Denizbank signs 80 million euro financing agreement with AFD
Posted by meb at November 29th, 2008
The French Development Agency (AFD) signed an agreement with Denizbank yesterday in İstanbul to provide 80 million euros in long-term credit to support municipal projects around the country.
Under the structure of the agreement, Denizbank will have to repay the credit within 12 years, and disbursements to various municipal governments need to be made over a four-year period. The financing is to go towards water, waste transportation and sanitation projects. The criteria on which financing will be provided will have a heavy focus on ecological components.
Significantly, the project specifies that a minimum of 60 percent of the 80 million euro credit will be allocated to smaller municipalities, which are often overlooked by financing projects. The agreement further stipulates that the maximum amount that is to be spent per project is 5 million euros, so as to maximize the number of projects that are to benefit.
“Our objective is to bring this finance package, which municipalities will use to improve the services they provide for the public, especially to the municipalities which have not had the chance to access these possibilities until today,” stated Denizbank President and CEO Hakan Ateş, addressing a panel and an audience, which included such guests as French Consul General in İstanbul Christine Moro and Régis Marodon, the chairman of the AFD group in Turkey.
Pointing to the significance of the environmental and “sustainable development” angles of the agreement, Ateş further stated: “Bringing environmental sensitivity to the forefront, we believe projects to be realized via this package will contribute to the quality of life in our cities. We are planning to spread our support in this field all around Turkey, combining the strength we gain from Dexia, the world leader in public and project financing, with our field experience in Turkey.” Emphasizing the “contribution to sustainable development” and the “social benefit” the project will bring.
The significance of the agreement was further emphasized by AFD Local Authorities and Urban Development Division Manager Louis-Jacques Vaillant, who said: “For the first time in Turkey, a big bank chose to take part in the financing of local authorities.” Unfortunately, obtaining long-term financing for infrastructural projects is increasingly difficult in times of liquidity dry-ups.
To date, Denizbank has funded more than YTL 1 billion in municipal financing projects around the country. Some of the more prominent projects the bank has financed include the İstanbul Municipality’s Kadiköy-Kartal subway project and İstanbul Transportation Authority (İETT) bus purchases. Belgium-based Dexia bought a 75 percent stake in Denizbank in 2006.
Speaking on the sidelines of the signing ceremony, Robert de La Rochefoucauld, a liaison officer from the AFD’s, noted that Turkey was a promising market for AFD’s work in developing municipal infrastructure and that the crisis would not affect AFD as it was a state-owned institution that was able to raise cheap credit. “Our phone is ringing off the hook these days,” he confessed, noting that while in the past private banks used to be angered by ADF “stepping on their flowers,” they are calling the group these days.
source: Today’s Zaman
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