, sub-indicators associated with improving access to finance by the private sector were mostly achieved. The sub-indicators (iii-iv) measuring the performance of firms benefitting from IBRD financing showed better performance of export and sales growth. Indicator (v), on the percentage of women saving at financial institutions in past years, exceeded the target value of 3.3%, reaching 5.5% by end-2015. However, (vi) a targeted increase in corporate bonds issuance was not achieved due to contraction in the market, and a sub-indicator focused on (vii) better performing non-performing loan (NPL) ratios for financial institutions (FIs) supported by IBRD had mixed results. At the same time outcome indicators linked to the IFC program were fully achieved as IFC (viii) reached about 760,000 SME clients and about 112,000 additional farmers and also generated about 66,000 direct jobs, against targeted 70,000.
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11. The Bank delivered the 2013 and 2015 DPLs as well as a series of projects using credit lines as bridge funding to the banking sector to lengthen the maturity of funding and widen the range of instruments available to SMEs, exporters, and other target sectors (such as renewable energy and energy efficiency). Advisory Services and Analytics (ASA) informed the design of these projects and covered such issues as consolidated supervision and bank resolution, capital market development (jointly with IFC) on corporate bonds, mutual funds, pension funds, support for microfinance, financial inclusion, and financial sector infrastructure, especially in secured transactions and in the insurance sector to strengthen solvency supervision. 7
12. IFC’s contribution included the use of securitization structure to increase the depth and competition of the banking sector and to support corporate clients. In the previous CPS period (FY08-11), IFC worked with Akbank to revive the Diversified Payment Rights (DPR) asset class in Turkey. After that first successful project, Finansbank, Yapi Kredi Bank, Denizbank and Garanti Bank launched similar programs supported by IFC, with the proceeds of the DPR issuances being used for on-lending to agribusiness, MSMEs and sustainable energy projects. DPRs have since become a critical instrument for raising long-term capital for Turkish banks due to their strong credit structure and reliance on offshore cash flows. IFC worked directly with Turkish corporates to help companies access capital market financing. It served as an anchor investor in the $450 million Eurobond issued by Mersin International Port, Turkey’s first single asset infrastructure Eurobond.
13. Knowledge on job creation and the investment climate was generated through programmatic TA on human development (FY12-13), a programmatic job series (FY12-15), competitiveness analysis (FY14), innovation and business climate (FY15), and a value chain trade, services, and logistics programmatic series starting in FY15. The Regional Investment Climate Assessment (RICA) project, funded by EU Instrument for Pre-Accession (IPA) funds as the first Reimbursable Advisory Service (RAS) related output in Turkey, also completed an enterprise survey at the regional level by September 2016.
A.3. Result Area 3: Improved governance through enhanced transparency to ensure a level playing field
14. This outcome was fully achieved. A Council of Ministers decision in March 2016 reduced the threshold establishing auditing requirements for companies. Thanks to the new threshold value, the number of firms with independent audits by end-2016 is expected to exceed 5,000, against a target of 3,500 (2013 baseline, 2,500).
15. The WBG supported this thematic area through DPLs and knowledge products funded through Trust Funds Relevant ASA (listed in the result framework section) included TA on building capacity for the Parliament; strengthening the public internal audit function; enhancing the supreme audit function of the Courts of Accounts, justice sector performance; and governance. In addition, the Bank completed a Transport Sector Public Expenditure Review.
16. In 2013, IFC collaborated with the Turkish Corporate Governance Association (TKYD), the only local provider of corporate governance-related services in the country. In particular, it helped three
7 These projects were Access to Finance for SMEIII (FY13), followed by the Innovative Access to Finance Project (FY15), and MSME and Large Enterprise Supply Chain Project (FY16); as well as energy sector credit lines for SME Energy Efficiency (FY13) and Additional Finance for Private Sector Renewable Energy and Energy Efficiency (FY12). The Long Term Finance Guarantee Project, proposed to be delivered in FY15, was dropped.
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companies to assess their corporate governance systems practices; provided trainings to TKYD member companies; and helped TKYD to develop corporate governance advisory services as a commercial product. In addition, IFC helped 13 of its biggest investment clients to improve corporate governance.
17. Although the modest objective under this thematic area was achieved, engagement between the WBG and Turkey could have been broader. According to the SCD findings, weaknesses in corporate governance reduce firms’ ability to access new markets, technology, and finance. In particular, weak accounting standards constitute an important obstacle to accessing financing. Similarly, Turkey is losing ground to peer countries in indicators related to the business climate, as reforms have slowed since 2008.
B. Second Strategic Objective: Improved Equity and Social Services - Partially Achieved
B.1 Thematic Area 4: Improved quality and equity of social services
18. Result area 4 outcomes are fully achieved, as all three indicators were met. (i) The Ministry of Health was reorganized to focus exclusively on the health sector’s stewardship functions by 2015; and (ii) all public hospitals were organized under public hospital unions paid on the basis of performance contracts within a global budget. In addition, (iii) cervical cancer screening among women aged 20 to 69 increased by almost 83%, against a target of 30%.
19. The outcomes of thematic area 4 were underpinned by the Bank’s Health Sector Reform Support project as well as IFC and MIGA financing of health campuses constructed through PPP schemes. The Bank delivered a follow-up health operation (US$134 million) in FY16. In addition, IFC invested US$172 million and mobilized US$256.5 million to support three pioneering PPP projects in the healthcare sector, aiming to build three modern health campuses (with a total capacity of 7,000 beds) and improve the service quality and efficiency of public health services. IFC also invested US$30 million in a leading company in molecular imaging and oncology treatment services. During the CPS period, IFC reached 3.2 million patients through its health sector portfolio companies.
20. The outcomes were supported by a wide range of ASA, including TA on pharmaceuticals systems management, economic sector work on performance-based contracting in family medicine and TA support on sharing Turkey`s health sector reform experiences with other countries. The engagement on the education sector was fully realized through TA on improving educational outcomes and promoting excellence in Turkish schools, plus the ongoing engagement on higher education sector efficiency and improvement.
B.2. Thematic Area 5: Progress toward gender equality and inclusive labor markets
21. Thematic area 5 outcomes were partially achieved: although there was progress against all three outcome indicators, only one was met, one was partially met, and one was non-verified. IFC helped increase women’s labor force participation by supporting 2,600 women-owned SMEs and it also partnered with the International Women Directors Network to help increase the number of women on corporate boards. An indicator on helping at least 20 companies to achieve Gender Equity Certification was not fully achieved, though 17 were helped. Finally, it was not possible to verify improved access for social assistance (SA) beneficiaries to active labor market programs, as measured by the number of people enrolled in ISKUR programs, due to data collection shortcomings.
22. Country-level performance in this area included an increase in female labor force participation from 27.6% in 2010 to 31.5% in 2015, though it fell short of a target of 32.6%. At the same time, the
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coverage of ISKUR`s vocational training rose from 210,000 in 2010 to 465,000 in 2012, but fell to 335,000 in 2015. Turkey’s medium-term challenge, to boost the participation of youth and women in the labor force, still remains, as the OECD average female labor force participation rate is 65 percent.
23. The objectives of thematic area 5 were mainly supported through ASA and the DPLs. The Sustained Shared Growth DPL I (FY15) helped to improve female labor force participation, but the delay in delivering the follow-up DPL hampered progress. The Bank mobilized a SIDA Trust Fund which supported a broad analytical program for increasing women’s access to economic opportunity, and it also provided TA to the Ministry of Development on subnational poverty dynamics. In addition, when Turkey began to flood with almost three million refugees (making it the largest host country in the world), the Bank analyzed the identification and quantification of their impact on urban areas in southeastern Turkey, government relations, labor markets, and pressures on public services and host communities.
C. Third Strategic Objective: Deepened Sustainable Development – Partially Achieved
C.1. Thematic Area 6: Improved supply of reliable and efficient energy, increased use of renewable energy sources and climate actions under implementation
24. Thematic area 6 outcomes were achieved. Four of five outcome indicators were met, and one was partially met. Turkey continued its solid energy sector reform program satisfactorily while expanding its renewable energy generation capacity. The supply of reliable and efficient energy was improved by reaching 73,000 MW generation capacity, representing a 24,000 MW increase since end-2010. The percentage of renewable electricity generation in total generation reached 31.5% by end-2015, against a target of 30%. Through its power generation/distribution portfolio companies, IFC reached about 7.5 million electricity customers, against a target of 7.2. Moreover, Turkey`s energy security improved, as the end-2016 target to increase gas storage capacity by 19% is being reached, thanks to satisfactory implementation of the IBRD-financed Gas Sector Development Project. Successful implementation of the Gas Sector Development Project prompted preparations for a new IBRD-financed project aiming to further expand Turkey’s gas storage capacity.
25. By contrast, cumulative energy savings, which aimed to reach 4,372 GWh or 1.5% of 2013 total annual demand by 2016 through IBRD-financed projects in SME Energy Efficiency (EE) and Renewable Energy (RE) credit lines, has reached just 3,772 GWh. Besides other reasons (such as low intermediary bank capacity on EE and an under-developed EE services market), failure to meet the target is due partly to an inability to capture EE investments under the intended credit lines: while some SMEs borrowed to buy machinery which is energy efficient, they did not use SME EE/PSREEE project funds in order to avoid the hassle of producing documentation to prove higher energy efficiency.
26. Achievements under this thematic area deserve particular attention. The WBG deployed almost all types of available instruments, achieved strong donor coordination, and mobilized substantial external finance. The Energy Sector Technical Assistance Program, financed by the EU/IPA, supported Turkey’s alignment with the EU Energy Policy. Clean Technology Funds (CTF) grants and concessional loans exceeding US$150 million co-financed IBRD lending operations. The Partnership for Market Readiness (PMR) project is supporting Turkey’s work on setting up a greenhouse gas monitoring, reporting and verification (MRV) system for the power and industrial sectors, and analyzing the various market-based and other GHG mitigation policy options that Turkey may introduce: Turkey was the first country to start implementing a PMR project and it has already shared its experiences on, e.g., its MRV system with peers in the PMR forum.
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27. IFC`s private sector financing provided a significant contribution to achieving targets in this area, as it invested US$659 million in six power generation projects and US$163 million in one power distribution project, supporting generation of nearly 17,000 GWh per year. In addition, to reduce Turkey’s dependence on imported gas, IFC invested US$40 million in an emerging Turkey-based Oil-field Services Company expanding its operations domestically, and US$50 million in the largest private sector oil and gas producer in Turkey, to expand its oil and gas production from the frontier provinces in southeastern Turkey. Finally, through its financing in both financial and real sectors, IFC supported a number of climate change related projects. IFC provided roughly $300 million to FIs targeting renewable energy and GHG emissions: specifically, it provided US$96 million to Yapi Kredi Leasing in sustainable energy finance; US$150 million to the TSKB to finance projects that reduce GHG emissions, improve waste management practices, and increase efficiency of raw materials for processing and manufacturing; and US$35 million to Is Leasing, co-financed by CTF, to promote energy efficiency and renewable energy projects in various sectors in Turkey through a wholesale approach In the real sector, it financed EE projects including in the cardboard industry, textiles, agribusiness, and packaging film industry as well as solid waste and wastewater treatment, construction, public transport and healthcare campuses. In FY16, IFC invested $100 million equity in Akfen Enerji, a renewable energy platform company with a portfolio of operational hydropower and solar projects of 211MW and an additional 178MW under construction and development.
28. Like lending support, ASA was diverse and innovative while managing to mobilize external funds to finance the products. An Energy Reform Milestones and Challenges (FY15) report captured the success and lessons learnt through sector reform, not only supporting the Turkey program but also serving as a global knowledge product to share the Turkish experience. ESMAP funded an Institutional Review of Energy Efficiency (FY15), Social Monitoring of the Energy Sector (FY14), TA on the electricity market (FY12) and an ongoing analysis of distribution companies. It is important particularly to emphasize the EU/IPA-funded Energy Sector TA studies, under RETF modality for the first time introduced in Turkey, which helped the primary energy sector counterpart, MENR, to improve its analytical capacity as well as to receive high quality advisory services.
C.2. Thematic Area 7: Strengthened environmental management and adaptation to climate change
29. Thematic area 7 outcomes were partially achieved, as two of three indicators were met and one was not. The indicator linked to (i) Improved Water Basin Management through preparation of protection action plans for Turkey’s 25 river basins, taking into account principles of the Water Framework Directive, was achieved through policy support provided under the ESES DPL. The CPSPR-introduced indicator (ii) targeting the completion of a draft Integrated Water Basin Management plan and establishment of a Basin Commission in a selected pilot basin, was achieved. However, the other indicator introduced at the CPSPR, viz. targeting the establishment of Natural Capital Accounts in two selected water basins, was not met as it was discovered that more support was needed for valuation of natural resources prior to establishing natural capital accounts. WBG support came through ASA and was fully devoted to valuation methodology and two case studies to prepare the foundation for establishing natural capital accounts at a later stage. Two World Bank publications - one on forest and the other on water valuation methods – were prepared with the support of MoFWA and delivered to relevant government agencies. As part of the umbrella TA on natural capital, the forestry component included the development of a Forest Policy Note (FPN) and socio-economic survey of forest villagers with the Directorate General of Forestry (DGF) in the Ministry of Environment and Water.
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30. Country-level performance was impacted due to persistent delays in the ratification of the water law intended to improve adaptation to climate change through enhanced water resources management. Accordingly, River Basin Management Plans, including climate change adaptation measures for water basins, were not completed. However, it is noteworthy that a newly approved regulation on ‘Environmental Permits and Licenses’ sets the facilities to obtain an integrated ‘e-permit’ (2,394 issued as of 2012 and 3,222 by end 2013) as well as the hiring of an environmental officer who is responsible for the environmental permitting process for the facility.
C.3. Thematic Area 8: Improved sustainability of Turkish cities
31. Thematic area 8 outcomes were partially achieved, with three of seven outcomes indicators fully met, three partially met, and one not met. A seismic risk mitigation target was achieved, as 806 public buildings in Istanbul were retrofitted or reconstructed to resist a major earthquake, compared to a target of 763. Likewise, the customer satisfaction rate for Land Registry services achieved 90% against a target of 85%. In addition, an additional 2,000,000+ people in cities financed under the Municipal Services Project gained access to enhanced urban services, e.g., water supply, sewerage, and solid waste management, against a target of 800,000. Finally, governance was improved in six municipalities through performance improvement efforts and competition among local public administrations to receive a higher Citizen Report Card rating, with the use of EU funds.
32. IFC linked outcome indicators were also partially achieved. Some 277,000 weekday riders benefitted from the new Istanbul Kadikoy/Kartal metro commuter link in the first half of 2016 (against targeted 419,000). While the Izmir electric tramway project and improved traffic management system are still under construction; they are on track to reach the target of enabling an additional 240,000 people to have access to transportation by 2018. Finally, the reduction of untreated wastewater discharge into the Aegean Sea through an expansion of the IFC-financed Izmir Waste Water Treatment Plant was not met, due to a delay in construction, but results are expected to be reached in 2017, as the project becomes operational by end-2016. in addition, the Bank completed implementation of a railways project while also supporting the de-bundling of TCDD (achieved in mid-2016).
33. A major driver of success under thematic area 8 was pre-CPS approved IBRD and IFC financing that disbursed relatively smoothly during the CPS period. However, there have been setbacks with successor projects; for example, the Sustainable Cities project was not delivered until mid-FY17and the National Disaster Risk Management project is still under preparation.
34. To improve development prospects for Turkish Cities, the WBG launched in 2015 a Joint Implementation Program (JIP) for sustainable cities. The objective was to promote provision of a seamless package of complementary IBRD-IFC advisory services and financing to encourage uptake of sustainable development solutions by Turkey’s cities. IFC’s work on sustainable cities has been a strong success. IFC invested in Izmir and Istanbul, both of which have strong credit histories and are in a position to access market-based finance at commercial rates, and developed strategic client engagement partnerships with these municipalities. IFC also launched the ECA Cities Platform, a first of its kind project development facility that is designed to help municipalities increase their pipeline of bankable projects, by funding technical studies on technology options, environmental and social risks and different financing options. IFC used this facility in Istanbul, Izmir, and Antalya to support infrastructure project development. IFC also invested in a novel green mortgage finance program with a commercial lender, Odeabank, through a credit line to promote the construction and sale of green residential properties; and it supported the construction
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of green hospitals in Kayseri, Adana and Ankara. Lastly, IFC provided TA to Government and private sector actors in promoting green housing.
