Izmir, Turkey, July 15, 2015 — The International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA), members of the World Bank Group, are helping finance an extension of Izmir's light-rail network, furthering their joint effort to work with the municipality to improve public transport and build a sustainable city.
As the lead arranger of the financing, IFC provided a €12 million loan and mobilized another €23.5 million through MIGA's involvement as the guarantor of a parallel loan provided by ING Bank. Other parallel lenders, the French Agency for Development (AFD) and the European Bank for Reconstruction and Development (EBRD) are also providing loans.
The finance package, nearly €72 million total, will support Izmir Metropolitan Municipality's effort to increase metro ridership through the acquisition of 85 light-rail transit vehicles, adding capacity as new stations are opened.
Izmir, Turkey's third largest city and its main port on the Aegean Sea, is a vibrant city with nearly four million inhabitants. Izmir Metropolitan Municipality is the government body responsible for providing infrastructure services to the area, and maintains a strategic relationship with the World Bank Group.
"We have been cooperating with these two World Bank Group Institutions, IFC and MIGA, since 2012, which reflects the confidence of Izmir Metropolitan Municipality," said Aziz Kocaoglu, Mayor of Izmir Metropolitan Municipality. "We will continue to invest for the development of Izmir. We look forward to having more cooperation with the World Bank Group."
IFC previously invested €55 million and coordinated a further €110 million for two urban tram lines in March 2014; MIGA issued €66.9 million in guarantees to the commercial lenders on this project. IFC also coordinated a financing package of €111 million for the Sea Transportation project in May 2013, where MIGA issued guarantees to ING Bank for €50.3 million. In addition, IFC coordinated a financing package of €45 million for the municipality's Traffic Management and Emergency Response project in December 2012.
"We are pleased to continue supporting Izmir's vision of becoming a sustainable city and a model to other parts of the country," said Keiko Honda, MIGA's Executive Vice President and CEO.
Wiebke Schloemer, IFC's Regional Industry Head of Infrastructure in Europe, Middle East and North Africa region, said: "By supporting further development of the city's infrastructure, these projects will promote local economic growth. This investment is part of IFC's strategy to step up its support to local governments in Turkey by providing access to long-term financing and helping implement urban infrastructure projects that improve the lives of Turkish citizens."
Bart Ponsioen, Director, Structured Export Finance at ING in Germany, said: "We are proud to be a part of the urban transformation of the City through this and two other projects in the 2013-2015 period. This is fully in line with our strategy on sustainable lending and also builds upon the impeccable cooperation with MIGA and World Bank Group."
IFC and MIGA have actively supported private sector development in Turkey, with a $4.3 billion outstanding portfolio and $1.1 billion in outstanding exposure respectively.
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in about 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and boost shared prosperity. In FY14, we provided more than $22 billion in financing to improve lives in developing countries and tackle the most urgent challenges of development. For more information, visit www.ifc.org
MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment into emerging economies to support economic growth, reduce poverty, and improve people's lives. MIGA fulfills this mandate by offering political risk insurance and credit enhancement to investors and lenders. For more information visit www.miga.org.
Mallory Saleson, MIGA
Tel: +1 202 473-0844
Cara Santos Pianesi, MIGA