Bank of China and ICBC participate in EUR 2.4 billion syndicated loan for Ankara-Izmir High-Speed Railway Project

On December 17, 2021, Turkey’s Ministry of Treasury & Finance signed a EUR 2.4 billion syndicated loan agreement with a group of Chinese and non-Chinese banks for the Ankara-Izmir High-Speed Railway Project. The loan has two tranches: a UKEF-backed EUR 2.13 billion, 17.5-year buyer’s credit tranche with 4 participants (Helaba, DZ Bank, BBVA, KfW IPEX-Bank) and a EUR 324.39 million, 10-year commercial tranche with 9 participants (Credit Suisse, Standard Chartered, Société Générale, Finansbank, ICBC, Turkiye Vakiflar Bankasi, Bank of China, Turkiye is Bankasi (Isbank), Turkiye Garanti Bankasi). Credit Suisse and Standard Chartered acted as joint MLAs, coordinators and bookrunners. The purpose of the project is to construct a 503.2 km high-speed rail connecting Ankara, the capital of Turkey to Izmir, the third largest city. The project is part of Turkey's master plan to develop a 10,000 km network of high-speed rail lines by 2023. The project is expected to alleviate traffic congestion and reduce CO2 emissions by providing an alternative to current air and road routes, which resulted in the financial transaction being classified as a ‘green loan’ under LMA’s Green Loan Principles. Ankara-Izmir YHT Yapımı Is Ortaklıgı (a consortium involving ERG International UK, ERG İnşaat Ticaret ve Sanayi Anonim Şirketi, and SSB Sauerwein & Schaefert) is the EPC contractor responsible for project implementation. The project’s groundbreaking ceremony took place on August 30, 2022.

Additional details

1. The December 17, 2021 deal is the largest ECA-backed rail financing of 2021. It is also the largest rail financing signed by UKEF, and a significant commercial contract for UK and sister companies. Switzerland’s SERV, Italy’s Sace and Austria’s OeKB are acting as reinsurers, thus reducing the risk to the UK taxpayer. 2. The individual contributions of the banks that participated in the EUR 324.39 million syndicated loan tranche are unknown. For the time being, AidData assumes equal contributions (EUR 36,043,333) across all 9 members of the syndicate, which implies that the total financial commitment from Chinese state-owned banks was EUR 72,086,666.

Number of official sources

3

Number of total sources

12