Scunthorpe’s steel rails could form part of the UK government’s biggest-ever sustainable civil infrastructure deal, which will help fund a high-speed electric railway line in Turkey, with major contracts awarded to British and Turkish companies.
The €2.1 billion green financing will be guaranteed by UK Export Finance, through its Buyer Credit Scheme, with Credit Suisse and Standard Chartered structuring and coordinating the banks arranging the transaction.
It is the first UK-backed rail transaction in Turkey in over 160 years and is part of Turkey’s plan to transform high-speed rail in the country.
The new 503 km electric railway line will connect the capital Ankara to the huge port city of Izmir. Once completed, the new line will provide a faster, low-carbon alternative to current air and road connections between the two cities, helping to meet Turkey’s climate change commitments made at COP26.
International Trade Secretary Anne-Marie Trevelyan said: “Turkey is a vital trading partner for the UK. Our shared global vision of free trade and the environment is driving the economic growth of our two countries.
“It’s only fitting that the largest civil infrastructure contract ever awarded by UK Export Finance is highly sustainable. It’s a proud moment for Britain’s rail industry, which is using its industrial roots to cut emissions in heavily polluted cities.
Turkey is one of the UK’s most important independent trading partners. The bilateral trading relationship was worth £17.5 billion in the four quarters to the end of the third quarter of 2021, up £1.4 billion from the same period in 2020.
The deal will secure major contracts for UK companies of all sizes to supply to the project, with several nine-figure deals for UK companies set to close. Engineering and construction giants ERG International Group are using its close links to the UK supply chain to support the project. British companies are expected to supply British-made railway lines, switches, switches, fixings, hardware and equipment for signaling, telecommunications and electrification systems, as well as vital insurance services and freight.
The financing was led by Credit Suisse and Standard Chartered Bank with support from UK Export Finance and meets internationally recognized sustainability standards and is in line with green lending principles. Reinsurance is also provided by international export credit agencies such as SACE in Italy, SERV in Switzerland and OeKB in Austria, reducing the risk to the UK taxpayer.