The United Kingdom’s export credit agency Monday announced it has underwritten about 781 million euros (around $866 million) of financing to support the construction of a new high-speed electrified railway across southern Türkiye.
The funding provided through U.K. Export Finance’s Buyer Credit Facility, one of Türkiye’s top conglomerates Rönesans Holding will finish construction of the Mersin-Adana-Gaziantep High-Speed Railway on behalf of the Transport and Infrastructure Ministry, UKEF said in a statement.
The completion of the 286-kilometer (177.7-miles) railway connects Mersin with the cities of Adana, Osmaniye and Gaziantep. It will offer a lower-emission transport link connecting Türkiye’s second-largest container port with inland cities over 150 miles away – expected to reduce CO2e emissions by over 150,000 tons a year.
The U.K.-government-backed deal is foreseen to create new multimillion-dollar export contract opportunities for the British infrastructure, engineering and project management sectors, the statement said.
"Mersin, Adana and Gaziantep are among the highly industrialized and important cities of the region with their deep-rooted cultural heritage. This project will ensure a reduction of transportation costs, decrease travel time between Mersin and Gaziantep and strengthen our railway connectivity," said Mehmet Şimşek, Türkiye's treasury and finance minister.
"In this regard, this project is crucial for economic, social and environmental integration," Şimşek was cited as saying in the statement. "The most important aim of the project is to improve the rail connectivity and create a sustainable alternative transportation scheme in Türkiye."
The announcement comes days after the U.K. said it intends to launch talks with Türkiye on a new, modernized free trade agreement to strengthen further the already-booming trade ties to include services and the digital sector in any future deal.
"The U.K.-Türkiye trading relationship is going from strength to strength. Last year, U.K. exports to Türkiye reached 8.5 billion pounds, and this week we announced plans for an updated trade deal that will further boost exports and imports between our countries," Malcolm Offord, the U.K. minister of exports.
"UK Export Finance’s backing for this transformative high-speed railway adds to this success story. This deal shows that the U.K., home to the world’s first railway system, still moves full steam ahead with its export of railroad innovation and expertise," Offord noted.
The funding has been provided on the condition that U.K. exporters supply to the project, the statement said. Rönesans Holding has already engaged with British suppliers to negotiate contracts for electronic infrastructure, ESG consultancy services, catenary and mechanical components.
To secure the deal, UKEF said it worked in partnership with JPMorgan, ING Bank and BNP Paribas, who provided the loan. SACE and OeKB, the Italian and Austrian export credit agencies, are providing reinsurance, it added.
"By upgrading the existing railway line to a high standard railway line, we will be actively reducing negative environmental impact while offering a lower-carbon travel alternative and significantly enhancing the region's industrial connectivity and trade," said Erman Ilıcak, president of Rönesans Holding.
Ilıcak stressed the "fruitful collaboration" adds "tremendous value to the cooperation between Türkiye and U.K. exports and services while paving the way for exciting global partnerships."
In replacing the current railway, which relies on diesel locomotives, the electrified line will provide a lower-carbon alternative to existing routes between Mersin and Gaziantep. Project forecasts suggest that the completed route will save 157,000 tonnes in CO2e emissions in its first year alone.
The UKEF-backed project will also contribute directly to Türkiye’s objective of increasing high-speed railway coverage to 10,000 kilometers.
Able to carry trains traveling up to 200 km/h, the transport link is a major step forward for regional infrastructure and growth. The high-speed railway will reduce the travel time from Gaziantep – via regional cities Adana and Osmaniye – to Mersin by four hours. Mersin is the second-largest container port in the country and a city of over one million people.
Gaziantep, the railway’s eastern terminus, was near the epicenter of the devastating 7.8 magnitude earthquake that struck Türkiye in February 2023. The UKEF said the project for completing the railway would also contribute to reconstruction in Gaziantep, Osmaniye and other areas of southern Türkiye severely damaged by the disaster.