A European development bank on Wednesday announced it would provide about 30 million euros ($32.5 million) in long-term financing to Türkiye's Rönesans Gayrimenkul Yatırım (RGY) to support regions affected by last year's devastating earthquakes.
The European Bank for Reconstruction and Development (EBRD) loan will be extended to the subsidiary of Türkiye's Rönesans Holding that deals with commercial real estate development and investment, the company said in a statement.
It said the funds would be used to support the capex of two shopping centers in the southeastern provinces of Kahramanmaraş and Şanlıurfa that were struck by the February 2023 earthquakes. The loan will be backed by a guarantee from the European Union.
RGY says it is Türkiye's largest commercial real estate investment group and boasts an asset portfolio of 16 properties, which had a gross value of 2.6 euros billion at the end of 2023.
The financing will also help to support businesses and livelihoods in the region, which faces labor shortages following migration from the area after the disaster, the statement said.
The tremors that ripped through the southeastern region early on Feb. 6 killed more than 53,000 people across 11 provinces home to more than 13 million people, leveling hundreds of thousands of buildings and severely damaging the infrastructure.
In the weeks that followed the earthquakes, the EBRD announced a two-year response package worth 1.5 billion euros. The package includes credit lines to individuals and companies, as well as infrastructure investments and support for small and medium-sized enterprises and private-sector partnerships.
The bank says more than half of the investment package has already been made available to companies and individuals in the region.
Jürgen Rigterink, first vice president and head of the Client Services Group of the EBRD, said: "I was shocked and saddened to see during my visit the devastating impact the earthquakes have had on the affected region, and I continue to be inspired by the resilience and determination of the local population here."
"Reconstruction is a long process and can take many years, but it begins by allowing the private sector to regain its vibrant potential. I am proud to say that we have already made available more than half of our initial 1.5 euros billion investment response, and we will continue to stand with Türkiye on its path to recovery by supporting projects that preserve the livelihoods of the region," Rigterink said.
On Tuesday, the Turkish Treasury and the EBRD signed a memorandum of understanding for 500 million euro financing to support efforts to revive the earthquake region.
Mathieu Bousquet, director for Thematic Support, Coordination of Policy and Financial Instruments at the European Commission's Directorate General for Neighborhood and Enlargement Negotiations, said: "We are very satisfied to see our guarantee to EBRD contributing to the economic reactivation in the regions affected by the February earthquake in Türkiye and providing specific support to women in the retail business."
"We look forward to a further expansion of this support through our partnership with EBRD," Bousquet added.
Ipek Ilıcak Kayaalp, chair of the board of directors of Rönesans Holding, stressed what she said was a 15-year strong and longstanding partnership with the EBRD.
"We are pleased to collaborate with the Bank on our social infrastructure investment projects in Türkiye and potential projects in Central Asia. We have secured more than 500 million euros in financing from the EBRD for our health care investment projects in the past, and we are now extending our collaboration to the real-estate sector in Türkiye," Kayaalp noted.
"I believe that our partnership will contribute to the ongoing recovery efforts in the earthquake-affected region, as part of our efforts to implement impactful projects to mitigate the effects of earthquakes."
The EBRD is one of the biggest investors in Türkiye, having provided around 19.5 billion euros in 440 projects and trade facilitation lines since 2009, the majority of them in the private sector.