Eximbank pledges to finance renewables in Turkey

ANKARA (Reuters) - U.S. Export-Import Bank pledged $1 billion to finance renewable energy projects in Turkey on Thursday and told Reuters it could double its total loan financing to the country to about $3 billion.

It did not give a timeframe and $3 billion would be less than the $5 billion in loans Turkey has been hoping for although Eximbank Chairman Fred Hochberg said the amount could increase as there was no set limit.

The U.S. Eximbank's current loan portfolio in Turkey is $1.6 billion, including the $1 billion agreed on Thursday, having fallen from as much as $4 billion three or four years ago.

"I would say we can certainly set a goal to double it as a portfolio of projects that we finance in Turkey," Hochberg told Reuters.

The bank has provided $250 million to the Baku-Tbilisi-Ceyhan oil pipeline project.

On Thursday Hochberg signed a memorandum of understanding with Turkish Energy Minister Taner Yildiz in Ankara to finance $1 billion in renewable energy projects.

U.S. Eximbank is mainly discussing energy projects in Turkey but said it is open to all sectors including transportation and satellites.

The bank has recently financed U.S. exports for a Turkish scrap metal plant that produces electricity and a hydroelectric dam project.

Turkey is one of the nine priority countries being targeted for financing by Eximbank because of the major opportunities it offers to American exporters.

Turkey's economy surged 11.7 percent in the first quarter and is expected to grow around 6 percent this year.

Hochberg pointed at strong military and political ties between the two NATO allies and added that the current, limited trade links are not enough.

"One of the reasons why I am here is to try and turn this on its head and change that. We are strong NATO allies but considering how fast (Turkey) is growing, it does not make sense why we are not stronger trade partners," Hochberg said.

The U.S. Eximbank provides working capital guarantees, loan guarantees and direct loans to assist foreign buyers of U.S. goods services. It says it authorized $17.4 billion in loans, guarantees and insurance in the first nine months of fiscal 2010.

(Editing by Susan Fenton)