UK Export Finance (UKEF) has underwritten €781m (£680m) in financing to support construction of a 286km (178-mile) high-speed electric railway in southern Turkey.
UKEF is the UK government’s export credit agency; it expects the deal to create new export contract opportunities for the UK’s infrastructure, engineering and project management sectors as part of broader government ambitions to grow the UK economy.
The credit body worked with J.P. Morgan, ING Bank and BNP Paribas, which provided the loan, plus SACE and OeKB, the Italian and Austrian export credit agencies, to set up the deal.
Construction company Rönesans Holding will complete the build on behalf of the Turkish Ministry of Transport.
The firm has expressed intention to use the rail project to strengthen relationships throughout its UK supply chain.
The company has already engaged with UK suppliers to negotiate contracts for electronic infrastructure, ESG consultancy services, catenary and mechanical components, according to a government statement.
The country’s current railway relies on diesel locomotives, which will be replaced along the planned route with an electrified line to offer a lower-carbon alternative to existing routes between Mersin and Gaziantep.
Project forecasts suggest that the completed route will save 157,000 tonnes in carbon emissions in its first year.
The high-speed railway is also intended to reduce travel time from Gaziantep to Mersin, through regional cities, to four hours.
Mehmet Şimşek, treasury and finance minister for Türkiye, said: “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 UKEF 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.”
Gaziantep, the railway’s eastern terminus, was near the epicentre of the earthquake which struck Turkey in February 2023.
Railway construction will also contribute to reconstruction in Gaziantep, Osmaniye and other areas of southern Turkey severely damaged in this disaster, the government has said.