Turkey’s latest high-speed project will benefit from a €1.247bn ($1.351bn) financing package, including a €1.027bn loan guaranteed by the export credit agencies of the UK, Italy, Austria, and Poland.
The package, which will allow Turkey to continue developing the 140km line, also includes a €220m commercial loan facility partly supported by the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC).
The loan funding is to be spent on developing a regional line between Yerköy and Kayseri, both in central Anatolia.
The financing was structured by the Mitsubishi UFJ Financing Group (MUFG), which was appointed sole mandated lead arranger, coordinator, structurer and agent bank for the package by Turkey’s Treasury ministry and has structured the funding to allow institutional capital investors to work alongside syndicate lenders.
Christopher Marks, managing director, head of portfolio solutions and innovative finance and growth markets for EMEA at MUFG, said: “We are pleased to have successfully delivered a blended finance solution, with ongoing support from the ECAs and ICIEC, that aligns the financing to the Green Use of Proceeds criteria set by the Republic of Türkiye’s Sustainable Finance Framework.”
The line between Yerköy and Kayseri will connect to the new Ankara to Sivas line, which opened in April 2023, to reduce road congestion and improve exporting links in the region around the nation’s capital.
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Turkish contractors Doğuş İnşaat, Çelikler and Özkar, which built the Ankara to Sivas rail line, will also deliver the new project through a joint venture.
The project is the third rail line in Turkey to receive the backing of the export credit agencies in the UK, Italy and Austria, including another high-speed line between Mersin and Gaziantep in the south of the country, which is supported by a €781m loan.
The country has been developing a number of high-profile rail projects in recent years as it seeks to affirm its place as a vital trade partner between Asia and Europe amid other projects such as the India-Middle East-Europe Corridor (IMEC) which would bypass Turkey to trade with Europe via ships connecting the continent to a rail link between Israel, Jordan, Saudi Arabia and the UAE.