THE UK Government has backed a multi-million-pound loan to deliver a new railway line – in Turkey.
UK Export Finance – the Government’s export credit agency – has underwritten €781 million (£680m) of financing to support the construction of a 286-kilometre high-speed electric railway in the south of the country.
The money comes as part of a deal which the UK Government said had been struck “on the condition that UK exporters supply to the project”.
Exports Minister Lord Offord said he expected the deal to “boost exports and imports between our countries”.
The loan underwritten by the UK Government has been provided by J.P. Morgan, ING Bank and BNP Paribas.
Rönesans Holding is constructing the high-speed railway line to connect Mersin, Turkey’s second-largest port city, with the inland cities Adana, Osmaniye and Gaziantep.
It is expected replacing the current line, which is served by diesel locomotives, will reduce CO2e emissions by over 150,000 tonnes a year, according to the UK Government.
Lord Offord, who is also a Scotland Office minister, 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.”
Dr. Erman Ilıcak, the president of Rönesans Holding, said the deal paved the way for “exciting global partnerships”.
He said: “We’re thrilled to be working with UKEF, JP Morgan, ING and BNP to secure a deal that will enable a landmark shift in the Turkish construction of rail links and the high-speed railway project.
“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.”
Mehmet Şimşek, Turkey’s Treasury and Finance Minister, said: “Mersin, Adana and Gaziantep are among the highly industrialised and important cities of the region with their deep-rooted cultural heritage.
“This project will ensure a reduction of transportation costs, decrease travel time between Mersin and Gaziantep and strengthen our railway connectivity.
“In this regard, this project is crucial for economic, social and environmental integration. We are very grateful to our trading partner [UK Export Finance] for their contribution to this important project, which will expand the national railway network.
“The most important aim of the project is to improve the rail connectivity and create a sustainable alternative transportation scheme in Türkiye.
“We look forward to continuing our fruitful collaboration with new projects on the way of development of Türkiye.”
