19 February 2018
Clifford Chance advises the lenders on Turkey's mega project, the North Marmara Motorway
Clifford Chance has acted as international legal counsel to the lenders in respect of the financing of the design, construction, operation, maintenance and repair of the Kınalı-Odayeri and Kurtköy-Akyazı sections (including access roads) of the Northern Marmara Motorway procured by the General Directorate of Highways of Turkey under the build-operate-transfer model.
Connecting the Third Bosphorus Bridge, Gebze-İzmir Motorway (Osmangazi Bridge) and the 1915 Çanakkale Bridge & Motorway, the project will form a significant transportation link in Turkey's largest city, Istanbul and provide a shorter and faster route inside and outside Istanbul by linking strategic hubs in the Marmara region.
The motorway will stretch over more than 270 kilometres with Kınalı-Odayeri section running approximately 90 kilometres on the European side and Kurtköy-Akyazı section running approximately 180 kilometres on the Asian side. Each section is further split into three sub-sections, Kınalı-Yassıören, Yassıören-Odayeri, Habipler-Hasdal on the European side and Kurtköy-Dilovası, Dilovası-İzmit and İzmit-Akyazı on the Asian side.
The project is being sponsored by key market players in the construction sector in Turkey, Cengiz İnşaat Sanayi ve Ticaret A.Ş., Limak İnşaat Sanayi ve Ticaret A.Ş., Kolin İnşaat Turizm Sanayi ve Ticaret A.Ş., Kalyon İnşaat Sanayi ve Ticaret A.Ş., RSY İnşaat Sanayi ve Ticaret A.Ş., Pak Yatırım İnşaat Sanayi ve Ticaret A.Ş..
The financing was arranged by offshore branches of leading Turkish banks, Türkiye Garanti Bankası A.Ş., Türkiye İş Bankası A.Ş., QNB Finansbank A.Ş., T.C. Ziraat Bankası A.Ş., Türkiye Halk Bankası A.Ş. and Türkiye Vakıflar Bankası T.A.O. with a total loan amount of USD 2.674 billion – USD 1.634 billion allocated to Kurtköy-Akyazı section and USD 1.040 allocated to Kınalı-Odayeri section.
The project is unique in being the first of its kind under new debt assumption legislation that includes risk sharing arrangements between the sponsors, financiers and the Undersecreteriat of Treasury of Turkey.
Clifford Chance's team was co-led by Singapore based partner Nicholas Wong and Istanbul based partner Jared Grubb, assisted by Gokce Uzun (Istanbul). Key members of the cross-border team include London based partner David Metzger who provided construction related legal advice, assisted by senior associate Warwick Lindsay (Singapore) and associate Tom Ward (London).