TCDD - Halkali Kapikule Line

Location:

Turkey

Project number:

51582

Business sector:

Transport

Notice type:

State

Approval date:

10 Mar 2021

Status:

Concept Reviewed

PSD disclosed:

03 Jul 2020

Project Description

A sovereign loan of up to EUR 100 million to the Republic of Turkey. The loan will be on-lent to Turkish State Railways, or TCDD.

The financing will be for the construction of an approximately 76 km section of a new high-speed railway line from Halkali station, Istanbul, to just before Cerkezkoy station including:

  •     200 km/h max speed, double track, electrified railway and the required systems including ERTMS Level 1, power supply and auxiliaries; and
  •     Modification of relevant existing infrastructure, including stations and connections to existing railway line.

The project is the second phase of the new high-speed railway between Istanbul and Kapikule (the Halkali - Kapikule railway line), near the Bulgarian border. The Halkali - Kapikule railway line will be a part of the Trans-European Transport Network (TEN-T). The Phase 1, between Cerkezkoy station and Kapikule, which is financed separately, is not a part of the EBRD project.

The project will be co-financed by the Asian Infrastructure Investment Bank (AIIB).

Project Objectives

The project involves the development of safe, sustainable, low-carbon, and expedient passenger and freight rail transport between Turkey and the European Union to further facilitate trade via a new high-speed railway from Halkali to Cerkezkoy.

Transition Impact

The project's transition impact stems from the following key areas:

  1. Well-governed. The project and cooperation with the TCDD are expected to facilitate the reorganisation of the company and help improve its operational efficiency. Policy dialogue and technical assistance linked to the project are expected to support enhancement of the legal and regulatory framework in order to improve the commercial orientation of the railway sector.
  2. Integrated. The project will improve the connectivity within Turkey's regions and with rail systems of the neighbouring countries.

Client Information

TURKEY SOVEREIGN

The borrower will be the Ministry of Treasury and Finance on behalf of the Republic of Turkey. TCDD will be the beneficiary of the loan and responsible for the project's implementation.

EBRD Finance Summary

EUR 100,000,000.00

A loan of up to EUR 100 million.

Total Project Cost

EUR 663,500,032.00

The total project cost is estimated at EUR 663.5 million for an approximately 76 km railway line. The project will be subject to further technical amendment.

The Asian Infrastructure Investment Bank is providing parallel financing.

Additionality

The EBRD will promote sector reform and sustainability, bringing experience in terms of railway sector restructuring and private sector involvement. The project will leverage the Bank's ability to promote the commercialisation and liberalisation of the railway sector in Turkey.

Environmental and Social Summary

The Project is categorised A under EBRD's Environmental and Social Policy (2014) as it has the potential to have significant environmental and social (E&S) impacts associated with the construction and operation of a long-distance railway line.

Environmental and Social Due Diligence (ESDD) has commenced with a review of the existing approved national Environmental Impact Assessment, which has determined that an Environmental and Social Impact Assessment (ESIA) is required for the project. An E&S disclosure package will be developed by international and national consultants in accordance with the EBRD Performance Requirements (PRs) and will include a Non-Technical Summary (NTS),  Environmental and Social Management Plan (ESMP), a Resettlement Action Plan (RAP), a Stakeholder Engagement Plan (SEP), and the ESIA. The E&S disclosure package will be disclosed in English and Turkish for a period of 120 days prior to the EBRD's Board approval. This project summary document will be updated at the start of the disclosure period.

The proposed rail alignment will affect both private and state lands and principally crosses agricultural areas with shorter sections crossing secondary forest habitat. The alignment crosses three Important Bird Areas (IBAs), including running in close proximity to the wetland areas for which two of the IBAs are recognized. Relevant studies will be conducted to assess the sensitivity of biodiversity receptors, the presence of critical Habitat and/or Priority Biodiversity Features in accordance with PR6 and define appropriate measures to mitigate the temporary significant disruptions to the ecological environment induced by noise, dust, hazardous chemicals use and storage, waste generation, etc. during construction; and principally noise and vibration impacts during the operational phase. The ESIA will also assess the impacts and risks during the construction and operation related to noise and vibration effects on adjacent residences; cultural heritage; occupational health and safety, labour management, rail and tunnel safety, natural hazards management, emergency response and gender-specific impacts. Appropriate mitigation measures will be developed in the ESIA and incorporated into the ESMP.

Based on the design prepared by TCDD, the principal impacts due to land acquisition for construction and operation of the railway will be economic displacement, however some physical resettlement is likely to be required. A socio-economic baseline, census, asset inventory and valuation in accordance with national expropriation law and PR 5 will be completed. Based on the socio-economic survey and consultation feedback, potential socio-economic impacts and potential livelihood losses will be identified. The project will develop appropriate mitigation and compensation measures in order to address the impacts as part of the RAP, in line with national and PR5 requirements.  

The SEP will define the stakeholders of the project, nature and frequency of engagements required for each stakeholder category during the construction and the operation phases. Additional measures will be identified and implemented to mitigate risks related to Covid-19 transmission during any stakeholder engagement activity in line with national authorities and WHO guidance. Grievance mechanisms for those affected by the project, including TCDD employees and contractors, as well as sub-contractors' employees, will be established in line with PR2, PR5 and PR10.

An Environmental and Social Action Plan (ESAP) will be developed and disclosed and the project will be monitored regularly to ensure compliance with the ESAP and the Performance Requirements.

Technical Cooperation and Grant Financing

Technical cooperation support for the project includes:

  • Review of the legal and regulatory framework and preparation of commercialisation options for TCDD.
  • Assistance in undertaking technical due diligence.
  • Assistance in undertaking Environmental and Social Impact Assessment.
  • Assistance in tendering and implementation of the project.

The TC programme is subject to further amendments and confirmation.

Company Contact Information

Ministry of Treasure and Finance
Contact Name: Izzet Yerdes (Ministry of Treasury and Finance General Directorate of Foreign Economic Relations)
Telephone: +90 312 204 73 62
Website:  www.hmb.gov.tr
Email: dei_pfd@hmb.gov.tr 
Fax:
Postal Address: Inönü Bulvari No:36 06510 Emek/Ankara

Turkish State Railways
Contact Name: Hasan Pezuk (Head Department of Railway Modernisation – General Directorate of Turkish State Railways)
Telephone: +90 312 520 0202
Website:  www.tcdd.gov.tr
Email: hasanpezuk@tcdd.gov.tr
Fax:
Postal Address: Haci Bayram Mahallesi, Hipodrom Caddesi, No:3, 06050, Altindag / Ankara
 

PSD last updated

03 Jul 2020

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out how to submit a Request for review through our confidential online form, by emailmail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requesters’ identities may be kept confidential, upon request.

 

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