35. Bank support in this area was through ASA and Trust Funds. An Urbanization Review was prepared to share the successful urbanization process in Turkey and to provide policy recommendations that the Government is using for addressing critical challenges of city competitiveness, housing markets, urban transport, municipal finance, and interagency cooperation. The Bank also helped build the capacity of Turkey’s National Emergency and Disaster Management Agency (AFAD) through a US$1.5 million grant from the Global Facility for Disaster Reduction and Recovery (GFDRR) in 2015. In addition, a Municipal Credit Worthiness Academy was conducted with participation of 25 of 30 metropolitan municipalities, funded by PPIAF and Korean Green Growth Funds. Regarding the transport sector, Ministry of Transport as well as TCDD have prioritized (to be funded under EU/IPA funds) a TA program for urban transport, ITS and intermodal transport.
D. Cross Cutting Thematic Priority: Sharing Turkey`s Experience – Results, Knowledge and
Capacity
36. Knowledge sharing opportunities were developed in the second half of the CPS period. The Bank’s flagship report, Turkey’s Transitions, analyzed Turkey’s progress to the threshold of high income, identified the fundamental sources, unlocked a useful discussion on the importance of economic institutions for sustained growth and served as a useful means to share Turkey`s development story. Similarly, the urbanization review was used to disseminate Turkey`s vast experience on urbanization, triggering the Governments of Afghanistan, Morocco, and Tunisia to visit Turkey to learn more about its experience. In addition, health and energy sector knowledge products were able to capture milestones and challenges of successful sectoral reforms implemented in Turkey.
37. IBRD lending operations also triggered south-south cooperation between Turkey and other countries. The achievements of the Istanbul Seismic Risk Mitigation Projects were disseminated in more than 40 countries in various events. Land Registry and Cadaster Project achievements were introduced to more than 10 country missions to Turkey, and TKGM hosted (with Bank support) the World Cadaster Summit 2015 in Istanbul, which was a high-profile international event attracting some 3,300 cadastral and related professionals and organizations from 92 countries.
3. WORLD BANK GROUP PERFORMANCE
38. The World Bank Group’s overall performance is rated good. The assessment is based on (i) continued relevance of the CPS objectives with Turkey`s national development objectives, as well as effective use of mid-course revision through the CPS PR to align with the country`s evolving needs and challenges; (ii) robust and effective implementation of the program, through pro-active measures, which resulted in high disbursement ratios; (iii) the proactive and constructive dialogue carried out with Turkish authorities and other stakeholders to respond in a timely manner to evolving country needs and to mitigate risks as appropriate; (iv) strong internal coordination among WBG institutions; and (v) the successful focus on effective coordination with other IFIs and the EU to boost development impact. However, performance was also challenged by: (i) cancellations and delays in delivering key IBRD lending operations; (ii) delayed decision–making due to the 2015 electoral cycle; and (iii) uneven linking of operations with WBG outcomes under some thematic areas, making it difficult, in certain instances, to measure the impact of WBG support.
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Design
39. The CPS objectives remained relevant to Turkey`s development agenda. The initial CPS objectives were aligned with the Ninth Development Plan (2007-2013) and remained highly relevant to Turkey`s Tenth Development Plan (2014-2018). The CPS pillars were mutually reinforcing and linkages across thematic areas were strong.
40. The WBG engagement was flexible, and the CPS PR was used as an opportunity to respond to evolving circumstances. The extension of the CPS during the CPS PR to cover FY16 was appropriate, given that 2015 was subject to a protracted electoral cycle that would impact implementation progress, and it was used effectively to enhance the focus on addressing remaining pockets of poverty and vulnerability. The CPS thematic areas were tightened from ten to eight at the time of the CPS PR.
41. The program maintained selectivity and focus on the lending side, albeit less so on the non-lending side. In line with the CPS objectives, the lending program remained focused on SME financing, renewable energy and energy efficiency, and urban development. In keeping with the Bank’s approach in Turkey (and many other MICs) of providing a broad knowledge program, the ASA program was designed to provide global knowledge to the Government in areas where there was demand for partnership, and also targeted at building the knowledge base in other areas to pave the way for future engagement. That said, the non-lending portfolio was spread quite broadly, potentially rendering the impacts less measurable. This implies more opportunities to improve cooperation with the government to design the future ASA program.
42. The CPS PR identified critical economic, political and regional risks that ultimately materialized to some degree. Mitigation measures, such as proactive portfolio management and enhanced communication and outreach strategies, helped manage risks so that their impact on realizing the CPS objectives was reduced. A CPS Steering Committee, chaired by the IBRD Country Director and the Undersecretaries of the Treasury and of the Ministry of Development, helped to guide the program, tackle implementation challenges, and take decisions that have significant bearing on the future of proposed projects. The risk that reform would lag was identified at the time of the CPSPR, and the delivery of the DPL series was adapted accordingly. Even unanticipated regional risks, arising from the large influx of Syrian refugees from 2012 onwards, were effectively incorporated into the program through the Bank providing knowledge support on the identification and quantification of the impact of the Syrian refugee crisis on host communities.
43. The CPS result matrix set out measurable targets. Thematic areas (such as energy, health and urban development) that were supported by lending operations tended to demonstrate clear linkages between WBG operations and outcomes realized. In result areas predominantly supported by ASA, the link was less directly apparent. In certain instances, WBG outcomes were expressed in terms of legislative acts of Parliament rather than the effects or changes those laws were intended to bring, and in some important cases the legislative acts had not been completed by the end of the CPS period (e.g., the proposed patent law, income tax law, and gas market law).
Implementation
44. New IBRD lending reached US$4.3 billion. The original CPS target of US$4.5 billion for FY12-15 was revised upwards at the time of the CPS PR to US$6.5 billion for FY12-16, mainly because the single borrower limit had been lifted. However total IBRD delivery reached US$4.3 billion during the CPS period,
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allocated in 12 projects, mainly because delays in reaching final decisions on new lending resulted in dropping or slipping operations. A proposed US$300 million Long-Term Finance Guarantee project and a US$50 Water Basin Management project were both dropped, and delays impacted the second DPL under the Sustained Shared Growth series (US$500 million), the Geothermal Development Project (US$250 million), and the Sustainable Cities Project (US$133 million). The main reason behind these slippages were three:
i. Project designs that challenge the administrative and legal framework of the client and under-
estimate the potential impact of such designs on future implementation. ii. Slow intra-governmental decision-making, mostly due to a protracted electoral cycle, but
sometimes due to weak ownership of projects; iii. Poor alignment of Bank and Government administrative and procedural requirements for IPFs;
and iv. Challenges in communicating the value-addition of IBRD financing in the face of ministerial
ambivalence. This is because, from the perspective of a line ministry, an IBRD loan does not result in a real financial addition to the line ministry’s budget (IBRD funds generally substitute for budget that the Ministry of Finance would otherwise have provided to the line ministry) while IBRD lending adds complexity in the form of learning about and using IBRD procedures.
IBRD aimed during the CPS period to increase the composition of IPF lending in the Bank’s program, where such partnership could be especially effective because IBRD could bring knowledge and implementation support in addition to financing. However, because IPFs proved difficult to prepare, the Government continued to show a preference for lines of credit and DPLs. New IPF lending for the past eight years has tended to be concentrated in additional financing and in sectors where IBRD is already active and well-known, since in these circumstances most implementation problems will already have been resolved. By contrast, efforts to exploit new lending opportunities tended to encounter multiple difficulties over time, and often ended without success. In some of these cases, IBRD’s project preparatory work (due diligence, project design, etc.) opened a path for other IFIs and partners to provide financing because those partners recognized the rigor and relevance of Bank project preparation and because the Government found the other IFIs had lower financing costs or less demanding requirements. This situation meant that IBRD played an important convening and leveraging role for other development partners, while sometimes not ending up as one of the financiers.
45. During the CPS period, IFC invested a record of US$4.55 billion - of which US$3.58 billion was for IFC’s own account and US$973 million in mobilization. During the CPS period, IFC`s financing, including mobilization, was allocated in 84 projects8, focused on energy, municipal and transport infrastructure, financial institutions (with emphasis on energy efficiency), access to finance for SMEs and women entrepreneurs, deepening of capital markets, private health and education, and enhancing the competitiveness of Turkish firms including their expansion to other emerging markets. Through its investments IFC continued to offer longer maturity, higher environmental and social standards, better corporate governance and global knowledge. This strong performance was the result of increasing financing to both new and existing clients. In line with its strategy, IFC has focused its advisory services assistance to firm-level supporting the pipeline and portfolio companies.
8 27 projects in Financial Markets (US$ 1.59 billion), 19 in Infrastructure (US$ 1.54 billion), 29 in Manufacturing, Agribusiness, and Services (US$ 1.26 billion), and 9 in Media, Technology and Telecoms (US$ 169 million).
53
46. MIGA`s guarantee gross exposure grew from $458 million in FY13 to $1.695 billion in FY16. MIGA intervention helped mobilize foreign private financing in support of strategic areas of the economy, such as healthcare, the financial sector and the transport sector. Turkey is MIGA’s largest exposure country; the product mix includes traditional political risk insurance as well as the non-honoring, credit guarantee product. Joint IFC-MIGA business development resulted in MIGA's US$347 million in guarantees to five new projects, benefitting also from IFC's financing, in municipal infrastructure and healthcare.
47. IBRD portfolio implementation reached record high disbursement ratios throughout the CPS period. Intensive portfolio monitoring resulted in early detection of problems. The disbursement ratio, except for FY14 when it dipped to 20%, remained above 30% so that almost one-third of available IBRD resources was disbursed in each fiscal year, due in part to the application of a newly-established intensive follow-up mechanism in FY14.
Table 1: Selected IBRD Portfolio Indicators for Turkey (FY12- FY16)
FY12 FY13 FY14 FY15 FY16
Number of Active Projects 11 12 12 12 10
Net Commitments (US$ml) 4,742 5,763 5,078 4,310 3,899
Disbursement Ratio (investment) 36% 37% 20% 36% 31%
Proactivity Index9 67% 100% 100% 100% 100%
% Projects at Risk 6% 17% 17% 8% 0%
% Commitments at Risk 7% 11% 14% 4% 0%
% Problem Projects 9% 17% 8% 8% 0%
48. The IBRD portfolio became further concentrated while contracting almost 25% in volume. The joint impact of (i) delayed delivery of new operations and (ii) fast disbursement of active projects reduced the active portfolio from US$5.5 billion to US$3.9 billion. This concentration of the portfolio helped Bank and Government teams focus on implementation challenges while mobilizing timely and sufficient resources for critical issues in safeguards, procurement, and financial management. With experienced PIUs, additional finance to existing operations with retroactive financing emerged as a preferred option. 49. IFC’s committed portfolio at the beginning of the CPS period stood at US$2.3 billion (own account), while at the end it increased to US$3.8 billion. The portfolio is further diversified, with financial markets operations decreasing from 48% in FY12 to 41% in FY16, infrastructure increasing from 27% to 34%, manufacturing, services and agriculture portfolio falling from about 22% to 20%, and media, technology and telecommunications increasing from 3% to 5%. The quality of the portfolio also improved, as NPLs decreased from $68.6 million at the beginning of the CPS period to $15.3 million at the end of FY16 (or from 3.9 percent to 0.6 percent of the outstanding loan portfolio).
50. Analytical work allowed the WBG to provide knowledge in priority areas supporting a wide range of Turkey’s development challenges. The Bank responded to client demand for partnership in delivering global knowledge and analytical work. The need for further ASA prioritization was identified in the CPSPR and, as a result, programmatic ASA was introduced to keep strategic focus. Given Turkey’s size and progress towards high middle-income status, the development challenges are sophisticated and 9 The share of portfolio IBRD/IDA/RETF projects in “actual” problem status 12 months ago that had a proactivity action in the last 12 months, divided by the total number of problem projects from 12 months ago.
54
require deep, tailored, cross-sectoral analysis. This implies more resources to diagnose the situation and offer policy solutions. Moreover, a more compact, selective, and output-based ASA program determined in consultation with the Government will increase the value of Bank analyses and introduce significant cost benefits. Another challenge faced in ASA was uneven access to data: in some cases, analysis was based on publicly available data only while, in other cases, institutions were either not authorized to share data or did not share it because they believed it to be unreliable.
51. IBRD addressed resource constraints on the knowledge portfolio by mobilizing supplementary external resources. During the CPS period, innovative non-lending activities, including an EU/IPA-funded RAS on Regional Investment Climate Assessment (RICA, FY15), EU/IPA-funded RETF for Energy Sector Technical Assistance (FY15 and FY16), EU-funded TF for Customs Union Evaluation (FY14), and SIDA-funded TA on Women`s Access to Economic Opportunities were introduced to support new business lines. Also, EU/IPA-funding has been secured for a forthcoming transport sector BETF and a Municipal Sector RETF (both currently under preparation). RICA is the first example of a RAS output in Turkey, but because of its peculiar structure, it does not constitute a replicable model for all area and institutions. As a consequence, IBRD has not yet succeeded in developing a full-fledged RAS program in Turkey, though progress is being made to overcome IBRD and government differences over key provisions (related inter alia to official language, sole-sourcing, and dispute resolution). A draft RAS Framework Agreement prepared for the Steering Committee`s review, intended to resolve key provisions, was not able to proceed for approval. It is expected that the Bank will lead efforts to resolve pending legal complexities in the draft PPP RAS agreement. .
52. A Bank-IFC Joint Implementation Plan (JIP) on sustainable cities has not yet fully realized its intended results. On the IFC side, there was good progress in advancing investments in urban infrastructure, but on the Bank side delivery of the Sustainable Cities operation was delayed to end-2016, so the full impact of a joint IBRD-IFC approach has not yet been felt. However, joint energy sector interventions, although not designed through a JIP, have proven to be very satisfactory, suggesting the potential, going forward, for enhanced strategic engagement between IFC and IBRD.
53. Donor coordination was strong. Effective coordination with the EU while introducing BETF, RETF and RAS modalities (through the IPA instrument) represented an important milestone that offers significant potential for the next CPF period. The Syrian refugee work is a key focus of this strengthened partnership. Furthermore, cooperation established with EBRD on Energy Sector TA, AFD on the municipal sector, EIB and AIIB on the TANAP operation, GIZ on the PMR project, and SIDA on the gender agenda represent the new frontiers of Bank Group donor coordination in Turkey.
4. ALIGNMENT WITH CORPORATE GOALS
54. The revised CPS program is closely aligned to the WBG’s goals of supporting poverty reduction and boosting shared prosperity. Although the original CPS was prepared prior to the adoption of the WBG twin goals, its objectives partially focused on enhancing the socio-economic condition of key target groups through the labor market activation of women and youth (as part of Objective 1), as well as early childhood development and the development of the private sector gender equity certification program (as part of Objective 2).
55. The CPS PR provided a succinct analysis of the significant progress made in Turkey from 2003-11 in tackling poverty, principally through increased employment and enhanced private sector
55
earnings. It also identified key remaining challenges associated, for example, with the adequacy of social protection in a context of economic volatility, the rural/urban divide, female participation in the labor force, and inter-generational inequality. The PR noted that these and other issues would merit closer study in the context of the forthcoming SCD and, as such, it committed to undertaking analytical work designed to fill information gaps to validate the alignment of the Bank Group’s activities with the twin goals over the remainder of the CPS.
56. During the CPS Design stage, the Strategic Framework for Mainstreaming Citizen Engagement (CE) in WBG Operations was not in place. However, after adoption, three of five new lending operations during the CPS period were CE-complaint. Among the existing CPS-level CE-linked indicators, “performance improvement efforts and competition underway among local public administrations to receive higher rating based on Citizen Report Card” and “Customer satisfaction rate for Land Registry services improved” were fully met and even surpassed.
