Pavlos Xanthoulis
The return of the European Investment Bank (EIB) to Turkey was officially sealed on June 10, marking the revival of new development projects in the country after a seven-year hiatus.
The decision was approved by the European Union and encouraged by all 27 member states, including the Republic of Cyprus, prompting a positive response from President Recep Tayyip Erdoğan’s government. Turkey’s Finance Minister Mehmet Şimşek welcomed “the return of the EIB to Turkey.”
The agreement effectively reactivates the EIB’s activities in Turkey after the bank suspended lending operations in the country on July 15, 2019, following Ankara’s illegal drilling activities in Cyprus’ Exclusive Economic Zone (EEZ).
A European source speaking to Kathimerini said the agreement is a “clear indication of the broader trend toward strengthening EU-Turkey relations.”
Cyprus linkage absent despite Nicosia’s position
The development is particularly significant because the EIB’s return to Turkey concerns one of the most important files in EU-Turkey relations, which Nicosia has repeatedly argued should be linked to progress on the Cyprus issue.
President Nikos Christodoulides has maintained that Turkey has not received benefits from the EU without offering something in return. However, the outcome of this case appears to show that the EIB file moved forward without any direct concessions from Ankara on the Cyprus issue, which remains deadlocked.
The timing has also drawn attention, as the EIB agreement was finalized while Erdoğan was reiterating his support for a two-state solution in Cyprus and warning of a “very harsh and very clear response” should Turkey’s interests or what it describes as Turkish Cypriot rights be challenged.
Agreement comes despite recent tensions
The EIB’s return also comes shortly after an incident in which Turkish fighter jets reportedly approached aircraft carrying the defence ministers of Greece, France, and the Netherlands as they traveled to Cyprus.
According to the report, Turkey deployed two F-16 aircraft near the planes as a demonstration of sovereignty over the area that Ankara defines as the airspace of the self-declared “Turkish Republic of Northern Cyprus” in the island’s occupied north.
The European Commission did not immediately condemn the incident. When asked, it said it would investigate the matter, a response that, according to the report, created the impression that Brussels was distancing itself from the claims made by Nicosia.
A new chapter for EIB-Turkey cooperation
EIB Vice-President Robert de Groot described the June 10 signing as marking “a new phase of cooperation between the EIB and Turkey.”
Under the agreement, the EIB will provide €200 million through Turkey’s Development and Investment Bank and Turk Eximbank to support Turkish businesses investing in energy efficiency, renewable energy, and green industry.
The funds will be directed mainly toward small and medium-sized enterprises, as well as mid-sized companies, with the aim of reducing greenhouse gas emissions, strengthening supply chains and energy security, increasing climate resilience, and creating new green jobs in Turkey.
Turkey’s finance minister, Mehmet Şimşek said the financing would help businesses invest in clean energy, improve efficiency, and increase competitiveness.
“It is a practical example of how Turkey and the EU can work together to support sustainable growth and shared prosperity,” he said.
The EIB delegation also visited Hatay, one of the provinces hardest hit by the devastating 2023 earthquakes, where the bank is supporting the reconstruction of water and wastewater infrastructure through a €400 million operation that forms part of wider EU assistance.
Broader EU-Turkey cooperation has advanced despite no movement on Cyprus
The EIB agreement is the latest in a series of EU-Turkey initiatives that have moved forward since EU member states agreed in April 2024 to advance work on the EU’s roadmap for relations with Turkey.
According to the report, at least four major EU-Turkey files have progressed without being linked to developments in the Cyprus issue:
- High-level political dialogue between the EU and Turkey, which had been frozen since 2019 due to Turkish actions in Cyprus’ EEZ, has resumed.
- The EU and Turkey have restarted discussions on modernizing their customs union, a move expected to significantly increase trade, which reached approximately €217.5 billion in 2025.
- In December 2024, EU member states encouraged the EIB to resume financing projects in Turkey, a decision that was formally implemented with the June 2026 agreement.
- In July 2025, the European Commission introduced visa facilitation measures for Turkish citizens, allowing them to obtain longer-term Schengen visas under a gradual system.
According to the report, all of these developments have taken place without Turkey changing its long-standing positions on the Cyprus issue.
The report also notes that no Cyprus-related concessions were secured when the European Commission allowed Turkish defense companies participating in European-based consortia to be included in the EU’s SAFE joint defense procurement program.
