UK Export Finance (UKEF), the UK authorities’s export credit score company, has underwritten €781m of financing – equal to £680m – to help building of a 286km high-speed electrified railway throughout southern Turkey.
With financing supplied by way of UKEF’s Purchaser Credit score Facility, Rönesans Holding will end building of the Mersin-Adana-Gaziantep Excessive Velocity Railway on behalf of the Turkish Ministry of Transport.
The deal is predicted to create new multimillion-pound export contract alternatives for the UK’s infrastructure, engineering and undertaking administration sectors, supporting the Prime Minister’s precedence of rising the UK economic system.
This alerts key future alternatives for UK exporters, with Rönesans Holding – considered one of Europe’s ten largest building firms – intending to make use of the high-speed rail undertaking to construct its wider relationships with the UK provide chain.
Talking in regards to the announcement, Lord Offord, Minister for Exports, mentioned: “The UK-Turkey buying and selling relationship goes from energy to energy. Final yr, UK exports to Turkey reached £8.5 billion, and this week we introduced plans for an up to date commerce deal that may additional enhance exports and imports between our nations.
“UK Export Finance’s backing for this transformative high-speed railway provides to this success story. This deal exhibits that the UK, residence to the world’s first railway system, nonetheless strikes full steam forward with its export of railroad innovation and experience.”
UKEF’s backing – which has been given on the situation that UK exporters provide to the undertaking – will help continued financial progress within the UK, consistent with the federal government’s priorities; Rönesans Holding has already engaged with UK suppliers to barter contracts for digital infrastructure, ESG consultancy providers, catenary and mechanical elements.
UKEF labored in partnership with J.P. Morgan, ING Financial institution and BNP Paribas, who supplied the mortgage, in addition to SACE and OeKB – the Italian and Austrian export credit score companies offering reinsurance – to safe this landmark deal for Turkish rail infrastructure.
Dr. Erman Ilıcak, President of Rönesans Holding, mentioned: “We’re thrilled to be working with UKEF, JP Morgan, ING and BNP to safe a deal that may allow a landmark shift within the Turkish building of rail hyperlinks and the high-speed railway undertaking.
“By upgrading the prevailing railway line to a excessive commonplace railway line, we will probably be actively lowering adverse environmental impression whereas providing a lower-carbon journey different and considerably enhancing the area’s industrial connectivity and commerce. Rönesans Holding takes immense pleasure in contributing to Turkey’s nationwide environmental targets and infrastructure development.
“Our fruitful collaboration with British Exporters has secured €781m in financing for the transformative high-speed electrified railway in southern Turkey, including super worth to the cooperation between Türkiye and UK exports and providers whereas paving the best way for thrilling international partnerships.”
John Meakin, International Head of Export and Company Finance at J.P. Morgan, mentioned: “This undertaking is predicted to scale back site visitors congestion on the motorways and promote extra sustainable transportation within the area. We’re honoured to have the accountability to ship the financing for this impactful undertaking whereas supporting UK exporters offering items, providers and notable technical experience.”
In changing the present railway, which depends on diesel locomotives, the electrified line will present a lower-carbon different to present routes between Mersin and Gaziantep. Challenge forecasts counsel that the finished route will save 157,000 tonnes in CO2e emissions in its first yr alone.
The UKEF-backed undertaking may also contribute on to Turkey’s goal of accelerating high-speed railway protection to 10,000km, by making a rail hyperlink higher than the gap between Cardiff and London.
In a position to carry trains travelling as much as 200 km/h, this transport hyperlink is a serious step forwards for regional infrastructure and progress. The high-speed railway will scale back the journey time from Gaziantep – through regional cities Adana and Osmaniye – to Mersin by 4 hours. Mersin is the second largest container port within the nation and a thriving metropolis of over a million folks.
Treasury and Finance Minister for Türkiye, Mehmet Şimşek, concluded: “Mersin, Adana and Gaziantep are among the many extremely industrialized and necessary cities of the area with their deep-rooted cultural heritage. This undertaking will guarantee a discount of transportation prices, lower journey time between Mersin and Gaziantep and strengthen our railway connectivity.
“On this regard, this undertaking is essential for financial, social and environmental integration. We’re very grateful to our buying and selling associate UKEF for his or her contribution to this necessary undertaking, which is able to develop the nationwide railway community.
“An important goal of the undertaking is to enhance the rail connectivity and create a sustainable different transportation scheme in Türkiye. We stay up for persevering with our fruitful collaboration with new tasks on the best way of growth of Türkiye.”
Gaziantep, the railway’s japanese terminus, was close to the epicentre of the 7.8 magnitude earthquake which struck Turkey in February 2023. The UKEF-backed undertaking for finishing this railway may also contribute to reconstruction in Gaziantep, Osmaniye and different areas of southern Turkey severely broken on this catastrophe.