Turkey's CMB to issue more green bonds and green lease certificates


With the publication of the draft Guide on Green Bonds and Green Lease Certificates on 3 November 2021 on the Capital Markets Board (“CMB) website, the CMB plans to increase the issuance of green bonds and green lease certificates (i.e. green debt instruments) in the Turkish capital market in order to strengthen investor confidence in transparency and external verification, and diversify investment opportunities in projects that contribute to sustainable development.

The following conditions must be met for the issuance of green debt instruments:

  • The issuer must confirm in the framework document that the issuance will be carried out in accordance with the principles set out in the Guide.
  • The funds from the issuance should be used exclusively to finance or refinance new or existing green projects that meet the definition of green projects in the relevant section of this Guide.
  • The compliance of the green debt instrument with the Guide must be certified by an organisation providing external audit services (i.e. an external auditor).

Only if the above conditions are met the issuer can use the designation "green bond/green lease certificate" for a debt instrument.

Key components

The draft Guide contains the following non-exhaustive list of possible green projects:

  • Renewable energy;
  • Energy efficiency;
  • Pollution prevention and control;
  • Environmentally sustainable management of living natural resources and land use;
  • Conservation of terrestrial and aquatic biodiversity;
  • Clean transport;
  • Sustainable water and wastewater management;
  • Adaptation to climate change;
  • Eco-efficient products, production technologies and processes or those adapted to the circular economy; and
  • Green buildings.

In this context, the draft Guide consists of four (4) main components:

  • Use of Funds;
  • Project evaluation and selection process;
  • Management of funds; and
  • Reporting.

Use of funds and project evaluation/selection procedure

It is mandatory to use the funds derived from the issuance of green debt instruments for green projects and to include information on the use of the funds in the framework document, which is a document approved by the Board of Directors of the issuer certifying that the green debt instrument is consistent with the main components specified in the Guide and the place of use of the funds derived from the issuance is compliant with the Guide.

The issuer must disclose the following to investors together with the framework document:

  • Environmental sustainability objectives of eligible green projects;
  • Information on the types of eligible green projects; and
  • Information on the procedures used to identify and manage potential environmental and social risks associated with green projects.

In addition to these items, issuers are also encouraged to include the following items in the framework document:

  • Consistency of eligible green projects with the issuer's overall environmental sustainability goals, strategies, and policies; and
  • Information on label, certificate, taxonomy, standard, compliance and exclusion criteria for project selection, if available.

Upon issuance, issuers must also disclose, together with the issuance document or prospectus, the opinion of an external valuer stating that the green debt instrument complies with the provisions of the Guide. Issuers must obtain a certification from an external appraisal service that the debt instrument complies with the above four (4) core elements of the Guide. Issuers must also obtain certification from external auditors that they have reviewed the internal monitoring methodology and the allocation of funds to projects. The external auditors refer to institutions included in the list of internationally recognised auditors, such as the International Capital Markets Association and the Climate Bonds Initiative.

Management of funds

As regards the management of funds, the net amount (or an amount equivalent to the net amount) arising from the expenditure should be monitored by setting up separate special accounts and ensuring the secure follow-up of all the records made.


For reporting purposes, issuers must disclose updated information on the use of funds annually after the date of issuance under the CMB's current public disclosure of material events rules. In this report, issuers must disclose the list of projects for which funds were provided, a brief description of the projects, the amount used for the projects, and the estimated impact of the projects. Issuers may use the templates recommended by international standards for reporting the impact of projects.

Finally, for issues in foreign markets, the framework document approved by the Board of Directors and prepared in accordance with the foreign green bond standards must be submitted to the CMB together with the external valuer's opinion on the compliance of the issue with the foreign standards. If the issuer is a member of the Public Disclosure Platform (KAP), these documents must be published on the Public Disclosure Platform (PDP) and on the issuer's website.


The draft Guide sets out the principles that must be followed when issuing green bonds and lease certificates in national and international markets, where only some disclosure obligations are imposed by the CMB.

The aim of the Guide is to ensure that green debt instruments are issued in accordance with best practices and standards in the international financial markets, to protect investors in the financing of green projects that can contribute to environmental sustainability, and to increase transparency, consistency and comparability. When a green debt instrument is officially endorsed as such by the CMB, it will be the first regulation made in this area. Investors will be protected from greenwashing, as green debt instruments or their equivalent will not be used for capital market instruments that do not fall within the scope of the Guide in Turkey.

For more information on Green Finance in Turkey, please contact your CMS client partner or your local CMS expert: Dr. Döne Yalçın and Arcan Kemahlı.