The financing package comprises a €1.027bn loan guaranteed by ECAs and a separate €220m commercial loan facility supported in part by the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC). MUFG was appointed the sole mandated lead arranger, coordinator, structurer and agent bank by the Turkish Ministry of Treasury and Finance.
UKEF guaranteed the ECA facility, with Italian (SACE), Polish (KUKE) and Austrian (OeKB) counterparts providing significant reinsurance. ICIEC provided insurance to several of the commercial lenders.
UKEF is an export credit agency operating at no net cost to the UK taxpayer. Its involvement secures substantial opportunities for UK firms, which are expected to supply steel, pipes and other equipment.
The financing allows Turkey’s Ministry of Transport and Infrastructure – acting through the General Directorate of Infrastructural Investment (AYGM) – to develop 140km of low-carbon electric railway between Yerköy and Kayseri.
The new railway line will help the country to expand its low-carbon rail network, reduce road congestion and cut net emissions on the Yerköy-Kayseri route by over 6,500 tonnes of CO2e per year.
Connecting to the Ankara-Sivas line which opened in April 2023, the new route is also expected to support regional economic growth by increasing regional passenger and freight rail capacity around Turkey’s capital region.
Kemi Badenoch, UK business and trade secretary, said, “With its major economy and strategic position, Turkey presents huge opportunities for UK businesses. And I’m excited to start discussions on ensuring our new trading relationship with Turkey unlocks those opportunities.
“The project will be delivered by a joint venture between Turkish contractors Doğuş İnşaat, Çelikler and Özkar. Doğuş, Çelikler and Özkar were also main contractors for the newly opened Ankara-Sivas High Speed Railway.
“This is the third high-speed railway project which UKEF, SACE and OeKB have jointly backed in Turkey, with their support now helping to lay more than 900km of track for a more sustainable rail network,” Badenoch added.
Tolga Akkaş, chairman of the board from Doguş Çelikler Özkar JV, concluded, “The adoption of high-speed rail technology inherently leads to a more energy-efficient and eco-friendly mode of transportation compared to traditional alternatives. This project features not only a significant stride in Türkiye’s railway network but also connecting communities, driving economic prosperity, and fostering sustainable development.”