Canakkale Bridge PPP ECA-backed facility signed
Canakkale Otoyol ve Koprusu Insaat Yatırım ve Isletme – a consortium comprising Daelim, SK Engineering, Limak and Yapi Merkezi – has raised €2.265 billion ($2.81 billion) of partially ECA-backed 15-year debt to finance the Canakkale 1915 Bridge PPP project in Turkey. Signed today, the deal was oversubscribed to €3.6 billion and finished on €1.582 billion of commitments from foreign lenders (including a €300 million Islamic tranche) and €683 million of uncovered debt from Turkish banks.
The 21.5-year DBFOM concession (inclusive of 5.5-year construction period) involves building a 3.7 km six-lane suspension bridge as part of the Malkara-Canakkale section of the 324 km Kinali-Tekirdag-Canakkale-Savastepe highway. At completion, the $3.5 billion project will be the longest suspension bridge in the world with a 2023 metre main span and 318 metre towers.
Given the scale of the funding requirement and the number of parties involved – 24 banks and financial institutions from 10 countries – the project financing closed in a short arranging period, just seven months since the request for proposals was launched to banks in August 2017.
The 15-year debt, which includes a five-year grace period during construction, is underpinned by the Turkish government’s debt assumption model and a minimum traffic guarantee of 45,000 vehicles per day. The traffic guarantee, provided by the General Directorate of Highways (KGM), has a tenor of 16-years-and-one-month, leaving a one-year tail beyond the tenor of the debt and effectively making the concession availability-based. Toll revenues are also pegged against the euro, giving lenders further comfort.
The Korean sponsors in the project (Daelim and SK Engineering) attracted significant ECA backing from Kexim and K-Sure which provided €600 million and €400 million respectively in guarantees and direct loans. EKF is also providing cover for the project, and Islamic Corporation for Insurance of Investment and Export Credit (ICIEC) is guaranteeing the €300 million Islamic tranche, €200 million of which is being provided by Kuwait Finance House.
The full lender and guarantor line-up comprises: Kexim, EKF, K-Sure, ICIEC, Korea Development Bank Bank of China, Deutsche Bank, DZ BANK, KEB Hana Bank, ICBC, ING, Intesa SanPaolo, Kuwait Finance House, Kuveyt Turk Katilim Bankasi , Natixis, Shinhan Bank, Siemens Bank, Standard Chartered (also financial adviser), Akbank, Finansbank, Garanti Bank, Isbank, Vakıflar Bank and Yapı Kredi.
