Turkey, South Korea JV Is Said to Raise $2.8 Billion for Bridge

(Bloomberg) -- A consortium of South Korean and Turkish construction firms are raising 2.3 billion euros ($2.8 billion) from a group of about 20 banks and an export credit agency to build a suspension bridge and toll roads in western Turkey, people familiar with the matter said.

The joint venture between Daelim Industrial Co. Ltd., SK Engineering & Construction Co. Ltd., Limak Holding AS and Yapi Merkezi AS will raise about half of that amount from banks, said the people, asking not to be identified because the talks are private. South Korea's Export-Import Bank will provide the export credit agency portion of the financing for the 3.1 billion-euro project, they said.

Industrial & Commercial Bank of China Ltd., Bank of China, Intesa Sanpaolo SpA and Siemens Bank GmbH are among international lenders on the loan that's expected to be signed in mid-March, the people said. Six Turkish banks including Turkiye Is Bankasi and Turkiye Garanti Bankasi will also provide the loan, they said.

The South Korean and Turkish construction joint venture last March signed a contract with Turkey's highway and toll road authority to build a 2,023-meter-long suspension bridge across the Dardanelles strait and about 80 kilometers of connecting roads. The group will operate the infrastructure for just over 16 years before transferring it to the government.

Government Guarantee

Bank of China said it's preparing to lend to the project, but that “the lending amount is not yet certain.” Isbank said it's considering to take part in the project and financing negotiations are “continuing.”

Canakkale Otoyol ve Koprusu Insaat Yatirim ve Isletme AS, as the construction joint venture is known, declined to comment. Intesa SanPaolo, ICBC and Garanti also declined to comment. Siemens Bank didn't immediately respond to requests for comment.

Turkey's highway and toll road authority is offering guarantees for the project if traffic over the bridge falls below 45,000 vehicles a day. The Turkish treasury is also guaranteeing borrowings on the development, according to the terms of the project.

To contact the reporter on this story: Ercan Ersoy in Istanbul at eersoy@bloomberg.net.

To contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, Jon Menon

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