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| Istanbul Kadikoy-Kartal Metro |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 27309 |
| Company name | Metropolitan Municipality of Istanbul |
| Country | Turkey |
| Sector | Transportation and Warehousing |
| Environmental category | B |
| Department | Sub-National Finance |
| Status | Pending Disbursement |
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| Date SPI disclosed | August 6, 2008 |
| Projected board date | September 11, 2008 |
| Previous Events | Signed: September 25, 2008
Approved: September 11, 2008 |
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| View Environmental & Social Review Summary (ESRS), click here |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| The proposed transaction is a EUR 50 million senior loan to Metropolitan Municipality of Istanbul (MMI) in Turkey to help finance a EUR 751 million investment for construction of the 22 km long Kadikoy-Kartal metro rail line on the Anatolian (Asian) side of Istanbul, including 16 metro stations. The project will help reduce travel times and improve mobility along one of the most congested traffic corridors on the Anatolian side of Istanbul by providing a clean, safe and efficient mode of public transit. |
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| Project sponsor and major shareholders of project company |
| The Metropolitan Municipality of Istanbul (MMI) is the local government body responsible for providing city-wide infrastructure services (including public transport and water) to the metropolitan area. In 2005, MMI’s area of jurisdiction was extended from 1830 sq km to 5400 sq km and the number of district level municipalities from 27 to 32. |
| Total project cost and amount and nature of IFC's investment |
| IFC investment consist of a EUR 50 million senior loan to Metropolitan Municipality of Istanbul (MMI) to help finance a EUR 751 million investment for construction of the 22 km long Kadikoy-Kartal metro rail line. |
| Location of project and description of site |
| The Kadikoy-Kartal metro rail line is located on the Anatolian (Asian) side of Istanbul, Turkey. |
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| Anticipated development impact of the project |
The project and other ongoing investments to extend the city’s mass transit network will help make Istanbul a more attractive business location and improve the living standards of its population. By extending coverage of an efficient mode of public transit to the Asian side of the city, the project will help improve overall urban mobility, reduce travel times, expand the labor market, improve access to essential social services and improve the functioning of land markets, thereby contributing to increased urban productivity, economic growth and private sector development. By extending coverage of a clean and safe mode of public transit, the project will reduce dependence on road-based transport/ fossil fuels and contribute to climate change mitigation – helping reduce growth of transport related greenhouse gas emissions. It will also contribute to improved public health outcomes through cleaner air quality and improved road safety (fewer fatalities and injuries) along the project corridor.
The project also presents an opportunity to help MMI move towards greater reliance on market-based financing for its large infrastructure investment programs, enabling the national government to free up scarce concessional resources and sovereign-guaranteed borrowing to meet the investment needs of less creditworthy municipalities. |
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| IFC's expected development contribution |
IFC supports Turkey’s economic program through its active involvement in the main sectors of the economy. The project will help improve competitiveness, employment opportunities and the efficient provision of high quality public transport services in Istanbul which accounts for about a quarter of the national economy.
Istanbul needs to undertake large investments in urban mass transit over the medium term to sustain economic growth, private sector development and meet the demands of a rapidly increasing urban population. These cannot be financed solely by reliance on central transfers, limited concessional financing and sovereign guaranteed multilateral debt. The municipality needs to increasingly access market-based financing. However, commercial lender appetite is limited in the current global credit environment. IFC’s participation in the proposed investment will help:
- fill a financing gap and achieve financial close on this high priority project that will help overcome critical infrastructure gaps which may otherwise constrain continued growth and development of the Asian side of Istanbul.
- improve the project’s sustainability through the application of IFC’s environmental and social performance standards. |
| Environmental and social issues - Category B |
| The project is a category B investment according to IFC’s Environmental and Social Review Procedure. A summary of IFC’s environmental and social review findings for the project including the rationale for the B categorization is publicly available in the Environmental and Social Review Summary (ESRS) disclosed through IFC’s external website. |
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| For inquiries about the project, contact: |
Mr. Salih Dogenci,
Istanbul Metropolitan Municipality
Department of Financial Services
E-mail: salih.dogenci@ibb.gov.tr
Tel: +90 212 449 43 97
Fax: +90 212 449 43 95 |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
| Local access of project documentation |
| The Environmental and Social Review Summary (ESRS) is available to the public at the offices of local government authorities. |
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