The EBRD is participating in a landmark transaction in Turkey which will see a major infrastructure project – the Eurasia Tunnel – built under the Bosphorus straits. EBRD’s US$ 150 million loan will complete the US$ 1.4 billion financing together with the US$ 350 million loan from the EIB and a package of financing and guarantees from Korea’s Eximbank and K-Sure with SMBC, Standard Charter and Mizuho participation. The hedging facility for the transaction is provided by some of the lenders as well as the Deutsche Bank.
The Eurasia Tunnel is designed to improve traffic management in this highly congested city of 13 million, once it is completed in 2017. It will connect Istanbul’s European and Anatolian sides – and, wider, Turkey’s European and Asian road networks.
“The project is not only a further milestone in connecting Asia and Europe, - said the EBRD’s managing director for infrastructure Thomas Maier. – As the first major private-public partnership in the road sector with predominantly foreign financing, it will open the way for the financing of Turkey’s impressive pipeline of infrastructure projects. Turkey and Russia have seen the largest PPP projects in Europe this year, confirming that Europe’s emerging markets represent credible business alternatives to operators and investors. So the Eurasia Tunnel will accelerate the future in many ways”.
The Eurasia Tunnel, also known as the Istanbul Strait Road Tube Crossing, will be built by ATAS, a concessionaire company holding the concession from the government of Turkey to construct and operate the tunnel.
ATAS has been established by the Turkey-Korea Joint Venture consortium which was selected trough an international tender by the Turkish government to build and operate the tunnel. The investment partners of ATAS are Turkey’s leading contractor Yapi Merkezi and SK Engineering & Construction - one of the leading Korean construction companies.
The 5.4 km tunnel will be built at 25 metres under sea level. The construction of its approach roads (overall length of the project is 14.6 km) will start at the Asian side in and end in Europe. The tunnel will ease some of the significant automobile traffic which currently goes over two existing bridges and will complement the rail tunnel currently under construction.
“The Eurasia Tunnel will get commuters home quicker, but it will also strengthen Istanbul’s position as an international air hub by allowing faster transport possibilities from airports on either side of the Bosphorus. The EBRD believes Turkey – which today is one of the world’s most dynamic economies - needs increased and improved transport capacity, and we will consider other infrastructure projects that will make it easier to travel to and in Turkey,” said Mike Davey, EBRD Director for Turkey.
Since the beginning of its operations in Turkey in 2009, the EBRD has invested about €2 billion in the country in about 50 projects.