IFC is providing automotive components manufacturer Ege Endüstri with a 40 million Euro loan to help the company increase its manufacturing capacity while developing a new generation of products for electric vehicles. The financing is part of an IFC effort to support the global transition to cleaner technologies and help Türkiye’s auto manufacturing sector play a prominent role in the fast-growing electric vehicle market.
Ege Endüstri, which makes axle and suspension parts for heavy commercial vehicles, will use the funding to build a modern, energy-efficient factory in Izmir, the nation’s third-largest city. It will produce axles and axle housings for both electric and conventional heavy commercial vehicles. The factory will replace the company’s two existing manufacturing plants and is expected to help Ege Endüstri reduce its greenhouse gas emissions.
“This financing from IFC will help Ege Endüstri to take its production capabilities to the next level,” said Ayhan Özel, General Manager of Ege Endüstri. “The new factory will help meet current and future market expectations covering efficient, high-quality, sustainable products. It will also serve the emerging e-truck market and reduce Ege Endüstri’s greenhouse gas emissions.”
Worldwide, there are about 17 million electric cars, vans, and trucks on the road, according to the consultancy Bloomberg New Energy Finance. By 2040, the number of electric passenger vehicles alone is expected to reach 700 million.
While there are about 300 large Turkish auto part suppliers, IFC estimates that 70 percent of those firms do not have the ability to manufacture components for electric vehicles. Türkiye accounts for only 0.07 percent of exported electric vehicle parts, while Poland accounts for 22 percent and Mexico for 2 percent.
“Turkish firms need to have continued access to long-term credit to remain relevant and competitive in the global economy,” said Arnaud Dupoizat, IFC Country Manager for Türkiye. “IFC’s investment is expected to help foster the progressive integration of Türkiye’s auto parts industry into the growing global electric vehicle segment.”
IFCs financing will also help Ege Endüstri grow its exports which are considered key in a country facing a growing need for foreign exchange.
This is IFC’s second investment in the electric vehicle space in Türkiye. In 2020, IFC provided a $150 million equivalent loan to Ford Otosan to help the company launch new models, including electric and hybrid vehicles.
IFC has supported private sector development in Türkiye for over 50 years, with investments totalling over $4.3 billion in the country as of June 2021. Türkiye represents IFC’s second-largest country exposure.
