The €2.1bn green financing will be guaranteed by UK Export Finance (UKEF), through its Buyer Credit Scheme, with Credit Suisse and Standard Chartered structuring and coordinating banks arranging the transaction.
This is the first UK-supported rail transaction in Turkey for more than 160 years, and forms part of Turkey’s plan to transform high speed rail in the country.
The new 503km electric-powered railway line will connect Ankara, Tukey’s capital, to the huge port-side city of Izmir. When complete, the new line will provide a faster, lower carbon alternative to current air and road routes between the two cities, helping to fulfil Turkey’s climate change commitments made at COP26.
International trade secretary, Anne-Marie Trevelyan, said, “Turkey is a vital trading partner for the UK. Our shared global outlook on free trade and the environment is the driving force behind economic growth in our two nations. It is fitting that UK Export Finance’s biggest ever civil infrastructure deal is strongly sustainable. This is a proud moment for the UK railway industry, using its industrial roots to reduce emissions in heavily polluted cities.”
Treasury and finance minister for Turkey, Dr Nureddin Nebati, added, “Referring to the Bilateral Cooperation Agreement signed between the UK and Türkiye in 1999; we have successfully achieved the closing of the landmark financing of Ankara İzmir High Speed Railway Project under the green loan structure.
“We have given utmost importance to the environmental and social procedures during this project and as the Ministry of Treasury and Finance we are closely following the improvements of such issues. We also desire to be among the active and important players of the rapidly growing green finance market.”
Turkey is one of the UK’s most important independent trading partners. The bilateral trading relationship was worth £17.5 billion in the four quarters to the end of Q3 2021, increasing by £1.4 billion from the same period in 2020.
The rail deal will secure major contracts for UK companies of all sizes to supply to the project, with several nine-figure deals for UK companies close to being agreed. Engineering and construction giants ERG International Group is using its close ties with the UK supply chain to support the project.
UK companies are expected to supply British-made railway lines, turnouts, point machines, fasteners, material, and equipment for signaling, telecommunication and electrification systems, as well as vital insurance and freight services.