Deutsche Bank’s Structured Trade & Export Finance (STEF) team has signed a transaction with the Turkish government, as part of a consortium of banks, to help finance critical infrastructure in the south of the country.

The bank will provide €440m of financing towards the construction of a 25km dual-purpose railway and highway tunnel in Hatay Province, a region that was badly affected by a series of earthquakes in February 2023.

The overall package saw eight banks provide financing to the tune of €1.5bn to Turkey’s Ministry of Treasury and Finance (the borrower). Deutsche Bank acted as one of the mandated lead arrangers, while the transaction was led by Société Générale as the coordinator, export credit agency (ECA) agent and facility agent.

Deutsche Bank put forward a significant commitment of the total loan amount provided by the eight-strong consortium, with €330m earmarked for a facility covered by Swedish ECA EKN (100% over a 21 year-tenor), and €110m in commercial facility (10-year tenor).

Moritz Doernemann, Deutsche Bank’s Global Co-Head of Structured Trade & Export Finance, commented: “This transaction highlights the value of ECA-covered financing in enabling long-term, strategic infrastructure investment and underscores Deutsche Bank’s continued commitment to Turkey. We’re proud to contribute to a project that is helping to drive economic growth and support regional resilience and recovery.”

The Hassa-Dörtyol project will see the construction of a 25km highway and railway tunnel – composed of a 1x1 single-line railway and 2x2 lanes highway – between the cities of Hassa and Dörtyol in Hatay, Turkey’s southernmost province.

The ambitious project will connect the strategic Port of İskenderun with key industrial zones in southeastern Anatolia by both road and rail, significantly reducing transport times and unlocking new potential for regional logistics and trade.

It is being overseen by AYGM, the General Directorate of the Infrastructural Investment of Turkey, while it will be executed jointly by Turkish EPC contractors Doğuş Insaat and Eze Insaat.

The initiative is an important step in rebuilding and strengthening earthquake-resistant infrastructure in the wake of the devastating earthquakes that struck the region on 6 February 2023. Hatay was the hardest hit region in the country, with around 50% of its population displaced, and widespread damage to infrastructure.

In addition to shortened transport times and improved access between the Port of İskenderun and important regional industrial zones, it is hoped that Hatay’s tourism industry will also benefit. The growth of the Port of İskenderun is also expected to boost economic development in the years to come.