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€25 million loan to Kipas seeks to help revive earthquake region’s economy
Proceeds will be used to finance repairs, working capital and human capital needs
Private sector still struggling in the region in the face of vulnerabilities
The European Bank for Reconstruction and Development (EBRD) is providing a €25 million loan to Türkiye’s Kipas Mensucat Isletmeleri to support the company in the aftermath of the devastating earthquakes that hit the region last year.
The proceeds of the loan will be used to carry out repairs to buildings and machinery, meet additional working capital requirements stemming from the earthquake, and finance human capital programmes (including disaster relief programmes and the provision of shelters for the company’s employees).
The earthquakes of 2023 resulted in more than 55,000 fatalities and caused widespread destruction across the region, which had already been struggling with economic vulnerabilities prior to the disaster.
Economic recovery in the region remains slow, reflecting the scale of the destruction and other challenges such as financing gaps and supply chain disruption, with affected cities haemorrhaging human capital owing to a lack of economic opportunities.
Kipas, a new client of the Bank with roots in Kahramanmaras, has implemented various initiatives in response to the crisis, with measures ranging from the provision of temporary shelters to the distribution of food and financial aid. The company manufactures and sells yarn and fabric (both denim and non-denim fabric) and is the largest integrated textile manufacturer in Europe with nearly 6,000 employees.
Following last year’s earthquakes, the EBRD has implemented a €1.5 billion investment package for the region covering a wide range of areas (including financial partnerships, support for small and medium-sized enterprises and assistance with infrastructure projects).
Odile Renaud-Basso, the President of the EBRD, said: “The recovery of the private sector is essential to driving economic progress for the region and the nation as a whole. Companies like Kipas play a crucial role in retaining the region’s human capital, making their presence invaluable. This project marks the beginning of a lasting partnership and a meaningful step toward sustainable progress for the region.”
In a joint statement, Kipas CFO Hikmet Gümüser and Halit Gümüser, CEO, said: “The support provided by the EBRD in overcoming the challenges faced by our city and company following the earthquake centred in Kahramanmaras has gone beyond being a mere source of financing. During this critical period, the EBRD’s presence has not only facilitated our economic recovery, but also enabled us to sustain the wellbeing of our employees and community. Thanks to its financial assistance and guidance, we have been able to focus on post-earthquake strengthening and reconstruction, while ensuring the sustainable protection of our employees’ social security rights.
The visionary approach and solidarity demonstrated by the EBRD have been a great source of inspiration for us. This collaboration has laid the foundations not only for today, but also for the establishment of a more resilient and sustainable structure in the future. On behalf of the entire Kipas family, we extend our heartfelt gratitude to the EBRD for its faith and support during this challenging time.”
This project also includes donor support from Türkiye, focusing on the development of an action plan to increase women’s participation in the business and the implementation of human resources policies that highlight gender equality.
The EBRD is one of Türkiye’s key investors, having committed more than €21 billion in the country since 2009 through 461 projects and trade finance limits, most of it in the private sector. |
