UK Export Finance (UKEF) is supporting a €781mn loan provided by three banks for the construction of a high-speed train track in southern Turkey.
The lending was arranged by JP Morgan, with BNP Paribas and ING also acting as mandated lead arrangers and original lenders. UKEF is supporting the facility through a buyer credit facility, which is reinsured through the export credit agencies (ECAs) of Austria and Italy.
Turkey’s transport and infrastructure ministry is the borrower on the deal, which will help fund new electrified tracks and associated infrastructure, and renovate some existing lines, on a 286km section of high-speed railway between the cities of Mersin and Gaziantep.
The project is designed to replace the current diesel-powered locomotives and provide a lower-carbon alternative to congested road routes. The equivalent of 157,000 tonnes of carbon dioxide will be saved in the first year of operation, according to UKEF.
Able to accommodate trains travelling up to 200km per hour, the new tracks will also cut travel time between Mersin and Gaziantep by four hours, the ECA says.
Turkish contractor Rönesans Holding is building the railway and has committed to sourcing from the UK. It will use the deal to build relationships with UK exporters.
“Our fruitful collaboration with British exporters has secured €781mn in financing for the transformative high-speed electrified railway in southern Turkey, adding tremendous value to the co-operation between Türkiye and UK exports and services while paving the way for exciting global partnerships,” says Rönesans Holding president Erman Ilıcak.
Turkish finance minister Mehmet Şimşek says the government is keen to continue working with UKEF on future projects.
John Meakin, JP Morgan’s global head of export and agency finance, says the bank is “honoured to have the responsibility to deliver the financing for this impactful project while supporting UK exporters providing goods, services and notable technical expertise”.
The Turkish government’s push to expand the high-speed rail network in the country has been rich pickings for lenders and ECAs, with recent deals including a UKEF-backed €2.4bn loan led by Credit Suisse and Standard Chartered in 2022, and a €576mn loan supported by the Danish ECA and also led by Standard Chartered in 2021.
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