Skip to content
AidData logo

Overview

China Development Bank provides EUR 420 million loan tranche to Turkcell for infrastructure investments and procurement of equipment and hardware from Chinese suppliers (Linked to Record ID#92620)

Commitments (Constant USD, 2023)$492,418,415
Commitment Year•2020Country of Activity•TurkeyDirect Recipient Country of Incorporation•TurkeySector•CommunicationsFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Aug 7, 2020
Start (actual)
Aug 10, 2020
First repayment
Aug 7, 2023
Last repayment
Aug 5, 2028

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Policy Banks

  • China Development Bank (CDB)

Receiving agencies

Private Sector

  • Turkcell İletişim Hizmetleri A.Ş. (Turkcell)

Implementing agencies

Private Sector

  • Turkcell İletişim Hizmetleri A.Ş. (Turkcell)

Loan desecription

China Development Bank provides EUR 420 million loan tranche to Turkcell for infrastructure investments and procurement of equipment and hardware from Chinese suppliers

Grace period•3 yearsGrant element•32.4286%Interest rate (t₀)•1.872%Interest type•Variable Interest RateMaturity•8 years

Narrative

Full Description

Project narrative

On August 7, 2020, China Development signed an EUR 500 million loan agreement with Turkcell İletişim Hizmetleri A.Ş. (“Turkcell”) — the largest (private) mobile phone operator in Turkey — to finance investments in the company's infrastructure and the procurement of equipment and hardware from Chinese suppliers. The signing of the loan agreement, which was amended and extended on August 7, 2023, followed the signing of a memorandum of understanding (MOU) between China Development Bank and Turkcell in December 2019. The EUR 500 million loan consists of two tranches: an EUR 420 million tranche that carries an 8-year maturity, a 3-year grace period, and an annual interest rate of EURIBOR plus a 2.29% margin; and an RMB 695 million tranche that carries an 8-year maturity, a 3-year grace period, and an annual interest rate of 5.15%. Record ID#67356 captures the EUR tranche and Record ID#92620 captures the RMB tranche. As of March 31, 2021 and June 30, 2021, Turkcell had utilized (borrowed) EUR 57.1 million under the EUR 420 million loan tranche and RMB 147.3 million under the RMB 695 million loan tranche. Additional disbursements of EUR 28,900,000, and EUR 36,603,000, and EUR 26,850,000 under the EUR 420 million loan tranche took place on February 8, 2023, May 29, 2023 and June 21, 2023, respectively. An additional disbursement of RMB 42,073,000 under the RMB 695 million tranche took place on September 6, 2023. On August 7, 2023, Turkcell announced the availability period was extended to March 31, 2024.

Staff comments

1. AidData has calculated the all-in interest rate of the EUR loan tranche by adding 2.29% to the average 6-month Euribor in August 2020 (-0.433%). 2. After the memorandum of understanding was signed, Osman Yılmaz, Executive Vice President of Turkcell Finance, said in his statement, ‘We are planning to be ready for financing in these days when our 5G studies are accelerating with our current technology. Our goal is to meet both our current purchases and 5G purchases that may occur in the future.’