Germany’s WestLB is leading a consortium of banks in lending around €280mn to the municipality of Istanbul to build the first metro system in the Asian half of the Turkish capital.

The loan is being covered by the World Bank’s political insurance arm Miga.

Specifically, Miga is covering non-honouring of sub-sovereign financial obligations.

The project is expected to be completed by December 2012.

“Miga’s non-honouring cover is a welcome addition to the risk mitigation instruments that banks can use,” says Turkekul Dogan, executive director at WestLB’s Istanbul branch.