Bank of China contributes $137.66 million to $4.956 billion syndicated loan for Gebze-Orhangazi-İzmir Highway Project

In 2015, a consortium of 9 banks (including Bank of China) issued $4.956 billion of syndicated debt financing to Otoyol Yatırım ve İşletme A.Ş. — a special purpose vehicle (SPV) and a joint venture that is owned by Mak-Yol Insaat (27% equity stake), Ozaltin Insaat (27% equity stake), Nurol Holding AS (27% equity stake), Astaldi (18% equity stake), and Gocay Insaat (1% equity stake) — for the Gebze-Orhangazi-İzmir Highway Project. Each bank reportedly contributed $550 million. The lenders for the project are Akbank, Finansbank, Ziraat Bank, Garanti Bank, Halk Bank, Is Bank, VakıfBank, Yapı ve Kredi Bank, Deutsche Bank, Saudi National Commercial Bank, Bank of China and Siemens Bank. The Turkish lenders (Akbank, Finansbank, Ziraat Bank, Garanti Bank, Halk Bank, Is Bank, VakıfBank, Yapı ve Kredi Bank) provided eight-ninths of the total loan amount ($4.405 billion) equally among themselves, while the four foreign lenders (Deutsche Bank, Saudi National Commercial Bank, Bank of China and Siemens Bank) provided the remaining one-ninth of the total loan amount ($550.66 million). The loan maturity length is 15 years and the repayment period ends in 2030. However, all other borrowing terms are unknown. Total investment in the project was $7.3 billion, including $4.956 billion of debt, $1.5 billion of equity, and $800 million from operational revenues. The Gebze-Orhangazi-Izmir Motorway was a toll motorway project procured by the Turkish General Directorate of Highways under a Build, Operate, and Transfer (BOT) Model and is the largest BOT project in Turkey to date. It involved the construction of a 420 km motorway between Gebze and İzmir with 208 toll booths and a 3000-meter suspension bridge crossing İzmit bay. Upon completion, it was expected that the project would reduce travel times from Istanbul to Izmir from 8-10 hours to 3.5 – 4 hours. The starting point of the motorway is Gebze and it then crosses İzmit bay located between Dilovası and Hersek through a Suspension Bridge measuring 3,000 meters in length. It then extends to Orhangazi and Gemlik and is connected to Bursa Ring Road at the Ovaakça intersection. From the Bursa Ring Road, it continues onward to Balıkesir — starting at the Bursa - Karacabey intersection and continuing through the north of Susurluk. It then continues south from the west of Balıkesir — via the Savaştepe, Soma, Kırkağaç districts — and extends to the west near Turgutlu. It runs in parallel to the İzmir-Uşak state highway and finally connects with the Anadolu Lisesi intersection over the İzmir ring road. On September 20, 2010, Otoyol Yatırım ve İşletme A.Ş. (which was created on September 20, 2010) signed a 22.33-year concession agreement with the General Directorate of Highways of Turkey to build and operate the Gebze-Orhangazi-İzmir motorway between 2013 and 2035. Then, on October 28, 2010, the ceremony for the start of construction works in Gebze took place in the Dilovasi district of Kocaeli Province. A ceremony for the start of construction works in İzmir was held in Alsancak Cumhuriyet Square on February 27, 2011. Phase 1 of the project — a segment of the motorway that runs from Gebze (Muallimköy) intersection to the Altınova intersection and includes the Osmangazi Suspension Bridge — was opened to traffic on July 1, 2016. Phase 2A of the project — a segment of the motorway that runs from Gemlik Junction to Bursa Caglayan Junction — was completed and opened to traffic on March 12, 2017. Phase 2B of the project — a segment of the motorway that runs from Kemalpaşa Junction to Saruhanlı Junction 01 — was completed and opened to traffic on December 1, 2018. On August 4, 2019, the entire Istanbul-Izmir motorway was put into operation.

Additional details

1. This project is also known as the Otoyol 5 Project and the Istanbul-Izmir Motorway Project. The Turkish project title is Gebze-Orhangazi-İzmir (İzmit Körfez Geçişi ve Bağlantı Yolları Dahil) Otoyolu Projesi’nin or İstanbul – İzmir Otoyolu. Given that four foreign lenders (Deutsche Bank, Saudi National Commercial Bank, Bank of China, and Siemens Bank) provided $550.66 million of total debt financing, AidData assumes for the time being that each of these lenders contributed equal amounts ($137.66 million). This issue merits further investigation.

Number of official sources

7

Number of total sources

12