The Asian Infrastructure Investment Bank (AIIB) and the Turkish government have signed a $1.6 billion financing agreement at the 31st United Nations Climate Change Conference (COP31) in Antalya to support policy and institutional reforms aimed at accelerating Turkey's transition toward a low-carbon economy.
According to AIIB, the agreement represents its largest climate-focused policy-based financing package to date and will support the implementation of Turkey's Climate Law and its second Nationally Determined Contribution (NDC), which establishes the country's emissions target for 2035 as part of its pathway toward net-zero emissions by 2053. The financing package combines a Climate-Focused Policy-Based Financing (CPBF) loan for the Turkey Climate Action Acceleration Program (TCAAP) with supplemental financing under AIIB's Energy, Food Security and Economic Resilience Facility, with equal funding allocated to each component.
Financing to support Turkey's ETS implementation and green finance framework
The program focuses on three main areas: sustainable finance, sectoral decarbonization and climate resilience. Under the sustainable finance component, the financing will support the operationalization of Turkey's emissions trading system (ETS) and the development of its green finance framework. According to AIIB, integrating climate objectives into fiscal policy and financial regulation will strengthen Turkey's institutional framework for implementing its climate commitments.
The sectoral decarbonization component aims to translate Turkey's national climate targets into sector-specific measures through an updated national mitigation strategy and action plan. The program is intended to strengthen coordination between climate policies and sectoral planning, supporting the implementation of the country's decarbonization objectives. According to AIIB, the financing will also help align future investments with Turkey's long-term transition toward a low-carbon economy.
Climate resilience component to strengthen local adaptation planning
Meanwhile, the climate resilience component will strengthen local adaptation planning and climate risk management in areas including water resources, ecosystems and public health. The measures will support the integration of climate resilience considerations into local planning and institutional decision-making.
The program will be coordinated by Turkey's Ministry of Treasury and Finance, working with the Ministry of Environment, Urbanization and Climate Change and its Directorate of Climate Change. Implementation will also involve financial and energy market regulators, other government institutions and local authorities across all 81 provinces.
