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Istanbul tunnel funding ready for first quarter
ISTANBUL - Bloomberg
Friday, October 22, 2010
The funding for a $1.2 billion tunnel under Istanbul’s Bosphorus strait will be ready by the end of the first quarter, a group which was awarded the project said.
About $850 million of the financing will come from lenders and the rest will be equity provided by the project’s investors, said Başar Arıoğlu, managing director at Yapı Merkezi, which is leading the project.
“We are now doing the engineering study and we will begin the construction once the finance contract is completed, which we expect to close in the first quarter,” Arıoğlu said in an interview on Thurday at a conference arranged by UniCredit.
The project incorporating a 15-kilometer (9.4-mile) road with a 5-kilometer stretch of tunnel will ease car traffic on two suspension bridges joining the city’s European and Asian sides serving the 12-million population. South Korea’s SK Holdings’ SKEC, Kukdong Engineering & Construction, Samwhan, Hanshin Construction and Namkwang Engineering & Construction are working with Istanbul-based Yapı Merkezi on the tunnel.
UniCredit is advising for the project on financing. Lenders for the project include the European Investment Bank, European Bank for Restructuring and Development, Sumitomo, ING Groep, Standard Chartered, WestLB, Yapı Kredi Bank, Garanti Bank, İşbank, Türkiye Sinai Kalkınma Bankası and some South Korean lenders, Arıoğlu said.
Financial investors in the project include infrastructure funds and negotiations with them are continuing, he said. The consortium plans to complete the construction of the peripheral roads and the tunnel in 4 ½ years and operate the toll tunnel for 26 years, the executive said.
The group has also completed an environmental impact assessment, carried out by Environmental Resources Management as sought by lenders, Arıoğlu said.
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