Turkish energy developer Çalık Enerji has secured a near US$600mn guarantee package from Commerzbank and Switzerland’s export credit agency (ECA) to build a power plant in Turkmenistan.

Under the agreement, Commerzbank is providing Çalık Enerji’s Swiss subsidiary with a guarantee line of US$586mn for the construction of a 1574MW gas-steam plant in the Central Asian country.

The unfunded facility has a 40-month tenor, and during this period Commerzbank is extending a contract bond on behalf of Calik Enerji to the beneficiary, Turkmenistan’s state power corporation.

Swiss Export Risk Insurance (Serv) is supplying a counter guarantee underwriting approximately 50% of the total facility, propping up power equipment exports from Switzerland.

Naci Can, director of project finance and treasury director at Çalık Enerji and a board member of Çalık Swiss, says “the eligibility for Serv’s participation is twofold”.

“We are procuring a lot of equipment from GE Switzerland for the project in Turkmenistan including gas and steam turbines as well as generators and heat recovery system generators.”

“Çalık Swiss’ growing presence and operational footprint in Switzerland was another important factor,” Can tells GTR.

“It is a testament that even in this global environment, Turkish global engineering, procurement and construction contractors are able to tap into these global banks, working with ECAs, supporting their growth internationally. It is a very large size for a single bank to underwrite,” he says.

Çalık Enerji started construction of the power plant in late 2023 after winning the public tender in October.

According to Watson Farley & Williams, one of the advising law firms, the deal is set to bolster Turkmenistan’s power sector and help the country replace “old technology” plants.

“We are pleased to have advised our long-standing client, Calik Enerji, on this groundbreaking international structured finance transaction, which will make a significant contribution to reducing CO2 emissions in Turkmenistan,” says Riko Vanezis, a partner at WFW.

Baker McKenzie acted as the sole legal counsel to Commerzbank on all Swiss law aspects of the transaction.

Çalık Enerji is active in engineering, procurement and construction contracts in the energy sector, utilities, and renewable energy investments.

Last year, the Istanbul-headquartered firm secured a €40mn facility covered by Italian export credit agency Sace designed to help the company boost procurement from Italy.