UPDATE - World Bank Approves Two Financing Packages Worth a Total of $910 Million for Turkey

The World Bank has approved a total of $910 million in financing for Turkey.

Today, the World Bank’s Board of Executive Directors approved $660 million in financing to support Turkey’s efforts to enhance the efficiency of goods movement across the country, promote exports, create employment, and reduce greenhouse gas emissions by expanding electric rail transportation.

The Eastern Turkey Central Corridor Railway Development Project will assist in the expansion and modernization of one of the oldest sections of Turkey's limited railway network. The project will extend the connection between Divriği in Sivas province and Kars province, near the Georgian border in the northeast of the country, with a completely electrified and modern railway line of 660 kilometers, replacing diesel-powered trains. Covering four provinces, the project will provide significant support to local firms and agricultural businesses, as well as improve the welfare of approximately 600,000 people living along the railway route.

The Divriği-Kars-Georgian border section also forms a crucial part of the intercontinental Trans-Caspian International Transport Route, which connects China, Central Asia, South Caucasus, Turkey, and the European Union by rail and sea. Once completed, the project is expected to increase the railway freight capacity from approximately 750,000 tons per year to 20 million tons and eliminate a significant bottleneck in the Trans-Caspian Central Corridor.

Humberto Lopez, the World Bank's Country Director for Turkey, stated regarding the project: “By modernizing and expanding railway connections, Turkey can make progress towards various strategic objectives such as revitalizing local economies, creating employment in underserved areas, contributing to the goal of becoming the logistics hub of the country, and reducing carbon emissions in the transport sector.”

The statement continued: “Turkey is currently highly dependent on road freight transportation as a facilitator of economic growth, with approximately 95% of goods movement conducted via road. This project will reduce transportation times and logistics costs and improve connectivity between Turkey's west and east.

Road freight is responsible for about 50% of transport sector-related greenhouse gas emissions. Therefore, decarbonizing freight transport is crucial for the decarbonization of the Turkish economy and especially important for reducing greenhouse gas emissions from the Turkish industry, including exporters who wish to remain competitive in global trade. Given that the European Union (EU) will start imposing tariffs on carbon-intensive products from 2026, it is particularly vital for Turkish exporters to reduce their carbon footprint. The EU market constitutes 40% of Turkey's exports. By 2030, when the project is fully implemented, it is estimated that 72,332 tons of carbon emissions will be avoided, and this amount will increase to 245,835 tons annually by 2060.

Improving connectivity for passenger and freight transport is expected to provide significant socioeconomic benefits in four provinces (Sivas, Erzincan, Erzurum, and Kars) that lag behind national averages, including per capita GDP. These provinces are also highly exposed to extreme weather events, highlighting the need for resilient infrastructure capable of withstanding floods, landslides, and wildfires.”

Murad Gürmeriç, Team Leader of the World Bank Project, emphasized that: “The project has the potential to offer significant benefits for women, youth, and vulnerable communities by improving climate-resilient connectivity in economically disadvantaged regions, thereby creating jobs and providing better access to markets.”

The World Bank is collaborating with other development partners to support the expansion of the Central Corridor in Turkey. Additional financing is being provided by the Islamic Development Bank and the Asian Development Bank as complementary support to the significant funding provided by the Turkish Government for the Eastern Turkey Central Corridor Railway Development Project.

• Support for Improving Preparedness for Public Health Emergencies

The World Bank’s Board of Executive Directors has approved $250 million in financing to enhance preparedness and management capacity for public health emergencies in Turkey.

The Turkey Public Health Emergency Preparedness Project will help increase vaccine production and strengthen the country's capacity to detect public health emergencies and respond quickly. The project will support vaccine production through financing for equipment purchases and technical assistance activities. Given the country's sensitivity to risks arising from infectious diseases, climate change, and natural disasters, preparedness for emergencies will encompass various public health risks.

In the long run, the project will benefit the entire population of Turkey by increasing access to locally produced vaccines, improving disease tracking, and strengthening emergency response capacity. These efforts will help prevent the spread of infectious diseases and reduce public health risks, creating positive effects in health, economic, and social aspects.

Humberto Lopez, the World Bank's Country Director for Turkey, emphasized during the announcement of the project’s approval: “Turkey has made significant strides in the health sector by increasing access to affordable healthcare through a well-functioning primary healthcare network and improving health outcomes. This project will enhance the country’s resilience to these risks by strengthening its capacity to effectively plan for disease outbreak control and public health emergency response activities and risk communication. The World Bank is pleased to support the Turkish people’s efforts to safeguard against emerging public health risks, such as global pandemics.”

The impacts of climate change, such as heatwaves, floods, and wildfires, further increase Turkey's sensitivity to public health emergencies, and the risks of climate-related natural hazards and resulting outbreaks and biological threats are on the rise.

Nadwa Rafeh, Team Leader of the World Bank Project, stated regarding the project: “These challenges highlight the importance of strengthening Turkey's capacity to effectively respond to increasing public health risks.”

The World Bank is a significant development partner in the health sector for Turkey. The World Bank has recently played a pioneering role in supporting interventions to address the health and economic impacts of the COVID-19 pandemic and has brought together the necessary expertise and high standards to enable further investment in preparing health systems.