5. MAIN LESSONS LEARNT
57. The articulation of a WBG CPS facilitated a coordinated approach at the strategic level. The size of IFC in Turkey is very large relative to other countries so a coordinated WBG approach is naturally more important and tangible. The results achieved under the CPS were better in those areas where IBRD, IFC and MIGA worked in parallel, where results indicators were aligned to their operations, and where there is concentrated engagement in a sector utilizing a range of available lending and non-lending instruments. WBG success in the energy sector is demonstrative of the type of strategically focused, coordinated approach that will be likely to generate further success over the course of the forthcoming CPF.
58. CPS objectives were well aligned with Turkey’s development objectives, but the results framework could have been more robustly framed, and could have presented indicators that demonstrated clearer links between the program and planned outcomes. This is challenging, given the relative scale of the Turkish economy and the difficulties in attribution of the Bank Group’s program to results achieved. Going forward, enhanced efforts will be required more sharply to focus the results framework for Turkey’s new CPF and create clearer understanding of attribution to results of the program.
59. Success requires long-term engagement that has carefully sequenced interventions from different players. For example, the Bank’s knowledge and DPL work set the stage for the enabling environment and overall strategic framework for certain sectors (e.g., energy). This was then followed by a stepped-up IFC engagement with private sector partners in those sectors. Moreover, the Bank’s convening role was clearly effective, given that other financial partners were sometimes able to step into a maturing sectoral framework with support for the public sector, sometimes leaving IBRD out of the actual financing.
60. The IFC program showed the importance of building a longer-term relationship with the private sector. Transforming the Istanbul IFC office from a regional hub into IFC’s first operations center by centralizing senior staff and management in close proximity (including the Regional Vice President, the Regional Industry Directors and Managers and the head of Advisory) helped IFC to respond quickly to market opportunities in Turkey and generate strong investment and development results which paved the way for solid success.
61. Given that IBRD lending involves administrative complexity, does not increase ministerial budgets, and requires the extensive use of non-government (i.e., IBRD) systems, new IPF lending will
56
remain challenging in Turkey. The Government prefers to commit to operations that guarantee smooth implementation in terms of legislative compliance and make use of domestic procurement and financial management systems. Initiating new IPF lending in this environment necessitates a careful assessment and validation of government ownership during the early stages of project preparation. This implies that project preparation often involves considerable time. Overall, these constraints suggest a need for a selective, persistent, and supportive engagement with a view to building trust and demonstrating potential value added in pursuit of desired development outcomes. This also obliges the World Bank Group to understand very well the Turkish context and the client’s own budgetary and public sector management processes and laws.
62. Given the great effort required to develop new IPFs in Turkey, the Bank should focus on sectors where it is already engaged and on projects where expressed client demand is very high (e.g., TANAP). In the second half of the CPS period (FY14-16), IBRD delivered four IPFs, two of which used additional financing. Three other projects, which were planned for the CPS period, were approved with delays, within the six months immediately following the end of the CPS period. All of these deliveries were in sectors where the Bank was already active with an investment operation: The Bank was not able to deliver new IPFs in new sectors with new innovative approaches in the implementation process. While this experience resulted in a more selective lending program, it risks being too selective going forward. If the Bank wants to evolve its program in Turkey to address development priorities, it needs to recognize that there will be a significant up-front cost of engaging – selectively and deliberately – in new sectors through IPF and that the timeframe for delivery will be lengthy and ultimately will involve a high degree of uncertainty. At the same time, it will be important accurately and comprehensively to assess client demand and avoid a trade-off between design innovation and implementation to help reduce up-front costs and future uncertainty. It will also be important for IBRD to articulate to a proposed government partner what additional value IBRD brings when it participates in lending, why higher financing costs may be justified, and how IBRD safeguards may improve development outcomes over the longer term. That said, the Bank will not be able to make a convincing case for IBRD financing in all areas where the Bank would like to contribute to achieving development outcomes in Turkey, and so a concentration on analytical work, policy advice, DPLs and credit lines is likely to persist. The introduction of PforR in the Turkey portfolio to address the IPF procedural complexity may be part of the solution for the new CPF period.
63. The WBG needs more strategically to manage its knowledge and ASA agenda, such that it is demonstrably more demand-driven with proven ownership. The challenges encountered during the CPS as regards access to data and dissemination of reports show that there have been examples where the client was not fully on board with the knowledge work or did not want to commit publicly to World Bank recommendations. This could have been better managed through more carefully defining the scope of the work at the outset, based on strongly-agreed priorities and areas of focus, especially at higher levels of authority within the Government. In the future, the knowledge program could have a more concerted focus, perhaps through delivering fewer more targeted reports (whether they comprise deep-dive diagnostics or just-in-time analysis or policy advice), that are more likely to engage the appropriate level of attention.
64. The lessons learnt from the knowledge work highlight the need for a careful approach to the development of any future RAS business in Turkey. Any possible RAS would have to be explicitly linked to selective, strategic engagement in sectors in which the WBG has a comparative advantage or global knowledge above what Turkey can access directly. Securing any future RAS in Turkey naturally means having a clearer level of ownership that is agreed up-front and that should, in principle, allow for a better partnership on data sharing, diagnostic and dissemination. This requires a deepened understanding of and adaption to Turkey’s public sector processes.
57
CPS
Res
ults
Fra
mew
ork
FY 1
2-16
Pilla
r 1:
Enh
ance
d C
ompe
titiv
enes
s and
Em
ploy
men
t - P
artia
lly A
chie
ved
T
hem
atic
Are
a 1:
Sus
tain
ed m
acro
econ
omic
and
fina
ncia
l sta
bilit
y an
d st
reng
then
ed e
xpor
ts, d
omes
tic sa
ving
s, an
d ex
tern
al r
esili
ence
. – P
artia
lly A
chie
ved
WB
G O
utco
me
Indi
cato
rs:
Prog
ress
to D
ate:
Fi
nanc
ing:
D
PL –
Sus
tain
ing
Shar
ed G
row
th I
(FY
15) P
1463
22
DPL
- C
ompe
titiv
enes
s and
Sav
ings
(CSD
PL) (
FY13
) P12
7787
I
FC lo
ng-te
rm fi
nanc
ing
to in
crea
se c
ompe
titiv
enes
s of p
rivat
e co
mpa
nies
I
FC tr
ade
finan
ce li
nes
MIG
A g
uara
ntee
cov
erin
g Tu
rk E
xim
bank
(FY
15)
Kno
wle
dge:
C
ount
ry E
cono
mic
Mem
oran
dum
on
Hum
an a
nd P
hysi
cal C
apita
l (In
vest
men
ts)
(FY
15) P
1482
05
Tu
rkey
's Tr
ansi
tions
: Int
egra
tion,
Incl
usio
n, In
stitu
tions
/Cou
ntry
Eco
nom
ic
Mem
oran
dum
(FY
15) (
P133
570)
P
ublic
Fin
ance
Rev
iew
(FY
14) P
1306
99
Cou
ntry
Eco
nom
ic M
emor
andu
m o
n Fo
reig
n Tr
ade
(FY
14) P
1293
50
Cus
tom
s U
nion
Eva
luat
ion
(FY
14) P
1442
90 T
F Eu
rope
an C
omm
issio
n:
TA
Reg
ular
Eco
nom
ic U
pdat
e (F
Y14
) P14
6343
T
A F
inan
cial
Lite
racy
(whi
ch is
follo
w-u
p to
Pro
gram
mat
ic C
ount
ry E
cono
mic
M
emor
andu
m o
n Sa
ving
s) (F
Y12
) P12
7354
Out
com
e 1:
Incr
ease
d up
take
of n
ew
volu
ntar
y pe
nsio
n sc
hem
e.
Bas
elin
e: 3
.1 m
il pa
rtici
pant
s in
201
2.
Tar
get:
No
spec
ific
targ
et w
as se
t.
Met
. Num
ber o
f par
ticip
ants
incr
ease
d sig
nific
antly
and
stoo
d at
5.1
mill
ion
at th
e en
d of
201
4. T
his
num
ber r
each
ed 6
.2
mill
ion
in A
pril
2016
. Gov
ernm
ent a
lso
mad
e th
e vo
lunt
ary
pens
ion
sche
me
`mus
t` fo
r the
new
priv
ate
sect
or e
mpl
oyee
s for
th
e fir
st tw
o m
onth
s of t
he d
uty.
At t
he e
nd
of th
e se
cond
mon
th, t
he e
mpl
oyee
can
opt
ou
t fro
m th
e sy
stem
. O
utco
me
2: N
ew in
com
e ta
x la
w re
sults
in
incr
ease
d nu
mbe
r of t
axpa
yers
file
in
com
e ta
x.
Bas
elin
e: 5
23,9
82 in
201
2.
Tar
get:
10%
incr
ease
by
2014
Not
Met
. New
Inco
me
Tax
law
has
not
be
en ra
tifie
d. T
here
fore
, the
re is
no
maj
or
incr
ease
in th
e nu
mbe
r of t
axpa
yers
by
end
2016
.
The
mat
ic A
rea
2: I
mpr
oved
inve
stm
ent a
nd b
usin
ess c
limat
e; d
eepe
ned
and
broa
dene
d ac
cess
to fi
nanc
e; in
crea
sed
empl
oym
ent.
--- P
artia
lly A
chie
ved
WB
G O
utco
me
Indi
cato
rs:
Prog
ress
to D
ate:
IB
RD
Fin
anci
ng:
MSM
E Lo
an to
Hal
kBan
k (F
Y16
) D
PL –
Sus
tain
ing
Shar
ed G
row
th I
(FY
15) P
1463
22
Inn
ovat
ive
Acc
ess t
o Fi
nanc
e Pr
ojec
t (FY
15) P
1471
83 p
lus
TF01
5830
C
ompe
titiv
enes
s and
Sav
ings
DPL
(CSD
PL) (
FY13
) P12
7787
T
hird
Acc
ess t
o Fi
nanc
e fo
r SM
Es (F
Y13
) P13
0864
S
econ
d A
cces
s to
Fina
nce
for S
mal
l and
Med
ium
Ent
erpr
ises P
roje
ct (F
Y10
) P1
1830
8 F
irst A
cces
s to
Fina
nce
for S
mal
l and
Med
ium
Ent
erpr
ises P
roje
ct (F
Y06
) F
ourth
Exp
ort F
inan
ce In
term
edia
tion
Loan
(EFI
L IV
) (FY
08) P
0968
58
Out
com
e 1:
Incr
ease
in n
ew p
aten
t ap
plic
atio
ns.
Bas
elin
e: 5
,600
in 2
013.
Tar
get:
No
spec
ific
targ
et w
as se
t.
Not
Met
. Due
to th
e de
lay
in ra
tific
atio
n of
the
New
Pat
ent L
aw th
e ta
rget
was
not
m
et. N
o ta
rget
s wer
e se
t aga
inst
the
base
lines
pro
vide
d; b
ut b
y en
d -FY
16,
ther
e w
ere
only
5,5
12 n
ew p
aten
t ap
plic
atio
ns (a
gain
st a
201
3 ba
selin
e of
5,
600)
.
Act
ual:
5,51
2 in
201
5. (S
ourc
e: T
PE)
58
Out
com
e 2:
Impl
emen
tatio
n of
in
tegr
ated
com
pany
regu
latio
n sy
stem
(M
ERSI
S) le
adin
g to
incl
usio
n of
all
com
pani
es in
all
of th
e [2
38] r
egist
ries
acro
ss T
urke
y.
Bas
elin
e: 2
04 c
ompa
nies
regi
ster
ed in
20
12.
Tar
get:
No
spec
ific
targ
et w
as se
t.
Not
Ver
ified
. No
info
rmat
ion
avai
labl
e.
Gov
ernm
ent d
oes
not p
ublic
ly d
isclo
se th
e da
ta.
IFC
and
MIG
A F
inan
cing
:
IFC
Inve
stm
ents
in th
e re
al se
ctor
IFC
use
of s
ecur
itiza
tion
stru
ctur
e to
incr
ease
the
dept
h an
d co
mpe
titio
n of
the
Turk
ish b
anki
ng se
ctor
: Inv
este
d in
long
teno
r stru
ctur
ed p
rodu
cts o
f sev
eral
Tu
rkish
ban
ks (c
over
ed b
onds
, gre
en b
onds
, DPR
secu
ritiz
atio
ns).
IFC
also
an
chor
ed E
urob
ond
issua
nces
of i
ts c
lient
s fro
m m
anuf
actu
ring
and
infr
astru
ctur
e se
ctor
s in
Turk
ey.
IF
C lo
ng-te
rm fi
nanc
ing
to th
e ba
nkin
g se
ctor
for o
n-le
ndin
g to
und
erse
rved
se
gmen
ts o
f the
eco
nom
y in
clud
ing
fem
ale
entre
pren
eurs
, MSM
Es a
nd th
e po
orer
re
gion
s
IFC
Sho
rt-te
rm fi
nanc
ing
and
trade
M
IGA
gua
rant
ee c
over
ing
Orf
in F
inan
sman
A.S
. (FY
15)
Kno
wle
dge:
S
avin
gs &
Fin
anci
al S
ecto
r Div
ersi
ficat
ion
(P15
9281
) T
F: S
treng
then
ing
Solv
ency
Sup
ervi
sion
(FY
14) (
P131
766)
C
ount
ry E
cono
mic
Mem
oran
dum
Hum
an a
nd P
hysi
cal C
apita
l (I
nves
tmen
ts)(
FY15
) P14
8205
E
SW T
urke
y’s
Tran
sitio
ns: I
nteg
ratio
n, In
clus
ion,
Inst
itutio
ns/C
ount
ry E
cono
mic
M
emor
andu
m (F
Y15
) P13
3570
T
A P
rivat
e Se
ctor
Dev
elop
men
t (FY
15) P
1464
94
TA
Fin
anci
al In
clus
ion
and
Dee
peni
ng (F
Y15
) P14
6626
E
SW R
efor
m fo
r Com
petit
iven
ess (
FY14
) P12
7856
T
A F
inan
cial
Sec
tor D
evel
opm
ent I
I (FY
14) P
1329
68
TA
Pub
lic-P
rivat
e Pa
rtner
ship
(FY
14) P
1453
52 a
nd P
1481
35 fo
rwar
d-go
ing.
E
SW o
n V
alue
Cha
in T
rade
, Ser
vice
s and
Log
istic
s (pr
ogra
mm
atic
beg
inni
ng
FY15
) E
SW o
n In
nova
tion
and
Bus
ines
s Clim
ate
(pro
gram
mat
ic b
egin
ning
FY
15)
TF:
Tra
de F
inan
ce (P
F015
830)
J
oint
MN
A/E
CA
cro
ss-re
gion
al k
now
ledg
e sh
arin
g in
itiat
ive
on th
e ‘H
ow-to
of
Tech
nolo
gy A
cqui
sitio
n, In
nova
tion
and
Entre
pren
eurs
hip’
P
rogr
amm
atic
Job
s Ser
ies:
1)
Pro
gram
mat
ic J
obs:
Man
agin
g La
bor M
arke
ts th
roug
h th
e B
usin
ess C
ycle
(F
Y12
) P12
3771
2)
Pro
gram
mat
ic J
obs:
Act
ivat
ion
of L
ow S
kille
d Y
outh
and
Wom
en (F
Y14
) P1
3109
9 3)
Pro
gram
mat
ic J
obs:
Cre
atin
g G
ood
Jobs
(FY
15) P
1474
32
Out
com
e 3:
Exp
ort g
row
th in
firm
s be
nefit
ing
from
IBR
D fi
nanc
ing
rela
tive
to se
ctor
exp
ort g
row
th is
gre
ater
than
ze
ro.
Tar
get:
Hig
her t
han
sect
or a
vera
ge
Met
. Exp
ort g
row
th b
y pa
rtici
patin
g fir
ms
rela
tive
to se
ctor
exp
ort g
row
th (m
edia
n)
at th
e cl
osin
g of
EFI
L IV
pro
ject
was
5.9
6 in
201
5.
Out
com
e 4:
Sal
es g
row
th in
SM
Es
bene
fitin
g fr
om IB
RD
fina
ncin
g gr
eate
r th
an z
ero
adju
sted
for i
nfla
tion.
T
arge
t: H
ighe
r tha
n se
ctor
ave
rage
Met
. On
aver
age
sale
s rev
enue
of t
he
SMEs
ben
efitt
ed fr
om IB
RD
SM
E II
cred
it lin
e in
crea
sed
by 4
1.5
perc
ent
Out
com
e 5:
Gro
ss n
on-p
erfo
rmin
g lo
ans (
NPL
) rat
ios f
or fi
nanc
ial
inst
itutio
ns b
enef
iting
from
IBR
D
finan
cing
do
not e
xcee
d th
e av
erag
e fo
r th
e ba
nkin
g se
ctor
(2.7
per
cent
as o
f en
d -20
11, B
RSA
).
Tar
get:
Low
er th
an se
ctor
ave
rage
Part
ially
Met
. 3 o
ut o
f 6 fi
nanc
ial
inst
itutio
ns re
cord
ed lo
wer
than
sect
or
NPL
ave
rage
. Zi
raat
, TSK
B a
nd E
xim
ha
ve b
een
cons
isten
tly u
nder
sect
oral
NPL
ra
tes w
hile
Hal
k, V
akif
and
TKB
hav
e be
en a
bove
sect
oral
ave
rage
.
Out
com
e 6:
IFC
est
imat
es le
vera
ging
th
roug
h lo
cal f
inan
cial
inte
rmed
iarie
s fin
anci
ng to
abo
ut 1
00,0
00 S
ME
clie
nts
and
120,
000
farm
ers.
Met
. Rea
ched
abo
ut 7
59,0
00 S
MEs
tota
l an
d 11
2,18
2 ad
ditio
nal f
arm
ers.
Thes
e in
dica
tors
are
cal
cula
ted
thro
ugh
IFC
`s
inve
stm
ent p
ortfo
lio in
term
edia
ries.
Out
com
e 7:
Incr
ease
in c
orpo
rate
bon
d iss
uanc
e.
Bas
elin
e: T
L 50
.3 b
n (2
013)
. T
arge
t: 5
0 bn
(201
5).
Unm
et. D
ue to
dom
estic
and
glo
bal
unce
rtain
ties
in th
e m
arke
ts is
suan
ces f
ell
dow
n si
gnifi
cant
ly in
the
past
2 y
ears
. TL
44 b
illio
n (2
014)
, TL,
TL
44.5
(201
5)
Out
com
e 8:
Per
cent
age
of w
oman
save
d at
a fi
nanc
ial i
nstit
utio
n in
the
past
yea
r, fe
mal
e (%
age
15+
) B
asel
ine
2 %
(Fin
dex
2011
) T
arge
t: 3
.3%
(Fin
dex
2015
)
Met
. 5.5
% (F
inde
x 20
14 re
leas
ed in
Se
ptem
ber 2
015.
Fin
dex
is a
glob
al s
urve
y an
d is
not c
ondu
cted
ann
ually
but
in 3
-4
year
inte
rval
s).
59
Out
com
e 9:
IFC
’s re
al se
ctor
por
tfolio
co
mpa
nies
will
pro
vide
abo
ut a
dditi
onal
70
,000
jobs
.
Mos
tly M
et. 6
6,36
7 ad
ditio
nal j
obs
crea
ted.
Im
pact
Eva
luat
ion
of IS
KU
R’s
(Tur
kish
Em
ploy
men
t Age
ncy)
Voc
atio
nal T
rain
ing
Prog
ram
s (FY
14) P
1205
14
TA
Pro
gram
mat
ic H
uman
Dev
elop
men
t (FY
13)
P133
668
TA
Pro
gram
mat
ic H
uman
Dev
elop
men
t (FY
12)
P 12
8493
I
FC S
uppo
rt fo
r voc
atio
nal e
duca
tion
The
mat
ic A
rea
3: I
mpr
oved
gov
erna
nce
thro
ugh
enha
nced
tran
spar
ency
to e
nsur
e a
leve
l pla
ying
fiel
d. –
Ful
ly A
chie
ved
WB
G O
utco
me
Indi
cato
rs:
Prog
ress
to D
ate:
Fi
nanc
ing:
D
PL –
Sus
tain
ing
Shar
ed G
row
th I
(FY
15) P
1463
22
TF
GPF
(Gov
erna
nce
Partn
ersh
ip F
acili
ty):
Cap
acity
Bui
ldin
g fo
r the
Par
liam
ent
(FY
09
– FY
14) P
1311
81
TF
IDF
(Ins
titut
iona
l Dev
elop
men
t Fun
d): S
treng
then
ing
Publ
ic In
tern
al A
udit
Func
tion
(P12
8662
) T
F SA
FE (S
treng
then
ing
Acc
ount
abili
ty a
nd F
iduc
iary
Env
ironm
ent):
Enh
anci
ng
the
Supr
eme
Aud
it Fu
nctio
n of
the
Turk
ish C
ourts
of A
ccou
nts (
FY 1
4) P
1285
98
Kno
wle
dge:
S
OE
Cor
pora
te G
over
nanc
e TA
(P15
2468
) E
SW T
urke
y’s
Tran
sitio
ns: I
nteg
ratio
n, In
clus
ion,
Inst
itutio
ns/C
ount
ry E
cono
mic
M
emor
andu
m (F
Y15
) (P1
3357
0)
ESW
Tra
nspo
rt Pu
blic
Exp
endi
ture
Rev
iew
(FY
12) P
1230
74
TA
: Pub
lic F
inan
cial
Man
agem
ent a
nd G
over
nanc
e (F
Y14
) P14
7805
T
A P
rogr
amm
atic
Pub
lic F
inan
cial
Man
agem
ent (
PPFM
) Stu
dy. (
FY13
) P13
0537
. T
A: P
rogr
amm
atic
Gov
erna
nce
(FY
15/1
6)
IFC
Cor
pora
te G
over
nanc
e ad
viso
ry p
roje
ct
IFC
, thr
ough
its
inve
stm
ents
, will
con
tinue
to o
ffer
cor
pora
te g
over
nanc
e ad
vice
to
its c
lient
s T
A J
ustic
e Se
ctor
Per
form
ance
(FY
14) P
1454
80
Out
com
e 1:
Incr
ease
in n
umbe
r of f
irms
with
inde
pend
ent a
udit:
Bas
elin
e: 2
500
in 2
013.
Tar
get:
350
0 in
201
5.
Met
. The
Cou
ncil
of M
inis
ters
dec
isio
n pu
blish
ed in
the
Off
icia
l Gaz
ette
dat
ed 1
9 M
arch
201
6 fu
rther
redu
ced
the
thre
shol
d es
tabl
ishin
g th
e au
ditin
g re
quire
men
ts fo
r co
mpa
nies
. The
num
ber o
f firm
s with
in
depe
nden
t aud
it by
end
201
6 is
expe
cted
to
exc
eed
5,00
0.
Pilla
r 2: I
mpr
oved
Equ
ity a
nd S
ocia
l Ser
vice
s – P
artia
lly A
chie
ved
T
hem
atic
Are
a 4:
Im
prov
ed q
ualit
y an
d eq
uity
of s
ocia
l ser
vice
s - F
ully
Ach
ieve
d
WB
G O
utco
me
Indi
cato
rs:
Prog
ress
to D
ate:
Fi
nanc
ing
in H
ealth
:
60
Out
com
e 1:
Min
istry
of H
ealth
is
reor
gani
zed
and
focu
ses e
xclu
sive
ly o
n th
e he
alth
sect
or’s
stew
ards
hip
func
tions
by
2015
.
Met
. The
re
orga
niza
tion
of
Min
istry
of H
ealth
has
be
en a
chie
ved
thro
ugh
the
Dec
ree
Law
663
da
ted
Nov
embe
r 201
1.
The
seco
ndar
y le
gisl
atio
n ha
s be
en
appr
oved
by
Nov
embe
r 201
2.
Hea
lth S
yste
m S
treng
then
ing
& S
uppo
rt (F
Y16
) P
roje
ct in
Sup
port
of R
estru
ctur
ing
of H
ealth
pre
viou
s na
me:
Hea
lth T
rans
form
atio
n an
d So
cial
Se
curit
y R
efor
m P
roje
ct A
PL 2
(FY
09) P
1021
72
TF
Gov
erna
nce
Partn
ersh
ip F
acili
ty (G
PF):
Hea
lth T
rans
form
atio
n an
d So
cial
Sec
urity
Ref
orm
(FY
09)
Ada
na H
ealth
Pro
ject
(FY
15),
IFC
's fir
st P
PP p
roje
ct in
the
heal
thca
re s
ecto
r and
a fi
rst f
or T
urke
y.
Etli
k H
ealth
PPP
and
Kay
seri
Hea
lth P
PP (F
Y15
, IFC
) – P
PPs t
o bu
ild in
tegr
ated
hea
lth c
ampu
ses.
M
IGA
gua
rant
ee o
f equ
ity in
vest
men
t int
o A
dana
Hea
lth P
PP P
roje
ct (F
Y15
). M
IGA
gua
rant
ee o
f equ
ity in
vest
men
t and
deb
t fin
anci
ng in
to Y
ozga
t Hea
lth P
PP P
roje
ct (F
Y15
). K
now
ledg
e in
Hea
lth:
Im
pact
Eva
luat
ion
HR
BF
Gra
nt H
ealth
(pro
gram
med
FY
15/F
Y16
) P13
0373
T
A P
harm
aceu
tical
s (FY
14) P
1333
09
TA
Sup
port
to S
harin
g Le
sson
s in
Hea
lth S
ecto
r Ref
orm
incl
udin
g po
licy
note
s on
the
polit
ical
ec
onom
y of
hea
lth re
form
, hos
pita
l res
truct
urin
g, a
nd h
ealth
fina
ncin
g. (F
Y14
) P14
4940
E
SW P
erfo
rman
ce-b
ased
con
tract
ing
in F
amily
Med
icin
e (F
Y13
) P12
9248
I
FC’s
inve
stm
ents
to im
prov
e ac
cess
to h
igh-
qual
ity p
rivat
e he
alth
car
e se
rvic
es
Kno
wle
dge
in E
duca
tion:
P
rogr
amm
atic
wor
k lik
ely
cove
ring
scho
ol a
uton
omy
and
finan
cing
is p
lann
ed fo
r FY
15/1
6.
Im
prov
ing
Educ
atio
nal O
utco
mes
(FY
14) P
1320
94
Pro
mot
ing
Exce
llenc
e in
Tur
kish
Sch
ools
(FY
13)
P12
9423
I
mpr
ovin
g th
e Q
ualit
y an
d Eq
uity
of B
asic
Edu
catio
n (F
Y12
) P12
2445
S
choo
l Bas
ed M
anag
emen
t in
Turk
ey (F
Y15
) P14
8207
Out
com
e 2:
All
publ
ic h
ospi
tals
orga
nize
d in
pub
lic h
ospi
tal u
nion
s and
pa
id o
n th
e ba
sis o
f per
form
ance
co
ntra
cts w
ithin
a g
loba
l bud
get.
Met
. The
re
orga
niza
tion
of
Min
istry
of H
ealth
has
be
en a
chie
ved
thro
ugh
the
Dec
ree
Law
663
da
ted
Nov
embe
r 201
1.
The
seco
ndar
y le
gisl
atio
n ha
s be
en
appr
oved
by
Nov
embe
r 201
2.
Out
com
e 3:
Cer
vica
l can
cer s
cree
ning
am
ong
wom
en a
ged
20-6
9 in
crea
sed.
Bas
elin
e: 1
9% in
201
2.
Tar
get:
incr
ease
by
30%
by
2016
Met
. By
June
201
6,
Cer
vica
l can
cer
scre
enin
g ha
s am
ong
wom
en a
ged
20-6
9 in
crea
sed
83.6
%
com
pare
d to
201
2 ba
selin
e.
Act
ual:
82%
The
mat
ic A
rea
5: P
rogr
ess m
ade
tow
ard
gend
er e
qual
ity a
nd in
clus
ive
labo
r m
arke
ts -
Part
ially
Ach
ieve
d W
BG
Out
com
e In
dica
tors
: Pr
ogre
ss to
Dat
e:
Fina
ncin
g:
DPL
– S
usta
inin
g Sh
ared
Gro
wth
I (F
Y15
) I
ncre
asin
g W
omen
’s A
cces
s to
Econ
omic
Opp
ortu
nity
P14
6215
; TF
SID
A
IFC
sup
port
for w
omen
-ow
ned
SMEs
thro
ugh
its p
ortfo
lio b
anks
K
now
ledg
e:
ESW
Pro
gram
mat
ic J
obs:
Act
ivat
ion
of L
ow S
kille
d Y
outh
and
Wom
en (F
Y14
) P1
3109
9 T
A G
ende
r Equ
ity C
ertif
icat
ion
in th
e Pr
ivat
e Se
ctor
(FY
12 P
1294
35 a
nd F
Y13
P
1337
41)
Out
com
e 1:
At l
east
20
com
pani
es
gran
ted
new
Gen
der E
quity
C
ertif
icat
ion
by e
nd o
f 201
5.
Bas
elin
e: Z
ero
in 2
011.
Part
ially
Met
. G
ende
r Equ
ity C
ertif
icat
ion
has
been
re
ceiv
ed b
y 17
firm
s.
Out
com
e 2:
Con
tribu
tion
to in
crea
sed
fem
ale
labo
r for
ce p
artic
ipat
ion
thro
ugh
supp
ort t
o 90
0 w
omen
ow
ned
SMEs
th
roug
h IF
C fi
nanc
ed S
MEs
.
Met
. IFC
reac
hed
2,63
3 w
omen
ow
ned
ente
rpris
es th
roug
h its
SM
E se
ctor
po
rtfol
io.
61
Out
com
e 3:
Impr
oved
acc
ess f
or S
ocia
l A
ssist
ance
ben
efic
iarie
s to
Act
ive
Labo
r M
arke
t Pro
gram
s as
mea
sure
d by
the
num
ber o
f peo
ple
enro
lled
in IS
KU
R
prog
ram
s thr
ough
soci
al so
lidar
ity
foun
datio
ns (s
emi -a
uton
omou
s pub
lic
agen
cies
) B
asel
ine
2012
: 950
0 T
arge
t: 4
0000
by
end
FY15
.
Not
Ver
ified
. ISK
UR
star
ted
regi
ster
ing
SA b
enef
icia
ries
into
the
data
base
but
then
st
oppe
d du
e to
the
qual
ity o
f dat
a.
Ther
efor
e, th
ere
is no
ava
ilabl
e da
ta to
m
easu
re th
e pr
ogre
ss so
far.
Im
pact
Eva
luat
ion
of IS
KU
R’s
(Tur
kish
Em
ploy
men
t Age
ncy)
Voc
atio
nal T
rain
ing
Prog
ram
s (FY
14) P
1205
14
Pilla
r 3:
Dee
pene
d Su
stai
nabl
e D
evel
opm
ent –
Par
tially
Ach
ieve
d
The
mat
ic A
rea
6: I
mpr
oved
sup
ply
of r
elia
ble
and
effic
ient
ene
rgy,
incr
ease
d us
e of
ren
ewab
le e
nerg
y so
urce
s and
clim
ate
actio
ns u
nder
impl
emen
tatio
n - F
ully
A
chie
ved
WB
G O
utco
me
Indi
cato
rs:
Prog
ress
to D
ate:
Fina
ncin
g:
DPL
– S
usta
inin
g Sh
ared
Gro
wth
I (F
Y15
) P14
6322
G
as S
ecto
r Dev
elop
men
t Pro
ject
– A
dditi
onal
Fin
anci
ng (F
Y15
) P13
3565
plu
s CTF
R
enew
able
Ene
rgy
Infr
astru
ctur
e (T
EIA
S) (F
Y14
) P14
4534
S
ME
Ener
gy E
ffic
ienc
y (F
Y13
) P12
2178
and
GEF
con
tribu
tion
P132
189
Priv
ate
Sect
or R
enew
able
Ene
rgy
and
Ener
gy E
ffic
ienc
y Pr
ojec
t – A
dditi
onal
Fi
nanc
ing
(FY
12) P
1125
78
Thi
rd P
rogr
amm
atic
Env
ironm
enta
l Sus
tain
abili
ty a
nd E
nerg
y Se
ctor
(ESE
S) D
PL
(FY
12) P
1216
51
Ene
rgy
Com
mun
ity o
f Sou
th E
ast E
urop
e (E
CSE
E) A
PL6
Proj
ect (
FY11
) P11
0841
P
rivat
e Se
ctor
Ren
ewab
le E
nerg
y an
d En
ergy
Eff
icie
ncy
Proj
ect (
FY09
) P11
2578
E
lect
ricity
Dist
ribut
ion
Reh
abili
tatio
n Pr
ojec
t (FY
07)
Gas
Sec
tor D
evel
opm
ent P
roje
ct (F
Y06
) P09
3765
T
F EU
/IPA
Ene
rgy
Sect
or T
echn
ical
Ass
istan
ce I
(FY
14)
TF
EU/IP
A E
nerg
y Se
ctor
Tec
hnic
al A
ssist
ance
I (F
Y15
) T
F PM
R (P
artn
ersh
ip fo
r Mar
ket R
eadi
ness
): C
arbo
n M
arke
ts In
itiat
ives
(app
rova
l FY
14) P
1261
01
Out
com
e 1:
Impr
oved
sup
ply
of re
liabl
e an
d ef
ficie
nt e
nerg
y by
add
ing
at le
ast
10,0
00 M
W n
ew g
ener
atio
n ca
paci
ty b
y 20
15.
Met
. Gen
erat
ion
capa
city
reac
hed
near
ly
73,0
00 M
W b
e en
d-20
15, w
ith a
n in
crea
se o
f nea
rly 2
4,00
0 M
W s
ince
end
-20
10.
Out
com
e 2:
Ren
ewab
le e
lect
ricity
ge
nera
tion
as a
per
cent
age
of to
tal
gene
ratio
n in
crea
sed
from
19.
7%
(cor
rect
ion
from
18%
) in
2009
to 3
0% o
r m
ore
in 2
015.
Met
. Ele
ctric
ity g
ener
ated
from
re
new
able
ene
rgy
reso
urce
s con
stitu
ted
31.5
per
cent
of t
he to
tal e
nerg
y ge
nera
tion
in 2
015.
Out
com
e 3:
IFC
reac
hing
thro
ugh
its
pow
er g
ener
atio
n/di
strib
utio
n po
rtfol
io
com
pani
es a
bout
7.2
mill
ion
elec
trici
ty
cust
omer
s by
FY
15.
Bas
elin
e: 4
.1 m
illio
n cu
stom
ers
in
FY11
.
Met
. 7.5
mill
ion
Cus
tom
ers r
each
ed
thro
ugh
IFC
`s p
ower
ge
nera
tion/
dist
ribut
ion
portf
olio
.
62
Tar
get:
7.2
mill
ion
in F
Y15
.
TF
CTF
(Cle
an T
echn
olog
y Fu
nd):
Priv
ate
Sect
or R
enew
able
Ene
rgy
and
Ener
gy
Effic
ienc
y Pr
ojec
t (FY
09)
TF
IFC
Geo
Fund
(Geo
ther
mal
Ene
rgy
Dev
elop
men
t Pro
gram
): Te
chni
cal
Ass
istan
ce (F
Y11
) I
FC S
usta
inab
le E
nerg
y fin
anci
ng
IFC
fina
ncin
g fo
r ren
ewab
le e
nerg
y pr
ojec
ts (g
eoth
erm
al, h
ydro
and
win
d po
wer
) I
FC fi
nanc
ing
for p
ower
dist
ribut
ion
com
pani
es
IFC
fina
ncin
g en
ergy
eff
icie
ncy
proj
ects
K
now
ledg
e:
Tur
key`
s Ene
rgy
Tran
sitio
n –
Mile
ston
es a
nd C
halle
nges
(FY
16) P
1496
38
Ene
rgy
Ref
orm
Mile
ston
es a
nd C
halle
nges
(FY
15) P
1496
38
TA
Ene
rgy
Effic
ienc
y In
stitu
tions
(FY
15) P
1465
01
TA
Soc
ial M
onito
ring
in E
nerg
y Se
ctor
(FY
15) P
1474
96
TA
on
Elec
trici
ty M
arke
t (FY
12) P
1145
34
TF
Faci
litat
ing
Ener
gy E
ffic
ienc
y (E
SMA
P) (F
Y12
) P13
0578
Out
com
e 4:
Cum
ulat
ive
ener
gy sa
ving
s of
4,3
72 G
Wh
or 1
.5%
of 2
013t
otal
an
nual
dem
and
by 2
016
to b
e ac
hiev
ed
thro
ugh
SME
EE a
nd R
E cr
edit
lines
.
Part
ially
Met
. Cum
ulat
ive
ener
gy
savi
ngs f
rom
PSR
EEE
and
SME
EE
Proj
ects
reac
hed
3772
GW
h by
Jun
e 20
16.
Out
com
e 5:
Incr
easi
ng g
as st
orag
e is
criti
cal f
or T
urke
y's e
nerg
y se
curit
y.
Bas
elin
e: 2
.6 b
cm in
201
3 T
arge
t: 1
9% in
crea
se b
y 20
16 a
nd 3
8%
incr
ease
by
2020
with
the
com
plet
ion
of
phas
e 1
and
phas
e 2
of th
e Tu
z G
olu
gas
stor
age
proj
ect,
resp
ectiv
ely.
Part
ially
Met
. Gas
Sec
tor D
evel
opm
ent
Proj
ect i
s on
track
, and
thes
e in
dica
tors
ar
e ex
pect
ed to
be
achi
eved
tim
ely.
The
mat
ic A
rea
7: S
tren
gthe
ned
envi
ronm
enta
l man
agem
ent a
nd a
dapt
atio
n to
clim
ate
chan
ge –
Par
tially
Ach
ieve
d.
WB
G O
utco
me
Indi
cato
rs:
Prog
ress
to D
ate:
Fi
nanc
ing:
D
PL -
Third
Pro
gram
mat
ic E
nviro
nmen
tal S
usta
inab
ility
and
Ene
rgy
Sect
or (E
SES)
(F
Y12
) P12
1651
A
nato
lia W
ater
shed
Reh
abili
tatio
n Pr
ojec
t plu
s G
EF P
roje
ct (F
Y04
) T
F G
EF3
Full-
Size
d Pr
ojec
t: Tu
rkey
Ana
tolia
Wat
ersh
ed R
ehab
ilita
tion
Proj
ect
(FY
05)
Kno
wle
dge:
S
usta
inab
le U
rban
WSS
(FY
16) P
1501
12
ESW
Rio
+20/
Cle
aner
Pro
duct
ion
(FY
12) P
1276
75
TA
Foo
d Sa
fety
Pro
gram
mat
ic T
A (F
Y14
) P14
5557
T
A W
ater
Dia
logu
e (F
Y15
) P14
6361
T
A N
atio
nal W
ater
shed
Man
agem
ent (
FY12
) P12
9244
D
iagn
ostic
of N
atur
al C
apita
l Sav
ing
and
Sust
aina
ble
Gro
wth
(FY
15) P
1496
86
Env
ironm
enta
l and
Nat
ural
Res
ourc
e M
anag
emen
t Pro
gram
mat
ic T
A (F
Y15
/FY
16)
Out
com
e 1:
Impr
oved
Wat
er B
asin
M
anag
emen
t: Pr
otec
tion
actio
n pl
ans
prep
ared
for T
urke
y’s 2
5 riv
er b
asin
s, ta
king
into
acc
ount
prin
cipl
es o
f the
W
ater
Fra
mew
ork
Dire
ctiv
e.
Bas
elin
e: 4
in 2
009;
T
arge
t: a
t lea
st 2
0 by
end
-201
2.
Met
. Ach
ieve
d th
roug
h po
licy
supp
ort
unde
r the
ESE
S D
PL.
Out
com
e 2:
Com
plet
ion
of d
raft
Inte
grat
ed W
ater
Bas
in M
anag
emen
t pl
an a
nd e
stab
lishm
ent o
f Bas
in
Com
miss
ion
in se
lect
ed p
ilot b
asin
.
Met
. Dra
ft In
tegr
ated
Bas
in M
anag
emen
t Pl
an fo
r Buy
uk M
ende
res
basi
n an
d es
tabl
ishm
ent o
f bas
in c
omm
issio
ns in
all
25 b
asin
s with
a M
oFW
A c
ircul
ar d
ated
M
ay 2
5, 2
015.
63
Out
com
e 3:
Est
ablis
hmen
t of N
atur
al
Cap
ital A
ccou
nts
in tw
o se
lect
ed w
ater
ba
sins
.
Unm
et. V
alua
tion
of n
atur
al re
sour
ces
befo
re e
stab
lishi
ng n
atur
al c
apita
l ac
coun
ts p
riorit
ized
. The
refo
re, t
he W
BG
fo
cus w
as g
iven
to v
alua
tion
met
hodo
logy
. Tw
o re
ports
on
valu
atio
n m
etho
dolo
gy a
nd c
ase
stud
ies
in th
e fo
rest
and
wat
er se
ctor
s wer
e pr
epar
ed
and
shar
ed w
ith th
e go
vern
men
t.
The
mat
ic A
rea
8: I
mpr
oved
sus
tain
abili
ty o
f Tur
kish
citi
es. –
Par
tially
Ach
ieve
d W
BG
Out
com
e In
dica
tors
: Pr
ogre
ss to
Dat
e:
Fina
ncin
g:
Lan
d R
egist
ratio
n an
d C
adas
ter M
oder
niza
tion
Proj
ect A
F (F
Y15
) P10
6284
M
unic
ipal
Ser
vice
s Pro
ject
(FY
05) p
lus
Add
ition
al F
inan
cing
(F
Y10
) P08
1880
I
stan
bul S
eism
ic R
isk M
itiga
tion
and
Emer
genc
y Pr
epar
edne
ss P
roje
ct (F
Y05
) plu
s A
dditi
onal
Fin
anci
ng
(FY
10) P
0783
59
IFC
Mun
icip
al F
inan
ce to
impr
ove
mun
icip
al in
fras
truct
ure
I
FC In
vest
men
ts in
tran
spor
t log
istic
s M
IGA
cre
dit e
nhan
cem
ent o
f thr
ee n
on-s
hare
hold
er lo
ans
- pa
ralle
l to
IFC
- to
Met
ropo
litan
Mun
icip
ality
of I
zmir
for
acqu
isiti
on o
f new
ferr
y bo
ats,
cons
truct
ion
of e
lect
rifie
d tra
mw
ay, a
nd a
cqui
sitio
n of
met
ro tr
ains
(FY
13, F
Y14
, FY
15).
MIG
A c
redi
t enh
ance
men
t of n
on-s
hare
hold
er lo
an to
Is
tanb
ul U
lasi
m A
.S. f
or U
skud
ar-U
mra
niye
-Cek
mek
oy
met
ro c
omm
uter
line
(FY
15)
Kno
wle
dge:
Reg
iona
l Dev
elop
men
t and
Vul
nera
bilit
y Pr
ogra
mm
atic
TA
(F
Y16
) P15
1079
T
urke
y C
redi
twor
thin
ess
Aca
dem
y (F
Y16
) P15
9176
I
BR
D-I
FC S
usta
inab
le C
ities
JIP
(FY
16) P
1561
61
Out
com
e 1:
An
addi
tiona
l 420
,000
peo
ple
in fo
ur c
ities
un
der t
he M
unic
ipal
Ser
vice
s Pro
ject
hav
e ga
ined
acc
ess
to e
nhan
ced
urba
n se
rvic
es, e
.g.,
wat
er s
uppl
y,
sew
erag
e, a
nd so
lid w
aste
man
agem
ent.
Met
. Mun
icip
al S
ervi
ces p
roje
ct c
ontin
ued
its
satis
fact
ory
impl
emen
tatio
n th
roug
hout
the
CPS
. Pr
ojec
t inv
estm
ents
hel
ped
to s
urpa
ss th
e ta
rget
w
ith o
ver 2
.5 m
illio
n pe
ople
.
Out
com
e 2:
Mun
icip
al g
over
nanc
e: P
erfo
rman
ce
impr
ovem
ent e
ffor
ts a
nd c
ompe
titio
n un
derw
ay a
mon
g lo
cal p
ublic
adm
inis
tratio
ns to
rece
ive
high
er ra
ting
base
d on
Citi
zen
Rep
ort C
ard.
B
asel
ine:
1 p
ilot m
unic
ipal
ity (M
anis
a). T
arge
t: 6
mun
icip
aliti
es
Met
Per
form
ance
impr
ovem
ent e
ffor
ts a
nd
com
petit
ion
amon
g lo
cal p
ublic
adm
inis
tratio
ns
thro
ugh
mea
surin
g th
e C
itize
n R
epor
t Car
d ha
ve
been
diss
emin
ated
into
6 m
unic
ipal
ities
by
Turk
ish lo
cal g
over
nmen
ts in
Man
isa,
Tra
bzon
, A
ntal
ya, I
stan
bul,
Ada
na, a
nd M
alat
ya.
Out
com
e 3:
New
Ista
nbul
Kar
diko
y-K
arta
l Met
ro
com
mut
er li
ne. A
dditi
onal
419
,000
peo
ple
bene
fit fr
om
impr
oved
serv
ices
by
2016
. B
asel
ine:
150
,000
peo
ple
in 2
013.
Part
ially
Met
. The
pro
ject
is p
rogr
essi
ng.
Ave
rage
wee
kday
ride
rshi
p re
ache
d to
277
,000
pe
ople
(firs
t hal
f of 2
016)
.
64
Out
com
e 4:
Tw
o ne
w Iz
mir
elec
trifie
d tra
mw
ay li
nes
and
impr
oved
traf
fic m
anag
emen
t.
Part
ially
Met
. Con
stru
ctio
n on
trac
k to
be
com
plet
ed b
y 20
17; a
dditi
onal
240
,000
peo
ple
will
hav
e ac
cess
. [N
ote:
mea
sura
ble
impa
ct fa
lls
outs
ide
of C
PS p
erio
d] E
xpec
ted
to b
e op
erat
iona
l in
2018
.
TF
GFD
RR
(Glo
bal F
acili
ty fo
r Disa
ster
Red
uctio
n an
d R
ecov
ery)
: Disa
ster
Miti
gatio
n an
d Pr
epar
edne
ss (F
Y09
) T
F PP
IAF
(Pub
lic-P
rivat
e In
fras
truct
ure
Adv
isory
Fac
ility
): Su
stai
nabl
e C
ities
(Mun
icip
al C
redi
t Rat
ings
Tra
nsac
tion
Stru
ctur
ing)
(FY
15) P
1333
45
ESW
Tur
key’
s Tr
ansi
tions
: Int
egra
tion,
Incl
usio
n,
Inst
itutio
ns/C
ount
ry E
cono
mic
Mem
oran
dum
(FY
15)
(P13
3570
) E
SW U
rban
izat
ion
Rev
iew
(FY
15) P
1286
06
Env
ironm
enta
l and
Nat
ural
Res
ourc
e M
anag
emen
t Pr
ogra
mm
atic
TA
.
Out
com
e 5:
Disc
harg
e of
unt
reat
ed w
aste
wat
er
redu
ctio
n in
to th
e A
egea
n Se
a th
roug
h ex
pans
ion
of th
e IF
C fi
nanc
ed Iz
mir
Was
te W
ater
Tre
atm
ent P
lant
.
Bas
elin
e: 6
05,0
00m
3 /d
ay tr
eate
d in
201
2 T
arge
t: 8
21,0
00m
3/da
y tre
ated
by
2016
Part
ially
Met
. No
repo
rtabl
e re
sults
yet
: the
re
was
a d
elay
in c
onst
ruct
ion
due
to Iz
mir
Mun
i ch
angi
ng c
ontra
ctor
s, ho
wev
er th
e pr
ojec
t is o
n tra
ck to
be
oper
atio
nal b
y en
d -20
16.
Out
com
e 6:
A to
tal o
f 806
pub
lic b
uild
ings
in th
e Is
tanb
ul P
rovi
nce
retro
fitte
d/re
cons
truct
ed to
resi
st a
m
ajor
ear
thqu
ake
com
pare
d to
201
4 ta
rget
of 7
63
build
ings
.
