Turkish road PPP project gets $5 billion financing

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Turkish road PPP project gets $5 billion financing

Astaldi-led consortium has signed a financing contract worth US$5 billion for the Gebze-Orhangazi-Izmir motorway public private partnership (PPP) project in Turkey.

The total project investment is estimated at US$6.4 billion. This new funding will be used to complete the final portion of the 301 km route linking Bursa to Izmir and to refinance the two other sections. This operation completes the entire work's financing process, with the rebalancing of the Debt/Equity ratio for the project at 78/22 (from the initial 50/50) and with no need for additional equity contribution for Astaldi.

The pool of financing banks consists of Akbank, Deutsche Bank AG London Branch, Finansbank, Garanti Bankas?, Halkbank, ?? Bankas?, Vak?fbank, Yap? Kredi and Ziraat Bankas?.

The 400 km road is under construction in separate operational lots:

  • Phase 1: 53 km, Gebze-Orhangazi section, including the Izmit Bay Bridge,
  • Phase 2A: 25 km, Orhangazi-Bursa route, and
  • Phase 2B: 301 km, Bursa-Izmir section.

Once completed, the work will ensure the link between Gebze (near Istanbul) and Izmir (on the Aegean coast), halving the travel time by car which currently exceeds 8 hours. The project includes a suspension bridge that will be the 4th longest in the world.

The project is being developed on a build, operate and transfer (BOT) basis. The concession period is 22 years.

Astaldi has been present in Turkey since the 1980s. It has already built an important section of the Anatolian motorway (116 km, Gumusova-Gerede section), in addition to the Istanbul Underground (26 km in length and 16 stations), the new International Terminal of the Milas-Bodrum airport, and the Bridge over the Golden Horn (Haliç Bridge).

Currently, Astaldi is working in Turkey on a project to build and subsequently manage the Third Bosphorus Bridge and is engaged in finalizing the financing contract of the concession agreement for the Etlik healthcare facility in Ankara.

We have recently reported on several PPP projects in Turkey:

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