The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

Turkey looks to diversify infrastructure debt

The country’s banks will not be able to shoulder the debt burden of its planned infrastructure programme. But palatable alternatives that don’t involve government guarantees aren’t yet ready, so for the foreseeable future, debt refinancing of projects is confined to after construction.

Capital ratio constraints have kept foreign banks out of the Turkish infrastructure boom since 2008 for anything other than ECA or multilateral guaranteed projects. But the Turkish government is making great efforts to pull them back in and diversify the country’s infrastructure funding options for what is a vastly ambitious investment programme designed to double Turkey’s $820 billion economy in the next decade.

Some international project lenders still have a footprint in Turkey. UniCredit owns 50% of Yapi Kredi and maintains a presence in its own right. ING and Société Générale also remain in the local market, and Sberbank is present via Deniz Bank, which it bought from Dexia in 2012.

In addition, foreign project lenders have been peddling the concept of miniperms to the Turkish project market, but with little success. Sponsors are unwilling to take on the refinancing risk, probably a wise move given the volatility of Turkish lira, project income streams and that project borrowing is normally in euros or dollars.

Of the foreign lenders still on the ground, only UniCredit, primarily through Yapi, and Sberbank are active lenders for projects that do not come with heavy ECA or multilateral backing, or internationally recognised project sponsors with solid creditworthiness.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree