A financing agreement valued at around $870 million was signed in London on 19 December for the Izmit water supply project.
The package opens the way forward towards the conclusion of another large build-operatetransfer (BOT) project.
The Izmit project's promoters are the UK's Thames Water with the local Gama Endustri Tesisleri Imalat & Montaj and Guns Insaat & Muhendislik. Shareholders in the BOT venture are Izmit municipality, Thames Water, Gama, Guns, and Japan's Mitsui & Company and Sumitomo Corporation.
The financing package arranged by The Chase Investment Bank breaks down into:
export credits valued at a total $580 million supplied through the Export-Import Bank of Japan, the UK's Export Credits Guarantee Department, and France's Coface a $160 million commercial loan over seven years with three years' grace, at interest of 225 basis points over the London interbank offered rate (Libor) around $130 million in equity contributions from the shareholders The project aims to supply 142 million cubic metres (mcm) of water a year, of which 20 mcm will be supplied to Istanbul.
Construction will take three years, after which the BOT venture will operate the project for 15 years, repaying construction financing and making profits from the proceeds.
Construction work will involve:
the completion of the Yuvacik dam a water treatment plant and two pumping stations the laying of a distribution main in Izmit construction of a trunk main to Istanbul The financing agreement follows one signed recently for the DM 2,300 million ($1,594 million) 672-MW Birecik dam project on the Euphrates. They are among several large BOT projects moving forwards rapidly now after years in gestation (MEED 1:12:95).