Turkey and CEB sign third loan agreement to mitigate seismic risk in Istanbul

PARIS/ANKARA - The Council of Europe Development Bank (CEB) and the Ministry of Treasury and Finance of Turkey today signed a third loan agreement worth € 100 million in support of the Istanbul Seismic Risk Mitigation and Emergency Preparedness Project (ISMEP).

Initiated in 2005 under the sponsorship of the Istanbul province governorship, ISMEP is one of the largest single city seismic risk mitigation programmes in the world. It seeks to implement a comprehensive set of mitigating measures and disaster management system to gradually transform Istanbul into a city resilient to a major earthquake.

It is estimated that there is 60 per cent probability that Istanbul could experience a seismic event of a magnitude in the 7.5 range on the Richter scale over the next 20 years. An earthquake of that strength would lead to dramatically higher human, economic and environmental losses than the devastating 1999 quake in the Marmara region.

Governor Rolf Wenzel, who signed the loan agreement on behalf of the CEB, said: "With this new loan, the CEB continues its longstanding role and focus on projects that aim to prevent natural disasters and alleviate potentially dramatic effects of such disasters on local populations. By focusing on the reconstruction of public schools and hospitals, the new loan will particularly benefit the most vulnerable population segments in the event of an earthquake."

Direct beneficiaries of the new investments will be more than 30 000 additional children and students, and by extension more than 15 million Istanbul inhabitants whose lives are under the continuous threat of a possibly devastating earthquake.

Lufti Elvan, Minister of Treasury and Finance of Turkey, said: " ISMEP is a highly visible, internationally acclaimed project which could serve as a model in other countries facing earthquake events. We greatly appreciate the renewed support from the CEB to reinforce our disaster risk management.

The third ISMEP loan from the CEB will help us to solidify the progress made thanks to the previous two loans and to accelerate earthquake preparedness and risk mitigation by focusing on the reconstruction of public schools and health facilities."

The CEB has so far extended two loans worth € 250 million each to finance ISMEP. The initial loan was approved in May 2010 and fully disbursed in September 2014, while the second loan was approved in March 2014 and fully disbursed in March 2019.

The Bank's overall contribution with this loan, counting the previous two loans, represents 21.5 per cent of the current budgeted costs of the programme. The remaining costs have been financed by the World Bank, the European Investment Bank (EIB), the KfW Development Bank (KfW), the Islamic Development Bank (IsDB)., the Asian Infrastructure Investment Bank and the Eco Trade and Development Bank.

Turkey

Turkey was one of the eight Council of Europe member countries that established the CEB in April 1956. Underlining the strong CEB-Turkey relationship, nearly € 7 billion have been approved in support of projects in Turkey since the inception of the Bank's activities. Over the past twenty years the CEB has approved nearly € 2.8 billion in financing to support investments in MSMEs, sustainable public transport, prevention of natural disasters, and COVID-19 response measures. More information can be found here.

Set up in 1956, the CEB (Council of Europe Development Bank) has 42 member states. Twenty-two Central, Eastern and South Eastern European countries, forming the Bank's target countries, are listed among the member states. As a major instrument of the policy of solidarity in Europe, the Bank finances social projects by making available resources raised in conditions reflecting the quality of its rating (Aa1 with Moody's, outlook stable, AAA with Standard & Poor's, outlook stable, AA+ with Fitch Ratings, outlook positive and AAA* with Scope Ratings, outlook stable). It thus grants loans to its member states, and to financial institutions and local authorities in its member states for the financing of projects in the social sector, in accordance with its Articles of Agreement.
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