QNB Bank in Turkey broke new ground with its pioneering dual issuance of a $100 million green bond and $25 million blue bond, establishing a fresh benchmark for sustainable finance in the region. The transaction delivered Turkey’s first blue bond and joined an exclusive club of just 23 blue bonds globally, structured under QNB Group’s sustainable finance and product framework and aligned with International Finance Corporation (IFC) and European Bank for Reconstruction and Development (EBRD) standards.
The green bond channels funding into renewable energy, energy efficiency and sustainable agriculture, whilst the blue bond champions sustainable tourism and fisheries. Together, they contribute directly to SDG 14 (Life Below Water) and SDG 15 (Life on Land) – particularly relevant for a Mediterranean country with extensive coastlines.
Both bonds were issued as senior unsecured private placements under Reg S format, featuring an unusual two-year grace period and three-year amortisation structure that delivered a 3.75-year weighted average life. Priced at Sofr + 5.252% and settled on October 16, 2024, with maturity on September 20, 2029, the green bond attracted investment from both IFC and EBRD, whilst the blue bond was fully subscribed by IFC.
What sets this deal apart is its strategic focus on SMEs and commercial clients with limited sustainability expertise
The proceeds are earmarked exclusively for new loan disbursements, with no refinancing. QNB Turkey developed bespoke loan packages to support this, with 80% of proceeds allocated to green projects and 20% to blue initiatives. Within the blue bond portfolio, 28% targets sustainable tourism, 5% fisheries and aquaculture, and 67% environmentally sustainable management of land and biodiversity.
QNB Turkey’s existing eligible portfolio demonstrates established green finance credentials, with 25.27% allocated to green buildings, 25.27% to clean transportation, 15% to renewable energy and 5.82% to energy efficiency. Renewable energy financing spans hydropower (60%), solar (18%), geothermal (16%) and wind (6%).
What sets this deal apart is its strategic focus on SMEs and commercial clients with limited sustainability expertise. QNB Turkey provided hands-on technical support and shared its blue finance expertise with partner firms, embedding sustainability into core business practices. The bank’s pipeline includes projects in textiles, tourism and fisheries – sectors that form the backbone of Turkey’s economy and are critical to its climate transition.