Met
. ISM
EP p
roje
cts h
as b
een
com
pete
d hi
ghly
sa
tisfa
ctor
ily b
y re
achi
ng 8
06 p
ublic
bui
ldin
gs
retro
f itte
d/re
cons
truct
ed.
Out
com
e 7:
Cus
tom
er sa
tisfa
ctio
n ra
te fo
r Lan
d R
egist
ry se
rvic
es im
prov
ed.
Bas
elin
e: 4
0% in
200
8. T
arge
t: 8
5% b
y en
d-20
15.
Met
. Lan
d R
egist
ry a
nd C
adas
ter p
rogr
esse
s sa
tisfa
ctor
ily a
nd c
usto
mer
satis
fact
ion
rate
hav
e re
ache
d 90
% a
s of D
ecem
ber 2
015.
65
Table 1: CPS Period IBRD Lending Approvals
CPS FY12-16 Planned IBRD US$ (M) CPS FY12-16 Actual IBRD US$ (M)
Development Policy Lending: Development Policy Lending:
Third Programmatic Environmental Sustainability and Energy Sector DPL
600 Third Programmatic Environmental Sustainability and Energy Sector DPL
600
Investment Project Financing: Investment Project Financing:
Private Sector Renewable Energy and Energy Efficiency Additional Financing
500 Private Sector Renewable Energy and Energy Efficiency Additional Financing
500
Sub-total 1,100 Sub-total 1,100
Development Policy Lending: Development Policy Lending:
Programmatic DPL Growth, Competitiveness and Employment
600 Competitiveness and Savings DPL 800
Investment Project Financing: Investment Project Financing:
Private Sector Energy Efficiency 200 SME Energy Efficiency 201SME Access to Finance (Food Safety) 200 SME Access to Finance III 300Project on Health 200Allocation to be decided 100
Sub-total 1,300 Sub-total 1,301
Development Policy Lending: Development Policy Lending:
Development Policy Loan - tbd 350 (moved to FY15)Investment Project Financing: Investment Project Financing:
Areas of Access to Finance: SME or exporters Renewable Energy Integration 300Areas of Education / EmploymentAreas of Sustainable Cities / Disaster / Watershed / Energy
Sub-total 1,050 Sub-total 300
Sub-total FY12-14 2,701
Development Policy Lending: Development Policy Lending:
Sustaining Shared Growth DPL- 1 500 Sustaining Shared Growth DPL- 1 500Investment Project Financing: Investment Project Financing:
Gas Sector Development (BOTAS) Additional Financing
400 Gas Sector Development (BOTAS) Additional Financing
400
Innovative Access to Finance 250 Innovative Access to Finance 250Water Basin Management and Rehabilitation 50Geothermal Energy Development (plus CTF) 300Sustainable Cities 300Long Term Finance Gurantee - $300 m (tbd)
Sub-total 1,800 Sub-total 1,150
Development Policy Lending:
Sustaining Shared Growth DPL-2 500 (moved to FY17)Investment Project Financing:
National Disaster Risk Mitigation 300Health 100 Health System Strengthening & Support 134
Financial Sector Operation 300 MicroSmall&Medium Enterprise and Large Enterprise Supply Chain Finance
200
Land Registration and Cadastre Modernization Project Additional Financing
91
Sub-total 1,200 Sub-total 425
Total Planned 6,450 Total Actual (as of June 2016) 4,276
FY16
FY12
FY14
700
FY14
FY13 FY13
FY12
FY15
FY16
FY15
66
Table 2: CPS Period IFC Long Term Commitments (FY12-16)
FY Industry Project ID and Name Project count
Original Commitment Activity - IFC Own Account
Original Commitment Activity - B
Loan
Original Commitmen
t Activity Other
Mobilization
Total
2012
FM Industry Group
29413-Abank Sub Loan 0 27 27 31531-Finansbank RI II 1 3 0 3 31114-Fibabanka Women 1 30 0 19 49 31113-ABank-Women 1 25 0 15 40 31112-TSKB Sustainable 1 75 0 75 31085-YKB DPR 1 75 0 70 145 30579-Seker Bond 1 25 0 25
MAS Industry Group
32197-UHG RightsIss II 1 6 0 6 31929-UHG RightsIssue 1 1 0 1 31474-MNT 1 30 0 30 28467-Tiryaki 1 30 0 30
2013
CTT Industry Group
32659-Earlybird 1 25 0 25 31623-Mediterra CP 1 20 0 20
FM Industry Group
33154-Deniz Covered B. 1 70 0 70 33143-TSKB Pol. Abatem 1 75 0 75 32241-Is Leasing EE/RE 1 35 0 35 31274-Finansbank DPR 1 75 0 75
Infra Industry Group
32902-Asyaport 1 75 0 75 32503-Farcan ACWA 1 125 0 125 32078-Izsu Wastewater 1 36 0 36 31733-Izmir Muni 1 59 0 59
MAS Industry Group
33711-Sisecam Bond 1 40 0 40 32583-Plato 1 6 0 6 32420-Sanko Tekstil 1 25 0 25 32285-CPLF-ModernKarto 1 8 0 8 32026-OzU 1 43 0 43 31983-Superfilm 1 45 0 45 31836-KKagit 1 50 0 50
2014
CTT Industry Group
33645-Logo 1 13 0 13
FM Industry Group
35153-Seker RI 1 1 4 0 4 33922-Seker Sub 1 50 0 50 32915-Odea Bank SME 1 50 0 50 32669-Fiba Sub Loan 1 40 0 40
Infra Industry Group
34457-Transatlantic 1 40 0 40 34306-Izmir Tramway 1 76 0 76 33943-Mersin Port 1 75 0 75 32036-Viking Services 1 50 0 50
MAS Industry Group
34764-Cimko II-B Loan 0 0 3 3 34448-Recordati Ilac 1 34 0 34 34061-Tiryaki II 1 30 0 30 34009-OzU II 1 25 0 25 33995-Elif Turkey 1 10 0 10 33753-Cimko Cement II 1 40 25 65 33528-Astra Dorms 1 10 0 10 32940-Chipita Turkey 1 15 0 15
2015 CTT Industry Group
36641-Mercury 1 15 0 15 36631-ATF I 1 40 0 40 35939-Zenium 1 25 0 25
67
35828-Iyzico 1 3 0 3
FM Industry Group
36788-Sekerbank RI 2 1 1 0 1 36341-Sekerbank swap 1 1 0 1 36153-FinansL EE II 1 40 0 20 60 36017-Seker Bond Swap 1 17 0 17 35827-Odeabank GrMortg 1 45 0 22 67 34488-Abank EE 1 50 0 45 95 33950-YKL Sustainable 1 64 0 32 96
Infra Industry Group
36080-Izsu Sewerage 1 12 0 12 35395-ACWA Kirikkale 0 0 45 45 35012-Izmir Railcars 1 25 0 25 34552-HKA 0.5 31 0 17 48 34552-HKA 0.5 31 0 17 48 32258-Gama Enerji 1 165 0 38 203
MAS Industry Group
36337-Adana Swap 1 4 0 4 36320-Adana B Loan 0 0 62 62 34669-Soda Sanayii 1 25 0 25 34358-Adana Health 1 44 0 108 151 33995-Elif Turkey 1 10 0 10 33677-Etlik Health 1 82 87 169 31029-Kayseri Health 1 38 0 38
2016
CTT Industry Group
37661-Revo Capital 1 8 0 8 34636-Taxim Capital 1 20 0 20
FM Industry Group
37925-Odeabank Equity 1 75 0 39 114 37112-DCM Finansb DPR2
1 100 0 100
37063-DCM TSKB Climate
1 75 0 75
36318-Seker MSME 1 50 0 25 75 36167-Fibabanka Equity 1 40 0 40 35128-Burgan Turkey 1 40 0 20 60 35827-Odeabank GrMortg 0 0 0 25 25
Infra Industry Group
38655-Karaca Swap 1 3 0 3 37872-Karaca Hydro 1 44 0 22 66 37093-MMI Metro Line 1 65 54 120 36827-HKA Hedge 1 5 0 5 36772-Akfen Energy 1 100 0 100 36711-AkCez II 1 106 58 163 36326-UNIT Equity 1 143 0 143 34552-HKA 0.5 4 0 23 27
MAS Industry Group
37310-Etlik Swap 1 3 0 3 36747-RHOL Equity 1 215 0 215 35338-Trakya Cam VIII 1 40 15 20 75 34552-HKA 0.5 4 0 23 27 31029-Kayseri Health 1 2 0 2
TOTAL FY12-16 3,579 348 624 4,552
68
Table 3: CPS Period IBRD Non-Lending Deliveries
Fiscal Year Product Line Project Name
FY12
CP Turkey CPS FY12-15 EV Turkey CASCR Review EW Third Programmatic Public Expenditure Review and PFM Study EW RIO+20 GREEN GROWTH POLICY PAPER EW Turkey: Managing labor markets through the economic cycle TA CAPACITY BUILDING FOR ELECTRICITY MARKET OPERATIONS TA Financial Literacy Task TA TR Promoting Gender Equity TA HD TA TI Turkey CT Workshop FY12
FY13
EW Education Study EW Family Medicine Study TA TR FSD TA (FSA follow-up, Capital Market Development) TA NATIONAL WATERSHED MANAGEMENT TA Programmatic Public Financial Management Study
FY14
EW Programmatic Jobs--Activation EW Turkey CEM: Trading up to High Income EW Improving Educational Outcomes in Turkey EW Turkey PPER EW Turkey Regular Economic Report EW Turkey Customs Union IE Impact Evaluation of ISKUR Vocational Training Programs KP Corporate Risk Monitoring TA Programmatic Food Safety TA-3 TA Reform for Competitiveness TA Turkish Court of Accounts Strengthening Project TA TA Pharmaceuticals Study TA Turkey Public-Private Partnership TA Turkey Green Growth Follow-up TA TA TR - Second Financial Sector Development Technical Assistance TA Capacity Building for the Parliament and Parliamentary Budge TA Justice Sector Performance Measurement TA Support to Global Conference on Universal Coverage in Turkey TA Poverty Measurement and Monitoring TA TE Workshop on Procurement and FM (P148513) TA Turkey: Promoting Gender Equity in Labor Market and Entrepreneurship
FY15
CP CPS PROGRESS REPORT EW School Based Management in Turkey EW Turkey Lessons Flagship EW TURKEY URBANIZATION REVIEW KP Social Compact in Electricity Privatization in Southeastern TA Programmatic Public Financial Management Study TA Turkey Water Dialogue TA TA Diagnostic Analysis of Natural Capital Saving and Sustainability TA Turkey #10269 Strengthening Solvency Supervision TA Private Sector Development TA TA Institutional Review of Energy Efficiency in Turkey TA Financial Inclusion and Financial Deepening TA Monitoring the Social Impacts of Electricity Privatization i TA Sustainable Cities Action Plan
69
FY16
EW Turkey's Energy Transition - Milestones and Challenges EW Defining the Bank's support to the Transport Sector in Turkey EW Policy Note Response to Refugee Crisis EW Regional Poverty Dynamics EW Fiscal Horizontal Disparities EW Regional Labor Market Dynamics EW Sustainable Urban Water Supply and Sanitation in Turkey IE IE of Refugees on Labor Markets KP Turkey Country Team Workshop 2016 PA Turkey Programmatic Jobs-Activation AAA PA Regional Development and Vulnerability PA Business Environment and Innovation Programmatic TA TA IBRD-IFC Joint Implementation Program for Sustainable Cities TA Savings & Fin. Sector Diversification TA SOE Corporate Governance Technical Assistance TA Turkey Creditworthiness Academy TA Turkey PPP FY15
70
Annex 3. Selected Indicators of Bank Portfolio Performance and Management As of July 29, 2017
Indicator FY14 FY15 FY16 FY17
Portfolio Assessment
Number of Projects Under Implementation ᵃ 12.0 11.0 10.0 12.0
Average Implementation Period (years) ᵇ 5.1 5.7 5.2 3.7
Percent of Problem Projects by Number ᵃ˒ 8.3 0.0 0.0 25.0
Percent of Problem Projects by Amount ᵃ˒ 4.0 0.0 0.0 13.2
Percent of Projects at Risk by Number ᵃ˒ 16.7 0.0 0.0 25.0
Percent of Projects at Risk by Amount ᵃ˒ 14.0 0.0 0.0 13.2
Disbursement Ratio (%) 20.3 35.8 34.5 37.3
Memorandum Item Since FY80 Last Five FYs
Proj Eval by OED by Number 149 7
Proj Eval by OED by Amt (US$ millions) 27,627.7 3,167.2
% of OED Projects Rated U or HU by Number 26.0 28.6
% of OED Projects Rated U or HU by Amt 16.4 6.7
a. As shown in the Annual Report on Portfolio Performance (except for current FY).
b. Average age of projects in the Bank's country portfolio.
c. Percent of projects rated U or HU on development objectives (DO) and/or implementation progress (IP).
d. As defined under the Portfolio Improvement Program. e. Ratio of disbursements during the year to the undisbursed balance of the Bank's portfolio at the beginning of the year: Investment projects only. * All indicators are for projects active in the Portfolio, with the exception of Disbursement Ratio, which includes all active projects as well as projects which exited during the fiscal year.
71
Ann
ex 4
. Ope
ratio
ns P
ortf
olio
(IB
RD
/ID
A a
nd G
rant
s)
as o
f Jul
y 29
, 201
7
Clo
sed
Proj
ects
18
8
IB
RD
/IDA
*
To
tal D
isbur
sed
(Act
ive)
1,
597.
46
of w
hich
has
bee
n re
paid
24
3.68
Tota
l Disb
urse
d (C
lose
d)
17,3
14.1
6
o
f whi
ch h
as b
een
repa
id
10,7
64.8
9
Tota
l Disb
urse
d (A
ctiv
e +
Clos
ed)
18,9
11.6
2
o
f whi
ch h
as b
een
repa
id
11,0
08.5
7
Tota
l Und
isbur
sed
(Act
ive)
1,
508.
34
To
tal U
ndisb
urse
d (C
lose
d)
0.00
Tota
l Und
isbur
sed
(Act
ive
+ Cl
osed
) 15
08.3
4
Act
ive
Proj
ects
D
iffer
ence
B
etw
een
Expe
cted
and
A
ctua
l
La
st P
SR
Supe
rvisi
on R
atin
g
Ori
gina
l Am
ount
in U
S$ M
illio
ns
D
isbur
sem
ents
Proj
ect I
D
Proj
ect N
ame
Dev
elop
men
t O
bjec
tives
Im
plem
enta
tion
Prog
ress
Fi
scal
Y
ear
IBR
D
IDA
G
rant
s C
ance
l. U
ndisb
. O
rig.
Fr
m
Rev
'd
P093
765
GA
S SE
CT D
EVT
S M
S 20
06
725.
0 0.
0
0.0
110.
3 -2
89.7
-2
89.0
P1
5279
9 H
ealth
Sys
tem
Stre
ngth
enin
g &
Sup
port
MS
MS
2016
13
4.3
0.0
0.
0 12
1.3
53.7
0.
0 P1
4718
3 In
nova
tive
Acc
ess t
o Fi
nanc
e S
S 20
15
250.
0 0.
0
0.0
45.6
0.
0 0.
0 P1
0628
4 La
nd R
egis
& C
adas
tre M
oder
niza
tion
Proj
M
S M
S 20
08
293.
6 0.
0
15.0
78
.4
26.9
7.
9 P1
5625
2 Lo
ng T
erm
Exp
ort F
inan
ce
S S
2017
30
0.0
0.0
0.
0 24
9.3
-20.
8 0.
0 P1
5769
1 M
SME
& L
ESCF
Pro
ject
M
U
MU
20
16
200.
0 0.
0
0.0
149.
0 0.
0 0.
0 P1
4453
4 R
enew
able
Ene
rgy
Inte
grat
ion
S S
2014
30
0.0
0.0
0.
0 18
6.6
238.
7 66
.7
P128
605
Susta
inab
le C
ities
S
S 20
17
132.
8 0.
0
0.0
132.
4 1.
8 0.
0 P1
3086
4 TR
SM
E II
I M
S M
S 20
13
300.
0 0.
0
0.0
107.
6 0.
