The UK government’s export credit agency has agreed to underwrite €781 million (£675 million) of financing to support construction of a 286km high-speed electric railway in southern Turkey.
REC International, a subsidiary of Rönesans Holding, one of Europe’s ten largest construction companies, will finish construction of the Mersin-Adana-Gaziantep High Speed Railway on behalf of the Turkish Ministry of Transport using a Buyer Credit Facility provided by UK Export Finance (UKEF).
The project involves upgrading and enhancing a 286km main line railway including infrastructure and superstructure works and the installation of electrification, signalization and telecommunication systems. The railway will start in the city of Mersin and end in Başpınar station, with intermediate stations at Adana, Ceyhan, Toprakkale, Bahçe and Nurdağı .
The government expects the new finance arrangement to create new, multimillion-pound export contract opportunities for the UK’s infrastructure, engineering and project management sectors, supports the Prime Minister’s priority of growing the UK economy.
As well as providing good opportunities for UK exporters, Rönesans intends to use the high-speed rail project to build its wider relationships with the UK supply chain.
UK Minister for Exports Lord Offord said: “The UK-Turkey trading relationship is going from strength to strength. Last year, UK exports to Turkey reached £8.5 billion, and this week we announced plans for an updated trade deal that will further boost exports and imports between our countries.
“UK Export Finance’s backing for this transformative high-speed railway adds to this success story. This deal shows that the UK, home to the world’s first railway system, still moves full steam ahead with its export of railroad innovation and expertise.”
The UKEF backing is conditional on UK exporters winning work on the project – Rönesans Holding has already engaged with UK suppliers to negotiate contracts for electronic infrastructure, ESG (environmental, social and governance) consultancy services, catenary and mechanical components.
Dr. Erman Ilıcak, president of Rönesans Holding, said: “By upgrading the existing railway line to a high standard railway line, we will be actively reducing negative environmental impact while offering a lower-carbon travel alternative and significantly enhancing the region’s industrial connectivity and trade. Rönesans Holding takes immense pride in contributing to Turkey’s national environmental goals and infrastructure advancement.
“Our fruitful collaboration with British Exporters has secured €781m in financing for the transformative high-speed electrified railway in southern Turkey, adding tremendous value to the cooperation between Türkiye and UK exports and services while paving the way for exciting global partnerships.”
To secure this deal for Turkish rail infrastructure, UKEF worked in partnership with J.P. Morgan, ING Bank and BNP Paribas, providing the loan, and with SACE and OeKB – the Italian and Austrian export credit agencies providing reinsurance.
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