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Electric railway in Turkey built with Swedish products

Financing from SEK to enable one of the top-priority infrastructure projects in Turkey. Several Swedish companies are delivering products and expertise to the railway construction.

Top-priority railway construction

Facts

Transaction: Export credit
Amount: EUR 462 million
Maturity: Construction period, plus 14 years
Borrower: Ministry of Finance, Governtment of Turkey
Buyer: Ministry of Transport and Infrastructure, Turkey
Guaranteed by: Swedish Export Credit Agency (EKN)
Arranger: Standard Chartered Bank

Facts

Transaction: Export credit
Amount: EUR 462 million
Maturity: Construction period, plus 14 years
Borrower: Ministry of Finance, Governtment of Turkey
Buyer: Ministry of Transport and Infrastructure, Turkey
Guaranteed by: Swedish Export Credit Agency (EKN)
Arranger: Standard Chartered Bank

Bursa is one of Turkey’s most industrialized cities but lacks a link to the country’s railway network. Industry and the community in this area require a connection to the existing high-speed railway that runs between Turkey’s largest city of Istanbul and the capital Ankara. As such, the Turkish government is investing in the railway construction that will become one of the top-priority infrastructure projects in Turkey. The project is also part of a strategic vision for transport infrastructure with the aim of reducing the need for road transport, increasing accessibility and reducing traveling times, thereby leading to a reduction in fuel consumption.

The project encompasses the construction of a 201 km electric railway in northwest Turkey, from Bandırma to Osmaneli via the stations Bursa, Yenişehir and Osmaneli.

SEK is financing the rail project with an export credit of EUR 462 million. The transaction is arranged by Standard Chartered Bank and guaranteed by the Swedish Export Credit Agency (EKN). The project, which totals EUR 1 billion, is also being financed by the Danish Export Credit Agency (EKF) and by commercial banks. The Turkish construction contractor Kalyon, which is an EPC company (Engineering, Procurement and Construction) is coordinating the entire project.

The participation of Swedish companies in the delivery is a prerequisite for SEK and EKN to be able to finance and guarantee infrastructure projects abroad. This project has a strong Swedish link and is expected to include direct Swedish deliveries of EUR 110 million. The deliveries include turnkey signal and telecommunication systems from Alstom, switching and fastening systems as well as engineering expertise and production technology for the high-speed railway from Vossloh and construction machinery from Volvo and Epiroc. In addition to Swedish deliveries, there is also considerable value in consolidating Sweden’s strong position in the railway sector including the Swedish company Alstom’s position as global experts of signal systems and powertrains for trains.

“The foundation of this transaction was presented in conjunction with Construction Summit Istanbul 2019 where SEK, together with Team Sweden, organized an event with the aim of increasing Swedish deliveries to major infrastructure projects. Now, two years later, we are very satisfied to have received this credit on site for a project with major Swedish export value.”

Per Edlundh, Director Export and Project Finance, at SEK

 

Would you like to know more?

Contact Per for more information.

per.edlundh@sek.se

+46 8 613 83 98

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