The UK government, through its export credit agency UK Export Finance, has underwritten a loan worth €781m ($867m) to a multi-national construction company to finish a high-speed railway in southern Turkey.
The electrified rail line will connect Mersin with Gaziantep, via Adana and Osmaniye. It is a Turkish government project, tendered to the Turkish-Dutch corporation Rönesans Holding.
UKEF explained the financing package requires Rönesans Holding to use UK exporters to supply the project. The construction corporation said it has already engaged with UK suppliers to negotiate contracts for electronic infrastructure, ESG consultancy services, catenary and mechanical components.
A UKEF spokesperson told Railway Technology: “The UK’s railway industry is home to world-class expertise which has grown over centuries. We are always interested in looking at projects which unlock new export opportunities for UK suppliers to the rail sector – especially those projects which are helping to create more sustainable forms of travel. Our support for the high-speed electric railway between Mersin and Gaziantep does exactly this.”
The Mersin-Gazientep line is a Turkish Transport Ministry project, financed via the UKEF’s Buyer Credit Facility.
UK Minister for Exports Lord Malcolm Offord said: “The UK-Turkey trading relationship is going from strength to strength. Last year, UK exports to Turkey reached £8.5bn and last week, we announced plans for an updated trade deal that will further boost exports and imports between our countries.
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“UK Export Finance’s backing for this transformative high-speed railway adds to this success story. This deal shows that the UK, home to the world’s first railway system, still moves full steam ahead with its export of railroad innovation and expertise.”
The loan itself was provided by US lender JP Morgan, Dutch financiers ING Bank and France’s BNP Paribas.
European companies SACE and OeKB added further export finance insurance.
Rönesans Holding president Erman Ilıcak said: “Our fruitful collaboration with British exporters has secured €781m in financing for the transformative high-speed electrified railway in southern Turkey, adding tremendous value to the cooperation between Turkey and UK exports and services while paving the way for exciting global partnerships.”
Turkey’s Finance Minister Mehmet Şimşek pointed out the importance of upgrading the historic southern trade route and introducing sustainable transport technology: “Mersin, Adana and Gaziantep are among the highly industrialised and important cities of the region with their deep-rooted cultural heritage.
“This project will ensure a reduction of transportation costs, decrease travel time between Mersin and Gaziantep and strengthen our railway connectivity.
“In this regard, this project is crucial for economic, social and environmental integration… The most important aim of the project is to improve rail connectivity and create a sustainable alternative transportation scheme in Turkey.”