The International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA), members of the World Bank Group, have helped raise nearly €72mn in financing for an extension of Izmir’s light rail network.

IFC acted as lead arranger of the financing, providing a €12mn loan, while MIGA acted as guarantor of a €23.5mn parallel loan provided by ING Bank. The French Agency for Development (AFD) and the European Bank for Reconstruction and Development (EBRD) provided the remaining loans. The financing will be used to acquire 85 light rail transit vehicles, adding capacity as new stations are opened and encouraging public transport use in the municipality.

“We have been co-operating with these two World Bank Group institutions, IFC and MIGA, since 2012, which reflects the confidence of Izmir metropolitan municipality,” says Aziz Kocaoglu, mayor of Izmir.

IFC invested €55mn and co-ordinated a further €110mn for two urban tram lines in March 2014; MIGA issued €66.9mn in guarantees to the commercial lenders on this project. IFC also co-ordinated a financing package of €111mn for the Sea Transportation project in May 2013, where MIGA issued guarantees to ING Bank for €50.3mn. In addition, IFC co-ordinated a financing package of €45mn for the municipality’s Traffic Management and Emergency Response project in December 2012.

Wiebke Schloemer, IFC’s regional industry head of infrastructure in Europe, Middle East and North Africa, comments: “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, says: “We are proud to be a part of the urban transformation of the city through this and two other projects in the 2013/15 period. This is fully in line with our strategy on sustainable lending and also builds upon the impeccable co-operation with MIGA and World Bank Group.”

IFC and MIGA have actively supported private sector development in Turkey, with a US$4.3bn outstanding portfolio and US$1.1bn in outstanding exposure respectively.