There are organizations in the world that have been established for a specific purpose and provide funds for projects prepared for this purpose.
IMF (International Monetary Fund)
The International Monetary Fund was established in 1944 on the Bretton Woods Agreement, which determined the principles of the global monetary system, and started to operate as of March 1, 1947. The IMF was established to ensure economic cooperation between countries, to support free trade, to stabilize exchange rates and to help resolve short-term foreign payments difficulties. Its main purpose is to improve global trade. For this reason, it is an institution that will create liquidity in order to eliminate the global reserve shortage.
Unlike development banks, the IMF does not provide financing for specific projects.
World Bank
The World Bank, whose official name is the International Bank of Reconstruction and Development (IBRD), is affiliated with the United Nations Organization and was established in 1944.
There are three institutions within the World Bank that contribute to the financing of foreign trade. These organizations are:
1) International Bank for Reconstruction and Development: World Bank loans are for public sector projects and private companies through some intermediary banks. However, state guarantees are also required for these.
Energy credits based on renewable resources are used for;
- Production facilities based on wind, solar, geo-thermal, wave, tidal, biomass, hydrogen energy,
- canal and river type hydroelectric production facilities with an installed power of 100 megawatts and less,
- Financing of goods, services, construction costs and related consultancy services for hydroelectric production facilities with a reservoir volume of less than 100 million cubic meters or a reservoir area of less than 15 square kilometers.
More than 50% of the project investment amount and in any case more than 40 million US Dollars cannot be used. The minimum equity capital should be 25% of the project amount. A total of 12 years of maturity can be given, with a maximum of 4 years grace period. The requesting companies are required to obtain the necessary permits and documents in accordance with the legislation.
Renewable energy and energy efficiency credits are provided for financing the goods, services, construction costs and consultancy services of energy production and energy efficiency investments based on renewable resources. This loan amount cannot be more than 75% of the investment amount and under any circumstances more than 50 million US Dollars. The minimum equity capital should be 15% of the project amount. The requesting companies are required to obtain the necessary permits and documents in accordance with the legislation.
SME Credits are used to finance SME companies operating in the fields of manufacturing industry, agriculture-based industry, tourism, education, health, environmental protection, renewable energy, information and communication technologies and whose annual net sales amount does not exceed 20 million USD and whose number of employees does not exceed 250. Total lending can be up to $ 3.5 million per company. Maturity for business loans is 7 years, with a maximum of 2 years grace period, and investment loans are 10 years, with a maximum of 3 years grace period.
2) International Finance Corporation: The International Finance Corporation provides loans to private sector investors in developing countries without a government guarantee. This Institution grants loans to investments up to a maximum of 30-35 million USD. The institution applies maturities between 5 and 10 years for the repayment of these loans.
3) International Development Union: The Union, which mostly supports the investments made for the realization of economic development in the African continent, the loans within the scope of the financing opportunities it provides are in the form of interest-free loans or grants.
United Nations
The United Nations has established organizations that contribute to the financing of foreign trade, emphasizing the importance of imports and production in the development of countries. These organizations are:
1) United Nations Industrial Development Organization: The United Nations Industrial Development Organization provides training, technology and labor support within the framework of various special technical assistance projects.
2) United Nations Capital Development Fund: It supports local development programs in the least developed and poor regions of the world. The main purpose of this Fund is to contribute to the reduction of poverty in the world.