0 20
.6
P151
739
Turk
ey G
eoth
erm
al D
evel
opm
ent P
roje
ct
S M
S 20
17
250.
0 0.
0
0.0
219.
4 -3
0.4
0.0
P122
178
Turk
ey S
ME
Ener
gy E
ffici
ency
Pro
ject
GEF
M
S M
U
2013
20
1.0
0.0
0.
0 10
5.9
0.0
61.7
P1
3218
9 Tu
rkey
SM
E En
ergy
Effi
cien
cy P
roje
ct G
EF
MS
MU
20
13
0.0
0.0
3.6
0.0
2.4
0.0
0.0
Ove
rall
Res
ult
3,
086.
7 0.
0 3.
6 15
.0
1,50
8.3
-19.
7 -1
32.8
*
Disb
urse
men
t dat
a is
upda
ted
at th
e en
d of
the
first
wee
k of
the
mon
th.
a. In
tend
ed d
isbu
rsem
ents
to d
ate
min
us a
ctua
l disb
urse
men
ts to
dat
e as
pro
ject
ed a
t app
raisa
l.
72
Ann
ex 5
. Sta
tem
ent o
f IFC
’s H
eld
and
Dis
burs
ed P
ortfo
lio
as o
f Jul
y 29
, 201
7
(In U
SD M
illio
ns)
Com
mitt
ed
Dis
burs
ed O
utst
andi
ng
Com
mitm
ent
Inst
itutio
n Lo
an
Equi
ty
Qua
si-Eq
uity
G
T
Risk
M
ngt
IFC
TO
TAL
Pa
rtic
ipan
t Lo
an
Equi
ty
Qua
si-Eq
uity
G
T
Risk
M
ngt
IFC
TO
TAL
Pa
rtic
ipan
t Fi
scal
Yea
r Sh
ort N
ame
2015
A
CW
A G
uc
125.
00
0 0
0 0
125.
00
45.0
0 11
8.33
0
0 0
0 11
8.33
42
.60
2016
A
KCE
Z 97
.29
0 0
0 0
97.2
9 54
.78
65.7
6 0
0 0
0 65
.76
50.5
6 20
15
Abr
aaj T
urke
y I
0 39
.98
0 0
0 39
.98
0 0
13.8
1 0
0 0
13.8
1 0.
00
2015
A
dana
Hea
lth
39.9
1 0
0 0
4.88
44
.79
57.0
1 35
.71
0 0
0 4.
88
40.5
9 51
.02
2010
/ 201
7/ 2
011/
200
3/
2004
A
kban
k TK
25
0.00
0
0 0
0 25
0.00
0
250.
00
0 0
0 0
250.
00
0.00
2016
A
kfen
Ene
rgy
0 10
0.00
0
0 0
100.
00
0 0
49.9
6 0
0 0
49.9
6 0.
00
1999
/ 201
4/ 2
017/
201
1/
2015
/ 201
6/ 2
012
Alte
rnat
ifban
k 95
.45
0 0
79.7
8 0
175.
23
0 95
.45
0 0
79.7
8 0
175.
23
0.00
2009
/ 201
0/ 2
017
Ass
an A
lum
inyu
m
55.0
0 0
0 0
0 55
.00
0 55
.00
0 0
0 0
55.0
0 0.
00
2014
A
stra
Dor
ms
0 7.
50
0 0
0 7.
50
0 0
7.50
0
0 0
7.50
0.
00
2013
/ 201
4 A
syap
ort
50.3
2 0
0 0
0 50
.32
0 50
.32
0 0
0 0
50.3
2 0.
00
2017
/ 201
6 Bu
rgan
Tur
key
40.0
0 0
0 4.
02
0 44
.02
0 40
.00
0 0
4.02
0
44.0
2 0.
00
2011
D
eniz
Bank
AS
11.4
0 0
0 0
0 11
.40
0 11
.40
0 0
0 0
11.4
0 0.
00
2014
EA
S So
lutio
ns
0 1.
68
0 0
0 1.
68
0 0
1.68
0
0 0
1.68
0.
00
2013
Ea
rlybi
rd
0 25
.00
0 0
0 25
.00
0 0
10.8
6 0
0 0
10.8
6 0.
00
2017
El
azig
Hea
lth
91.2
2 0
0 0
0 91
.22
0 47
.67
0 0
0 0
47.6
7 0.
00
2014
/ 201
5 El
if Pl
astik
12
.00
0 0
0 0
12.0
0 0
12.0
0 0
0 0
0 12
.00
0.00
20
11/ 2
008
Ener
jisa
0 0
128.
07
0 0
128.
07
552.
11
0.00
0
128.
07
0 0
128.
07
552.
11
2015
Et
lik H
ealth
85
.52
0 0
0 7.
26
92.7
7 90
.08
42.1
2 0
0 0
5.76
47
.88
44.3
7 20
10
Eura
sia C
apita
l 0
4.15
0
0 0
4.15
0
0 2.
15
0 0
0 2.
15
0.00
20
13/ 2
014/
201
7/ 2
015/
20
16/ 2
012
Fiba
bank
a 40
.00
25.6
3 0
85.1
4 0
150.
77
0 40
.00
25.6
3 0
85.1
4 0
150.
77
0.00
1997
/ 201
0/ 2
017/
200
6/
1998
/ 201
5 Fi
nans
Lea
sing
91
.82
0 0
0 0
91.8
2 0
91.8
2 0
0 0
0 91
.82
0.00
2015
G
ama
Ener
ji 0
126.
05
0 0
0 12
6.05
0
0 10
4.03
0
0 0
104.
03
0.00
20
17
Gar
anti
Ban
kasi
15
0.34
0
0 0
0 15
0.34
0
150.
34
0 0
0 0
150.
34
0.00
73
Com
mitt
ed
Dis
burs
ed O
utst
andi
ng
Com
mitm
ent
Inst
itutio
n
Fisc
al Y
ear
Shor
t Nam
e Lo
an
Equi
ty
Qua
si-Eq
uity
G
T
Risk
M
ngt
IFC
TO
TAL
Pa
rtic
ipan
t Lo
an
Equi
ty
Qua
si-Eq
uity
G
T
Risk
M
ngt
IFC
TO
TAL
Pa
rtic
ipan
t
2002
G
unko
l 0
0 0.
00
0 0
0.00
0
0 0
0.00
0
0 0.
00
0.00
20
15
Hep
sibur
ada.
com
0
11.1
8 0
0 0
11.1
8 0
0 11
.18
0 0
0 11
.18
0.00
20
15/ 2
016
Hex
agon
KA
50
.00
20.0
0 0
0 4.
15
74.1
5 0
34.1
4 0
0 0
0.77
34
.91
0.00
20
09
IZG
AZ
3.80
0
0 0
0 3.
80
0 3.
80
0 0
0 0
3.80
0.
00
2013
Is
Lea
sing
10.0
0 0
0 0
0 10
.00
0 10
.00
0 0
0 0
10.0
0 0.
00
2009
/ 201
6 Is
tanb
ul M
MI
75.9
1 0
0 0
0 75
.91
57.0
1 32
.96
0 0
0 0
32.9
6 21
.23
2017
/ 201
5 Iy
zico
0
4.86
0
0 0
4.86
0
0 4.
86
0 0
0 4.
86
0.00
20
13/ 2
014/
201
5 Iz
mir
Mun
i 11
7.35
0
0 0
0 11
7.35
0
77.4
4 0
0 0
0 77
.44
0.00
20
13/ 2
015
Izsu
38
.06
0 0
0 0
38.0
6 0
37.4
3 0
0 0
0 37
.43
0.00
20
15
Kay
seri
Hea
lth
39.9
1 0
0 0
3.54
43
.45
0 27
.06
0 0
0 1.
96
29.0
2 0.
00
2016
K
rem
na E
lekt
rik
44.0
0 0
0 0
3.00
47
.00
0 44
.00
0 0
0 0.
87
44.8
7 0.
00
2015
/ 201
2 M
NT
0 29
.15
0 0
0 29
.15
0 0
29.1
5 0
0 0
29.1
5 0.
00
2017
M
artu
r 0
31.9
2 0
0 0
31.9
2 0
0 31
.92
0 0
0 31
.92
0.00
20
13
Med
iterr
a I
0 4.
77
0 0
0 4.
77
0 0
3.89
0
0 0
3.89
0.
00
2017
M
edite
rra
II
0 16
.91
0 0
0 16
.91
0 0
2.83
0
0 0
2.83
0.
00
2014
M
ersin
Por
t 47
.72
0 0
0 0
47.7
2 0
47.7
2 0
0 0
0 47
.72
0.00
19
92
NA
SCO
0
0.00
0
0 0
0.00
0
0 0.
00
0 0
0 0.
00
0.00
20
14/ 2
017/
201
5/ 2
016
Ode
a Ba
nk
65.9
3 48
.56
0 19
8.58
0
313.
06
35.0
0 65
.93
48.5
6 0
198.
58
0 31
3.06
35
.00
2013
/ 201
4 O
zU
23.1
8 0
0 0
0 23
.18
0 23
.18
0 0
0 0
23.1
8 0.
00
2013
Pl
ato
0 0
2.00
0
0 2.
00
0 0
0 2.
00
0 0
2.00
0.
00
2013
/ 200
7/ 2
011/
201
6/
2012
Q
NB
Fina
nsba
nk
115.
00
0 0
0 0
115.
00
0 11
5.00
0
0 0
0 11
5.00
0.
00
2014
R
ecor
dati
Ilac
17.8
2 0
0 0
0 17
.82
0 17
.82
0 0
0 0
17.8
2 0.
00
2016
Re
vo C
apita
l 0
8.00
0
0 0
8.00
0
0 3.
69
0 0
0 3.
69
0.00
20
16
Rone
sans
Hol
ding
0
197.
33
0 0
0 19
7.33
0
0 19
7.33
0
0 0
197.
33
0.00
20
09
Roto
r Ele
ktrik
33
.22
0 0
0 0
33.2
2 0
33.2
2 0
0 0
0 33
.22
0.00
20
06/ 2
014/
200
7 Sa
nko
Gro
up
22.8
9 0
0 0
0 22
.89
15.7
9 22
.89
0 0
0 0
22.8
9 15
.79
2013
Sa
nko
Teks
til
11.5
4 0
0 0
0 11
.54
0 11
.54
0 0
0 0
11.5
4 0.
00
74
Com
mitt
ed
Dis
burs
ed O
utst
andi
ng
Com
mitm
ent
Inst
itutio
n
Fisc
al Y
ear
Shor
t Nam
e Lo
an
Equi
ty
Qua
si-Eq
uity
G
T
Risk
M
ngt
IFC
TO
TAL
Pa
rtic
ipan
t Lo
an
Equi
ty
Qua
si-Eq
uity
G
T
Risk
M
ngt
IFC
TO
TAL
Pa
rtic
ipan
t
2009
/ 201
0/ 2
013/
201
4/
2017
/ 201
1/ 2
015/
201
6/
2008
/ 201
2 Se
ker B
ank
144.
04
22.7
8 0
113.
71
0.53
28
1.06
0
144.
04
22.7
8 0
113.
71
0 28
0.53
0.
00
1997
/ 201
3/ 1
993/
200
3/
2002
Si
se v
e Ca
m
39.7
1 0
0 0
0 39
.71
0 39
.71
0 0
0 0
39.7
1 0.
00
2015
So
da S
anay
ii 0
24.5
2 0
0 0
24.5
2 0
0 24
.52
0 0
0 24
.52
0.00
2013
Su
perfi
lm
20.7
7 0
0 0
0 20
.77
0 20
.77
0 0
0 0
20.7
7 0.
00
2010
TC
E Eg
e 11
.35
0 0
0 0
11.3
5 0
11.3
5 0
0 0
0 11
.35
0.00
20
05/ 2
013/
196
9/ 1
983/
19
93/ 2
017/
197
7/ 1
975/
19
90/ 1
964/
196
7/ 1
980/
19
72/ 2
016/
201
2
TSK
B
134.
62
0 0
6.40
0
141.
02
0 13
4.62
0
0 6.
40
0 14
1.02
0.
00
2016
Ta
xim
Cap
ital I
0
18.9
3 0
0 0
18.9
3 0
0 3.
36
0 0
0 3.
36
0.00
20
14/ 2
012
Tiry
aki
30.0
0 0
0 0
0 30
.00
0 30
.00
0 0
0 0
30.0
0 0.
00
2005
/ 200
9/ 1
999/
198
3/
1993
/ 199
6/ 1
979/
199
0/
1989
/ 198
4/ 2
016/
199
1 Tr
akya
Cam
30
.09
0 0
0 0
30.0
9 11
.10
30.0
9 0
0 0
0 30
.09
11.1
0
2002
Tu
rkve
n I
0 0.
06
0 0
0 0.
06
0 0
0.06
0
0 0
0.06
0.
00
2005
/ 199
9/ 2
017/
199
5/
2003
/ 201
6/ 2
008
Turk
Eko
n Ba
nk
0 0
100.
00
50.0
0 0
150.
00
0 0
0 10
0.00
50
.00
0 15
0.00
0.
00
2007
Tu
rkve
n II
0
24.1
4 0
0 0
24.1
4 0
0 24
.13
0 0
0 24
.13
0.00
20
07
Uni
tim
7.25
0
8.00
0
0 15
.25
0 7.
25
0 8.
00
0 0
15.2
5 0.
00
2016
U
nit I
nves
tmen
t 0
142.
65
0 0
0 14
2.65
0
0 11
2.65
0
0 0
112.
65
0.00
1997
/ 201
0/ 1
998/
201
1/
2015
/ 200
8 Y
api K
redi
Lea
se
49.7
8 0
0 0
0 49
.78
0 49
.78
0 0
0 0
49.7
8 0.
00
2013
/ 201
4/ 2
017/
201
5/
2016
/ 201
2 Y
api K
redi
Ban
k 0
0 0
212.
72
0 21
2.72
0
0 0
0 21
2.72
0
212.
72
0.00
2015
Ze
nium
0
25.0
0 0
0 0
25.0
0 0
0 22
.74
0 0
0 22
.74
0.00
Tota
l Por
tfol
io
2,41
9.21
96
0.76
23
8.07
75
0.34
23
.35
4,39
1.73
91
7.89
2,
177.
67
759.
29
238.
07
750.
34
14.2
3 3,
939.
60
823.
77
75
Annex 6. MIGA Active Guarantees (as of July 29, 2017)
Project
Name
Investor
Name
Effective
Date
Expiry
Date
Business
Sector Investor Country
Gross Exposure
($USD)
Orfin Finansman A.S. RCI Banque S.A. 12/31/2014 12/30/2021 Financial France 53,496,875
Turkish Eximbank Norddeutsche Landesbank Girozentrale 03/31/2015 03/28/2025 Financial United Kingdom 103,868,399
Turkish Eximbank Citibank Europe plc, UK Branch 03/31/2015 03/28/2025 Financial United Kingdom 193,150,363
Turkish EximBank II Citibank N.A. 06/30/2016 06/29/2026 Financial United States 609,645,368
Turkish EximBank II Citibank N.A. 07/01/2016 06/29/2026 Financial United States 233,088,047
Turkish EximBank II Citibank N.A. 11/09/2016 11/07/2026 Financial United States 35,811,552
Turkish EximBank II Citibank N.A. 11/09/2016 11/07/2026 Financial United States 116,015,663
Izmir Light Rail ING Bank, a branch of ING-DiBa AG 06/30/2015 05/31/2030 Infrastructure Germany 32,624,534
Izmir Metropolitan Municipality (IMM) ING Bank, a branch of ING-DiBa AG 06/27/2013 05/12/2023 Infrastructure Germany 34,353,167
Izmir Metropolitan Municipality (IMM) ING Bank, a branch of ING-DiBa AG 06/27/2013 05/12/2023 Infrastructure Germany 11,797,894
Izmir Tramway ING Bank, a branch of ING-DiBa AG 06/05/2014 02/26/2027 Infrastructure Germany 70,897,937
Kadikoy-Kartal-Kaynarca Metro Project Wilmington Trust (London) Limited 04/21/2011 10/14/2020 Infrastructure United Kingdom 115,862,853
Uskudar Metro BNP Paribas 02/12/2015 02/05/2028 Infrastructure France 185,508,624
Adana Integrated Health Campus Meridiam Eastern Europe S.a.r.l. 12/18/2014 12/17/2034 Services Luxembourg 143,998,105
Bursa Integrated Health Care Center Meridiam Eastern Europe S.a.r.l. 05/11/2017 05/10/2032 Services Luxembourg 107,941,451
Elazig Integrated Health Campus Meridiam Eastern Europe S.a.r.l. 11/17/2016 11/16/2036 Services Luxembourg 74,325,307
Elazig Integrated Health Campus ELZ Finance S.A. 12/13/2016 12/12/2036 Services Luxembourg 263,846,337
Turkey Gaziantep Hospital BLT Project
KDB Infrastructure Investments Asset Management Co., Ltd. 04/21/2017 04/20/2037 Services Korea, Republic
of 60,637,075
Yozgat Education and Research Hospital Meridiam Eastern Europe S.a.r.l. 06/19/2015 06/18/2035 Services Luxembourg 30,353,276
Yozgat Education and Research Hospital Siemens Bank GmbH 06/25/2015 06/02/2033 Services Germany 21,400,688
2,498,623,515
76
Annex 7. Summary note of Country Gender Assessment 2016
Turkey has substantially narrowed gender gaps in access to productive endowments and thus to economic opportunity over the last years. Between 2008 and 2013 maternal mortality rates have been cut by half, secondary and tertiary education enrolment rates among women and men have further moved towards convergence, and female labor force participation has increased by 18 percent. These improvements have been partly the consequence of improvements to the legal and institutional framework for gender equality, which have led Turkey to the 35th position (out of 108 countries) in the OECD Social Institutions and Gender Index.
