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Project Name: Istanbul Kadikoy-Kartal Metro
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Country: Turkey
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Highlights:
- The World Bank Group’s first direct engagement at the subnational level in Turkey without a sovereign guarantee.
- A senior unsecured loan of up to Euro50 million to finance the construction of the 22 kilometers long Kadikoy-Kartal metro rail line.
- IFC’s participation helped close a financing gap for the project, and provided comfort to commercial lenders in a tightening global credit environment.
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About the municipality/city:
Istanbul, a mega-city of over 13 million (nearly 20% of the national population) plays a vital role in Turkey’s economic and social life, producing about 27% of the national GDP, generating around 40% of national taxes and accounting for half of all Turkish exports. Population growth in the City has been one of the highest among large OECD metro-regions. MMI, the largest of Turkey’s 16 metro municipalities, is the local government body responsible for providing city-wide infrastructure services, including public transport, to the metropolitan area. |
Financing objective:
This transaction helped the municipality expand its access to market-based financing for implementing its high priority rail transit expansion program. Istanbul needs large investments in urban transport, particularly mass transit, over the medium term to sustain economic growth and private sector development. These investments cannot be financed by relying solely on the city’s traditional funding sources (internal cash generation and sovereign-guaranteed debt). |
The structure of the project :
The Project is the construction of the 22 kilometer long Kadikoy-Kartal metro rail line on the Asian side of Istanbul. IFC is providing an unsecured senior loan of up to Euro 50 million to the Metropolitan Municipality of Istanbul for this Euro 751million Project, in parallel with other financial institutions, as part of a Euro 526 million commercial bank facility.
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The outcome:
The Project will extend coverage of a clean, safe and efficient mode of public transit along a heavily congested traffic corridor, helping reduce travel times and carbon emissions. By connecting to the Bosphorus Tube Tunnel the Project will provide fast and convenient access to the European side of the city, helping improve overall urban mobility and access to jobs and social services. Daily ridership is projected to reach 450,000 by 2012.
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