Turkey reaches financial close on biggest PPP to date

The $7.2bn motorway scheme stands out thanks to its phased approach to project financing, hefty budgeted cost and technical complexity.

Deutsche Bank has teamed up with eight Turkish lenders to offer a $4.96 billion facility to Otoyol Yatirim ve Isletme in connection with the financing of Phase II B of the Gebze-Orhangazi-Izmir motorway and the refinancing of Phases I and II A. 

The consortium comprises Akbank, Finansbank, T.C. Ziraat Bankasi, Türkiye Garanti Bankasi, Türkiye Halk Bankasi, Türkiye Is Bankasi, Türkiye Vakiflar Bankasi and Yapi ve Kredi Bankasi, which along with Deutsche Bank's London branch will provide an equal share of the facility. 

The overall project, budgeted at $7.2 billion, represents the largest infrastructure project ever financed under Turkey's build-operate-transfer law. When completed, the six-lane motorway will link the Istanbul metropolitan area with Izmir, the largest city on Turkey's Aegean coast and a major port. It is expected to significantly reduce travel times between the two cities.

The scheme is notable for its phased approach to project financing, hefty financing requirements and technical complexity. It involves the construction of massive structures such as Turkey's longest motorway tunnel, 35 viaducts, 22 interchanges, 3 tunnels, 187 bridges, and the Izmit Bay Crossing, which will be one of the world's longest suspension bridges upon completion.

“We are delighted to have been involved in all phases of the financing of the Gebze-Orhangazi-Izmir motorway. This project, together with many of the major energy and infrastructure projects that we have developed and financed in Turkey, will greatly assist in the further development of the Turkish economy and benefit millions of people,” said Nicholas Wong, co-head of Clifford Chance's worldwide projects group and a partner at the law firm.

The sponsors of the project are Nurol Insaat ve Ticaret, Özaltin Insaat Ticaret ve Sanayi, Makyol Insaat Sanayi Turizm ve Ticaret, Astaldi and Göçay Insaat Taahhüt ve Ticaret.

Phase I of the project involves the design, construction, completion, operation, and maintenance of the 3-kilometre Izmit Bay Crossing suspension bridge and one section of the Gebze-Orhangazi-Izmir motorway.

Phase II A consists of the second section, connecting the Izmit Bay Crossing to the city of Bursa. Phase II B consists of the remaining two sections of motorway. In total, the project includes the construction of 421 kilometres of new motorway, including the widening of and taking over of certain existing sections.

Verdi provided Turkish law advice to the lenders. Legal and structuring advice was provided to the sponsors and borrower by Hergüner Bilgen Özeke.