The project, which will take four years to build, is anticipated to cost EUR 530 million/Bloombergby Bloomberg
European Bank for Reconstruction & Development (EBRD) plans to invest in Turkey’s railways for the first time on expectations that a return to economic growth will spur demand for transport.
Arvid Tuerkner, EBRD Turkey Managing Director, said that the bank will probably deploy EBRD 1.1 billion ($1.2 billion) in fresh capital in the country this year, up from about EBRD 1 billion which was provided for 35 projects in 2019.
The bank expects Turkey’s economy to expand 2.5 per cent this year from an estimated contraction of 0.2 per cent in 2019.
EBRD is targeting the Halkali-Kapikule high-speed line linking Istanbul to the Bulgarian border to support the ‘reform momentum’ in the sector, said Tuerkner.
The project, which will take four years to build, is anticipated to cost EUR 530 million and has already secured EUR 275 million in grants from the European Union. EBRD, which manages total investments of around EUR 6.9 billion in Turkey, is in talks with the transport ministry on the project, added Tuerkner.
Tuerkner said that EBRD is also urging the health ministry to move ‘a bit faster’ in coming up with solutions to some hospital projects that have run into difficulties.
EBRD has provided EUR 607 million to half of the 16 state-hospital projects carried out under a $10 billion private-public partnership to double the number of beds to more than 95,000. The government In November 2019 decided to end the use of PPPs for the facilities and will use regular tenders because the programme was too costly.
Additionally, EBRD plans to allocate as much as 15 per cent of its Turkish funding in 2020 to equity investments with a focus on companies that have an ‘export-driven manufacturing business compared with 12 per cent in 2019
The bank will continue financing foreign direct investment deals and exporters in 2020 as well as green energy projects, including a plan to fund Turkey’s ministry of education to improve the energy efficiency of school buildings
The lender is also in talks with the energy and treasury ministries over amending the regulation on renewable energy projects that require the use of locally manufactured components, which EBRD cannot support.