Syndication has started of a $170 million project loan being arranged by The Chase Manhattan Bank towards the $750 million Izmit water supply project, according to Istanbul banking sources. They expect syndication to close by the end of November.
The seven-year loan will probably carry interest of around 200 basis points above the London interbank offered rate (Libor), and a management fee of around 100 basis points, the sources said. The build-operate-transfer (BOT) project involves a private sector franchise for the financing, construction and operation of a utility. It is being proposed by a venture led by the UK’s Thames Water.
Signing is expected in the first half of November for another BOT, commercial financing arranged by Chase, for a DM 2,100 million ($2,936 million), 672-MW hydro-electric dam planned at Birecik on the Euphrates river in the southeast. Syndication of a DM 465 million ($650 million) loan recently closed oversubscribed, but held at the original amount (MEED 8:9:95).
The eight-year loan carries interest of 225 basis points over Libor, and additional fees of 75-100 basis points. The BOT venture for the Birecik dam is led by Germany’s Philipp Holzmann and the local Gama.