Garanti BBVA finances wind farm in Turkey with gender loan to Polat Energy
Garanti BBVA recently signed the world’s first gender loan with Turkish company Polat Energy. The $44 million loan will finance the construction of Turkey’s largest wind farm. The company’s performance will be annually assessed based on a series of gender criteria, and improvements in their performance will also enhance the terms of the loan.
For years now, Garanti BBVA has advocated for a responsible approach to banking. As part of Garanti BBVA’s commitment to sustainable finance, climate change and gender equality, the bank is financing the construction of the wind farm Soma 4 through a 'gender equality loan.' At 48 MW, it will be the largest wind farm in Turkey. The $44-million loan includes both a $21.4 million cash portion, which matures in eight years; and $22.6 million non-cash portion, which matures in 11.5 years.
Garanti BBVA was a pioneer in emerging markets when it issued the gender bond (a social bond for female entrepreneurs) and it is now the first bank in the world to introduce a gender loan.
With this new product, Garanti BBVA teams will annually assess Polat Energy’s performance in gender equality across its value chain using a methodology developed by the bank. Criteria included in the assessment entail activities such as postnatal return-to-work programs, equality in new recruitment, prioritizing enterprises with female-dominated partnerships in the supply chain, equal pay, policies to prevent harassment, and training to address discrimination against women. The score from the initial assessment will serve as the baseline. Improvements in subsequent assessments will translate into better terms for the loan: lowering the interest rate for the cash portion of the loan and reducing the commission for the non-cash portion. Garanti BBVA's Human Resources team will be on hand to provide support in developing these programs if so required by Polat Energy. In addition to rewarding Polat Energy for improving its gender equality, the gender loan will also encourage other companies to follow suit.
Garanti BBVA Headquarters in Istanbul.
Polat Energy Head of Strategy Alkım Bağ stressed the weight the company places on gender issues: “We have always considered gender equality to be an important issue, as it allows us to benefit from different perspectives and talents in our human resource pool and sustain our success. There is also significant female representation in our current organizational structure. Despite being a very new method of financing for our country, we have found that the gender loan structure aligns with the current vision of our management and finance teams. We are proud to be the first company in Turkey to encourage the use of this credit structure."
Garanti BBVA’s Executive Vice President Ebru Dildar Edin said, "We believe that gender equality is above all a human rights issue. The importance of women needs to be understood, both for a fair society that respects human rights and for a better economy.” She then explained how increasing women’s participation in the workplace to 50 percent would boost the global economy by 26 percent.
In Turkey, the female employment rate is less than half that of men. “If we are able to reach the OECD average of 63 percent through strong policies that support the participation of women in the workplace, Turkey's gross domestic product has the potential to increase by 20 percent by 2025. This would mean an increase of $200 million to $250 million. This figure corresponds to an increase in per capita income of approximately $2,300 to $2,900 by 2025,” she noted.
Ebru Dildar Edin also pointed to the pool of untapped talent that companies are failing to utilize. Women make up 45 percent to 50 percent of the educated Turkish population yet even in leading companies, the rate of female representation does not exceed 30 percent. “Both the state and the private sector have very important roles to play in this regard. Thanks to the gender loan, companies will be able to access financing under more favorable conditions by taking steps toward gender equality,” she added.
Garanti BBVA has a range of different activities to actively promote women’s participation in the economy. The bank’s Executive Vice President pointed to a number of initiatives along these lines, including a program to increase the number of women in senior management positions. As a result, Garanti BBVA was included in the Bloomberg Gender Equality Index three years in a row. “These efforts have broadened our influence on a daily basis. We continue to support women's participation in business life and decision-making processes, both within and outside of Garanti BBVA, thus contributing to companies and the wider economy,” Ebru Dildar Edin explained.
“We are happy - and proud - to introduce an innovative new product to both Turkey and the rest of the world,” said Ebru Dildar Edin, adding: “We will continue to strive to be a leader in our sector in terms of gender equality, and to serve as an example to other institutions that have the potential to make an impact in this field by including more women."
Other interesting stories