TURKEY: Project finance boost as Ciller visits Japan

03 March 1995

Project finance will be the main issue on the agenda of talks between Prime Minister Tansu Ciller and Japanese officials during her visit to Tokyo at the end of February.

Deals to be discussed include:

Ankara ring road. Approval by the Export-Import Bank of Japan to support the motorway project would pave the way for a $106 million commercial financing. The club deal, led by Citibank and Bank of Tokyo, would also be linked to a loan from the Export-Import Bank of the US of $53 million.

An indicative pricing of 1.8 per cent over the London interbank offered rate (Libor) had been suggested for the 12-year loan in the autumn. The deal represents about 90 per cent Japanese government risk and 10 per cent Turkish risk, hence the favourable pricing. The funds will finance the completion of the motorway by a venture of the US' Bechtel and the local Enka.

Istanbul water supply. This is to finance a $750 million, build-operate- transfer (BOT) water supply project.

Turk Export-Import Bank credit line. The release of an existing Japanese facility of around $200 million for the state trade financing institution.

Power plant loans.

The outcome of the negotiations may pave the way for a successful syndication of a $500 million loan (see below).

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