This study by the Swiss NGO Berne Declaration assesses the World Bank Clean Technology Fund (CTF) in Turkey – a US$100 million loan program added to a US$500 million IBRD loan to promote energy efficiency and renewable energy projects in Turkey.

The Berne Declaration’s research shows that the CTF Turkey achieved its objectives in the energy efficiency sector and concerning small hydropower projects. However, hydropower is already marketable and we have found no evidence that the comparatively large portion of CTF money invested in these projects has leveraged investment in other renewable energies. In addition, there are serious concerns about the environmental and social risks of hydropower projects. The CTF Turkey supported 26 energy efficiency and 30 hydropower projects but only five wind power projects and one geothermal power project, while solar and biomass energy projects were disregarded. This paper argues that persisting regulatory hurdles and the existence of long-term binding oil and gas contracts were insufficiently factored into the CTF strategy.

As modest climate finance programs like the CTF can only be successful if they are scaled up by other international and local finance, the CTF Turkey clearly failed to fulfil its potential. Our research shows that without the clear political will to remove existing regulatory hurdles, such investment does not suffice to develop the market in renewable energies. The collaboration with two local banks acting as financial intermediaries was successful in terms of speedy disbursement of the CTF loans but failed to meet World Bank standards for transparency and stakeholder participation.

The CTF Turkey is a compelling case for more proactive disclosure of information about projects in the CTF pipeline, especially if implemented through financial intermediaries. Based on an analysis of objectives and results, this paper provides recommendations for the strategy, planning and implementation of climate funding.