- EBRD arranging €97.5 million loan, of which €20 million will be provided by Société Générale
- Black Sea Trade and Development Bank (BSTDB) to join forces, with additional €77.5 million loan
- Funds to finance new line of Istanbul Metro
Citizens of Istanbul, one of the most densely populated conurbations in the world, will benefit from the construction of a new metro line, with 11 stations connecting districts on the Asian side of the city and financed by a loan put together by international partners.
The EBRD has arranged a €97.5 million syndicated loan, of which Société Générale will provide a tranche of €20 million under an A/B structure. An additional loan of €77.5 million will be extended separately by the BSTDB. The total cost of the project is €410 million.
The Istanbul city authorities and the EBRD started discussing financial support for the project last year at the height of the financial turbulence in Turkey. The swift conclusion of negotiations will now enable the immediate implementation of this key infrastructure investment.
The new 13-kilometre line will complement the three existing lines of Uskudar-Cekmekoy, Kadıkoy-Tavsantepe and Marmaray with a link from the north to the south side of the city and will add a total of 350,000 passengers a day to the city’s rail transport network. Shifting traffic from private cars to public transport is essential to combating congestion and reducing carbon emissions. However, to achieve this, a massive expansion of environmentally friendly transport, such as the metro, is critical.
Arvid Tuerkner, EBRD Managing Director for Turkey, said: “We welcome this agreement, which combines in an exemplary way what the EBRD stands for and can offer Turkey. We started this engagement when it was difficult to attract commercial lenders, demonstrating that we are a reliable partner in challenging times. The project is remarkable as it addresses some of the key challenges facing Istanbul, such as improving urban transport and reducing environmental pollution, bringing tangible improvements to people’s lives.”
The construction of the new metro line will be complemented by two depot tunnels for rolling stock and a single connection tunnel. At least 250 young people will be involved in the project’s implementation and will receive training and certification under the EBRD’s Inclusion Policy Dialogue programme in Turkey.
Nandita Parshad, EBRD Managing Director, Infrastructure, added: “Infrastructure development in line with economic and environmental needs is of the utmost importance for Turkey. As a longstanding partner, the EBRD is proud to deploy its expertise and experience in this project and stands ready for further engagement in the sector.”
The EBRD is a leading institutional investor in Turkey and has invested in excess of €11.5 billion in more than 300 projects there since 2009. The overwhelming majority of EBRD investments in Turkey are in the private sector.