However, and despite these commendable advances, women still show systematically poorer outcomes than men across significant dimensions, and Turkey lags behind countries with similar income levels and its neighbors in this regard. Disparities between men and women are particularly pressing given that, with falling fertility and mortality rates and a substantive young working-age population bulge, the country stands to benefit from a demographic dividend that can only be capitalized by raising the economic inclusion of its entire population. Moreover, the current situation of economic and social instability threatens to reverse the previous advances.
Three central challenges stand out from the analysis:
Overall, women´s lack of participation in economic activity represents and economic and development loss, and may prevent the country from fully taking advantage of the current demographic window of opportunity.
Aggregate figures mask substantial socioeconomic and regional disparities, with women from vulnerable backgrounds bearing the brunt of the existing gender gaps in access to endowments and opportunity.
The comparatively weak agency of Turkish women, as evidenced by the high rate of arranged marriages or the poor political representation of women in institutions, needs to be adequately enforced through strengthening the legal and institutional framework.
Turkey has one of the lowest female labor force participation rates among countries with similar income levels. The low female labor force participation of women is a major concern, especially considering the current stage of demographic transition in the country. Only 32 percent of Turkish women are economically active, compared to 62 percent on average in upper-middle-income countries. Moreover, Turkey is one of the few OECD countries where female labor force participation rates have decreased overall since the 1980s, albeit with fluctuations in the early 1990s and a more sustained increase after the mid-2000s.
The main reason reported by women for not joining the labor force is household and family-related duties, and especially so among women with less than high-school education. Indeed, marriage and childbearing are key determinants for women to transitioning into inactivity. The weak labor market attachment of Turkish women may also be partly explained by skills mismatches and the availability of lower quality and/or unsuitable jobs for them.
77
Women are also underrepresented in entrepreneurship and business ownership and management. While the share of employers in the total employed in Turkey, at 6 percent, is high compared to the average among Eastern Europe and Central Asia (ECA) countries (3.2 percent), the gender gap is particularly large: 7 percent of men are employers compared to only 1 percent of women. The low rates of entrepreneurship among women appear to be related to barriers to enter and remain in those activities. In particular, the gap in financial inclusion between men and women remains comparatively large. As an example, in 2014, 70 percent of men had formal accounts compared to only 44 percent for women.
In addition, and although the share of firms with some female ownership or management in Turkey is 33 percent (close to the average for the ECA region of 36 percent), only 5 percent of Turkish firms have women with 50 percent ownership compared to an ECA average of 27 percent. Similarly, only 5 percent of firms in Turkey have a woman among top management in contrast to 20 percent on average for ECA.
Aggregate gaps are largely explained by especially wide disparities between women and men from disadvantaged socioeconomic backgrounds. Differences in educational outcomes between men/boys and women/girls are largely concentrated among the most vulnerable. For instance, gaps in educational attainment between men and women are the lowest in the urban and wealthier parts of the country including Istanbul and Ankara, while enrollment in higher education increases consistently by income quartile.
In addition, a considerable part of the low female labor force participation of women in Turkey is explained by low-educated women migrants who used to be engaged in agriculture staying out of the market in urban areas. Education also decreases the gender gap in entrepreneurship in Turkey, since it has a much larger positive differential impact for females than males, and appears to be one of the critical protective factors against gender-based violence.
Women´s agency remains comparatively weak. Despite the recent progress made in the legal, institutional and policy framework for the promotion of gender equality in the country, enforcement issues persist, traditional and patriarchal values and practices are widespread and resilient to social change, and women remain politically underrepresented. Although traditional views on the role of women in society are more common among older population groups, suggesting a generational change, one-third of the highly educated and over one-half of the wealthiest Turkish population still believe that women should marry young, and the majority of men and women do not find divorce justifiable. Moreover, traditional practices such as arranged and early marriages continue to be common and widely accepted, especially in rural areas.
At 14.9 percent in 2015, the share of female Parliament representatives remains well below the ECA average of 25.7 percent. The proportion of women in ministerial positions is even lower, at 4 percent, and compares poorly with the average 21.8 percent registered in ECA for the year 2015. At the local level the picture does not change much: A mere 4 percent of the representatives in local governing bodies are women. Only two countries in Europe have a lower ratio of women as government ministers and a lower percentage of female local representatives than Turkey.
Based on the diagnosis of the current gender gaps in the country, decisive action will be required to address these issues in the near future, and particularly on three main fronts:
1. Removing the barriers to women’s economic activity.
78
a. Given the low female labor force participation in the country in connection with household and childcare duties, the provision of quality and affordable childcare, and especially among the most vulnerable women, for whom it should be strongly subsidized, will be key.
b. Other support policies include allowing flexible working times and improving maternity/paternity benefits in order to minimize potential discriminatory practices against women.
c. Business-oriented education and financial inclusion will help reinforce women’s involvement in entrepreneurial activities.
2. Expanding women’s opportunities, especially for those from vulnerable backgrounds, and enlarging the overall economic process in Turkey.
a. Facilitating a beneficial school-to-work transition by tailoring the content of higher education more closely to the needs of the private sector and thus making university education more relevant for the job market.
b. Investing in active labor market programs tailored to men and women’s needs.
c. Increasing the provision of vocational training for women with low education (e.g., low-skilled migrants living in urban areas);
d. Providing scholarship programs for girls in tertiary education, where the gender gap is substantially higher among vulnerable women.
3. Continuing to strengthen women´s agency. a. Adopting decisive actions to curtail early and arranged marriages. b. Ensuring a better representation of women in political institutions, possibly through quotas
in candidate lists. c. Continue developing the institutional and legal framework for gender equality and
making sure that it is adequately enforced.
79
Ann
ex 8
. Citi
zen
Eng
agem
ent R
oadm
ap fo
r T
urke
y C
PF F
Y18
-21
Com
pone
nt
Area
s for
Inte
rven
tion
Prop
osed
Act
ions
/Tar
gets
O
utpu
ts/R
esul
ts
CE
Mai
nstr
eam
ing
acro
ss W
B Po
rtfo
lio
Coun
try
Leve
l •
Dial
ogue
with
clie
nt o
n po
tent
ial C
E re
late
d pr
ior a
ctio
ns fo
r upc
omin
g DP
Os
In
corp
orat
e CE
Roa
dmap
in C
PF
- As
par
t of a
nnua
l por
tfolio
revi
ews,
com
pile
and
ta
ke st
ock
of C
E pr
ogre
ss a
nd ch
alle
nges
in
colla
bora
tion
with
CM
U -
Take
stoc
k of
pro
pose
d ac
tions
/tar
gets
in C
E Ro
adm
ap d
urin
g PL
R
- Re
view
pro
gres
s on
actio
ns ta
ken
and
targ
ets
achi
eved
for C
LR
- Un
dert
ake
cons
ulta
tions
with
civi
l soc
iety
and
ot
her s
take
hold
ers t
o in
form
CLR
Com
pile
list
of C
E re
late
d pr
ior a
ctio
ns in
oth
er D
POs
that
are
i) re
leva
nt to
Tur
key’
s con
text
and
ii) f
rom
OE
CD co
untr
ies
Sys
tem
atic
appr
oach
to i)
stra
tegi
ze a
nd
alig
n CE
inte
rven
tions
with
coun
try
deve
lopm
ents
and
(ii)
mon
itor c
ompl
i anc
e,
qual
ity a
nd im
pact
of C
E in
terv
entio
ns a
t th
e co
untr
y le
vel
Tur
key
emer
ges a
s an
exam
ple
of
syst
emat
ic an
d ef
fect
ive
CE m
ains
trea
min
g fo
r WB,
bey
ond
an e
xclu
sive
focu
s on
mee
ting
corp
orat
e re
quire
men
ts fo
r IPF
s
Proj
ect L
evel
•
Mon
itorin
g of
pro
gres
s on
CE co
rpor
ate
com
mitm
ents
•
Tech
nica
l ass
istan
ce to
task
team
s to
iden
tify
CE e
ntry
poi
nts,
inte
rven
tions
and
in
dica
tors
; cap
acity
bui
ldin
g fo
r PIU
s as a
nd
whe
n ne
eded
Im
prov
e Co
mpl
ianc
e -
Cont
inue
100
% co
mpl
ianc
e in
all
new
pro
ject
s FY
18-2
1 on
the
2 de
sign
orie
nted
corp
orat
e CE
in
dica
tors
-
Take
step
s to
ensu
re 1
00%
com
plia
nce
repo
rtin
g on
ben
efici
ary
feed
back
dur
ing
impl
emen
tatio
n in
the
ISR
by F
Y18
Im
prov
e Q
ualit
y -
Allo
w fo
r mor
e th
an o
ne ch
anne
l for
feed
back
on
any
pro
ject
rela
ted
issue
-
Alig
n w
ith tr
ansp
aren
cy, a
war
enes
s bui
ldin
g an
d ot
her s
uppl
y-sid
e ac
tions
, if a
ny
- Al
ign/
inst
itutio
naliz
e w
ith(in
) gov
ernm
ent
syst
ems w
here
pos
sible
Impr
ove
Impl
emen
tatio
n -
Expl
ore
poss
ibili
ty o
f lin
king
pro
ject
leve
l GRM
s w
ith B
IMER
and
oth
er si
mila
r fee
dbac
k m
echa
nism
s
100
% co
mpl
ianc
e w
ith C
E co
rpor
ate
requ
irem
ents
acr
oss c
ount
ry p
ortfo
lio
Inc
reas
ed a
war
enes
s/ea
se o
f cit
izens
/ben
efici
arie
s to
acce
ss
proj
ect/
gove
rnm
ent f
eedb
ack
syst
ems
Inc
reas
ed a
lignm
ent w
ith T
urke
y’s e
xistin
g fe
edba
ck sy
stem
s, pa
rticu
larly
for s
ervi
ce
deliv
ery
I
mpr
oved
cons
isten
cy a
nd q
ualit
y of
do
cum
enta
tion
on C
E an
d sa
fegu
ards
80
- Ex
tend
the
man
date
of G
RMs s
et u
p fo
r re
settl
emen
t and
oth
er sa
fegu
ards
rela
ted
issue
s to
addr
ess a
ll pr
ojec
t mat
ters
-
Inclu
de o
utre
ach,
esp
ecia
lly w
here
GRM
s and
ot
her f
eedb
ack
mec
hani
sms a
re n
ot u
sed
by
bene
ficia
ries
Im
prov
e Re
port
ing
- Pr
ojec
t act
ions
/res
ults
are
cons
isten
tly re
port
ed
in A
Ms a
nd IS
Rs
- Di
sagg
rega
te fe
edba
ck p
rovi
ded
by w
omen
in a
ll re
port
ing
Show
casin
g Tu
rkey
’s Go
od
Prac
tices
on
Citiz
en C
entr
ic
Serv
ice
Deliv
ery
&
Publ
ic S
ecto
r Re
form
Exam
ples
: •
BIM
ER, S
ABIM
, CIM
ER, A
LO 1
70, E
- Nabız
(e-p
ulse
) •
E-go
vern
men
t Por
tal,
SMS
Info
rmat
ion
Syst
em
• W
hite
des
ks a
nd C
itize
n Re
port
Car
ds
(CRC
s) in
mun
icipa
litie
s •
Pilo
ting
mod
el o
ffice
s to
impr
ove
land
re
gist
ry/c
adas
tre
serv
ice
Mec
hani
sms:
them
atic
roun
d ta
bles
; bes
t pr
actic
e ca
ses;
stud
y vi
sits t
o Tu
rkey
from
ot
her c
ount
ries
Do
cum
ent a
t lea
st 3
bes
t pra
ctice
case
s fro
m T
urke
y (B
IMER
and
E-P
ulse
and
oth
ers a
s ide
ntifi
ed a
nd/o
r ag
reed
by
clien
t) du
ring
Firs
t Yea
r of C
PF
Or
gani
ze d
iscus
sion
with
MoE
and
oth
er re
leva
nt
min
istrie
s to
expl
ore
aven
ues f
or d
ocum
entin
g Tu
rkey
’s ex
perie
nces
in d
isast
er ri
sk m
anag
emen
t, an
d/or
oth
er se
ctor
s as a
gree
d
Orga
nize
at l
east
one
eve
nt (w
orks
hop/
roun
d ta
ble)
by
CPF
Yea
r 3 in
colla
bora
tion
with
the
clien
t to
show
case
Tur
key’
s goo
d pr
actic
es o
n CE
Com
pila
tion
of e
vide
nce
and
Turk
ey’s
good
pr
actic
es to
info
rm d
ialo
gue
with
the
clien
t an
d ot
her c
ount
ries t
hat h
ave
good
pr
actic
es to
shar
e
Dial
ogue
on
Opp
ortu
nitie
s fo
r Dem
and-
Driv
en A
SA
• En
gagi
ng co
mm
unity
inst
itutio
ns in
disa
ster
ris
k re
duct
ion
and
man
agem
ent
• Us
ing
citize
ns’ f
eedb
ack
to d
eepe
n th
e qu
ality
of h
ealth
serv
ice d
eliv
ery
• En
hanc
ing
user
aw
aren
ess a
nd in
cent
ives
to
impr
ove
inclu
siven
ess &
trus
t in
the
e-go
vern
men
t pla
tform
•
Benc
hmar
king
per
form
ance
of s
ervi
ce
deliv
ery
inst
itutio
ns o
n cit
izen-
cent
ricity
En
gage
in d
iscus
sion
with
MoH
on
enha
ncin
g qu
ality
of
serv
ices t
hrou
gh b
ette
r use
r fee
dbac
k--b
ased
on
revi
ew o
f MOH
stra
tegy
and
inpu
ts o
f tas
k te
ams/
CMU
Orga
nize
disc
ussio
n w
ith o
ther
min
istry
(ies)
that
are
ex
tend
ing
disa
ster
resil
ienc
e in
oth
er se
ctor
s to
expl
ore
aven
ues f
or co
mm
unity
bas
ed ri
sk sy
stem
s
Liaise
with
clie
nt a
nd W
B Op
en D
ata
team
(DEC
) to
expl
ore
poss
ibili
ty o
f fea
sibili
ty st
udy
for B
ank
supp
ort
in tw
o ta
rget
min
istrie
s– o
n IC
T to
ols,
e-pa
rtic
ipat
ion
and
open
dat
a.
La
unch
1-2
ASA
s lik
ely
to b
e ut
ilize
d by
the
clien
t to
furt
her C
E in
spec
ific
area
s/se
ctor
s (e.
g. D
RM, e
- gov
erna
nce
in
Turk
ey, e
tc.)