Consortium signs 4.5-billion-euro loan deal with six banks for Istanbul’s third airport project

ISTANBUL

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A total of six banks will provide 4.5 billion euros ($5.11 billion) to a consortium involving five Turkish construction companies that will carry out the construction of what is expected to be the third airport in Istanbul with a capacity of 150 million passengers. 

The Istanbul Grand Airport (IGA) consortium, which won a tender in 2013 to build Istanbul’s new airport, inked a loan agreement on Oct. 19 with six banks, namely state-run Halkbank, Ziraat Bankası and Vakıfbank as well as foreign-financed Turkish banks DenizBank, Garanti Bankası and Finansbank, to provide a sum of 4.5 billion euros for the first leg of the project.

The consortium included Turkish companies Cengiz, Mapa, Limak, Kolin and Kalyon.

According to the agreement, the loan maturity date has been set at 16 years. 

6 bln euros in investment for first leg

A total of 6 billion euros of investment has been planned for the first leg of the construction period. While some 4.5 billion euros of this investment will be made through the deal, the remaining one-fourth will be provided on the consortium’s equity, according to the follow-up press release. 

The first stage of the project is planned to be completed by 2018.

Speaking at the signing ceremony in Istanbul, Turkish President Recep Tayyip Erdoğan said construction would consist of four legs in total, the final of which would end in 2028.

Erdoğan noted the first leg of construction would result in the partial opening of the airport in the first quarter of 2018. “[The project] will provide additional employment for approximately 80,000 [people] annually during the construction period,” he said, as quoted by Anadolu Agency
 
“This figure will increase to 120,000 people when the airport fully comes into service,” he added. 

The Turkish president said that once the new airport’s construction was completed, it would be one of the largest in the world in terms of passenger capacity.

Istanbul’s third airport, after Atatürk Airport and Sabiha Gökçen Airport, is being built in the northwestern part of the city on the European side of Istanbul.

According to the IGA website, the airport will contribute 22.2 billion euros ($25.1 billion), in addition to value-added taxes, to the state over 25 years.

With the loan deal, the banking sector’s total project financing volume has reached 300 billion Turkish Liras, said Banks’ Association of Turkey (TBB) head and Ziraat Bankası CEO Hüseyin Aydın in a speech during the ceremony, as quoted by Reuters. 

Prime Minister Ahmet Davutoğlu was also in attendance at the ceremony.

Turkey to hold tender for regional airport in Çukurova

The General Directorate of State Airports Authority (DHMİ) has announced that a tender will be held for the construction of the Çukurova Regional Airport in southern Turkey, using a build-operate-transfer model. 

The tender will be held upon closed bidding method at 10.00 a.m. on Jan. 15, 2016 at the DHMİ headquarters, according to the announcement, which was released in the Official Gazette on Oct. 19. 

All interested bidders are expected to pay 1 million euros in bidding security, or its Turkish Lira equivalent upon the Central Bank foreign exchange sale prices, on the first bidding date.