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UKEF has partnered with different export credit score businesses and MUFG as sole Mandated Lead Arranger to safe over €1.2 billion in financing for a sustainable railway undertaking.
The financing bundle contains a €1.027 billion mortgage assured by ECAs and a separate €220 million industrial mortgage facility supported partially by the Islamic Company for the Insurance coverage of Funding and Export Credit score (ICIEC). MUFG was appointed the only real mandated lead arranger, coordinator, structurer and agent financial institution by the Turkish Ministry of Treasury and Finance.
UKEF assured the ECA facility, with Italian (SACE), Polish (KUKE) and Austrian (OeKB) counterparts offering important reinsurance. ICIEC supplied insurance coverage to a number of of the industrial lenders.
UKEF is an export credit score company working at no web price to the UK taxpayer. Its involvement secures substantial alternatives for UK corporations, that are anticipated to produce metal, pipes and different tools.
The financing permits Turkey’s Ministry of Transport and Infrastructure – performing via the Common Directorate of Infrastructural Funding (AYGM) – to develop 140km of low-carbon electrical railway between Yerköy and Kayseri.
The brand new railway line will assist the nation to broaden its low-carbon rail community, scale back highway congestion and lower web emissions on the Yerköy-Kayseri route by over 6,500 tonnes of CO2e per 12 months. Connecting to the Ankara-Sivas line which opened in April 2023, the brand new route can also be anticipated to help regional financial progress by growing regional passenger and freight rail capability round Turkey’s capital area.
The announcement comes as UK Secretary of State for Enterprise and Commerce Kemi Badenoch visits Turkey to strengthen enterprise hyperlinks.
Kemi Badenoch, UK Enterprise and Commerce Secretary, stated: “I’m delighted to be in Turkey forward of talks to improve our current commerce deal to make it match for the twenty first century.
“With its main economic system and strategic place, Turkey presents enormous alternatives for UK companies. And I’m excited to begin discussions on making certain our new buying and selling relationship with Turkey unlocks these alternatives.”
The undertaking shall be delivered by a three way partnership between Turkish contractors Doğuş İnşaat, Çelikler and Özkar. Doğuş, Çelikler and Özkar have been additionally important contractors for the newly opened Ankara-Sivas Excessive Velocity Railway.
That is the third high-speed railway undertaking which UKEF, SACE and OeKB have collectively backed in Turkey, with their help now serving to to put greater than 900km of observe for a extra sustainable rail community.
Christopher Marks, Managing Director, Head of Portfolio Options, Revolutionary Finance & Development Markets for EMEA, MUFG, stated: “This transaction demonstrates MUFG’s long-term dedication to Türkiye. We’re proud to have labored with the Republic of Türkiye on this landmark financing. We proceed to work with public sector and sponsor shoppers to ship such revolutionary financing options that propel their transition plans for a extra sustainable future. We’re happy to have efficiently delivered a blended finance resolution, with ongoing help from the ECAs and ICIEC, that aligns the financing to the Inexperienced Use of Proceeds standards set by the Republic of Türkiye’s Sustainable Finance Framework.”
Tolga Akkaş, Chairman of the Board from Doguş Çelikler Özkar JV, added: “We’re honoured to be entrusted as the primary contractor for the Yerköy-Kayseri Excessive-Velocity Railway undertaking, advancing the sustainable rail infrastructure in Türkiye. As one of many contractors for the Ankara-Sivas Excessive-Velocity Railway undertaking, inaugurated in April 2023, we’re desirous to carry our experience to the Yerköy-Kayseri route. The adoption of high-speed rail know-how inherently results in a extra energy-efficient and eco-friendly mode of transportation in comparison with conventional options. This undertaking options not solely a big stride in Türkiye’s railway community but additionally connecting communities, driving financial prosperity, and fostering sustainable improvement.”
“This impactful transaction is made potential via the collaborative efforts of esteemed companions akin to UK Export Finance and MUFG. We specific our honest gratitude for his or her unwavering dedication to supporting initiatives that contribute to the sustainable improvement of nations.”
Marcus Dolman, Vice President of the British Exporters Affiliation (BExA), famous: “This deal demonstrates continued help for the event of the Turkish rail community. The UKEF assure gives an enormous increase to UK exporters seeking to enhance, or begin, their export portfolio beneath a safe umbrella. Offers of this sort are important to extend the UK provide chains of enormous abroad contractors. BExA congratulates UKEF on this transaction and their continued help for UK exports.”
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