|Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature.|
The proposed project is the privatization of Bandirma Port in Turkey under a transfer-of-operating-rights scheme for a period of 36 years (Project). Following a competitive tender, Celebi Joint Venture Group was named preferred bidder in May 2008, offering an upfront operating rights fee of $175.5 million.
Unicredit AG (Unicredit) of Germany and Troy AB (Troy) of Sweden have approached MIGA for guarantees for their respective $58 million loan and $580,000 equity investment in the Project. MIGA is proposing to provide guarantees against the risks of transfer restriction (inability to transfer and inconvertibility) and expropriation of funds for a period of 14 years.
The proposed project represents an ongoing process of privatization started by the government of Turkey in the early 1980s. It aims to introduce openness and competitiveness into the country, increase efficiency in former state-owned enterprises and promote economic growth.
The project is a Category B under MIGA’s environmental review procedures. Click here to view the Environmental and Social Review Summary.
The privatization of Bandirma Port will introduce a new and experienced management team and best market practices that will improve productivity and efficiency of the port. In turn, this will strengthen the competitiveness of local exporters in the hinterland by decreasing transportation costs. In particular, better port operations will further stimulate the growth of the region’s automotive manufacturing industry as a hub for Central and Eastern Europe. The local economy will also benefit from improved connectivity to international markets, a key infrastructure requirement to attract foreign direct investment. Finally, the new operators of the port will introduce higher standards of operation, including environmental and safety rules in line with national and European Union guidelines.
The proposed project is also aligned with the World Bank Group’s Country Partnership Strategy for Turkey. Improving transportation infrastructure is a key component of the Bank Group’s focus on helping Turkey improve its competitiveness and employment opportunities.