Istanbul preparing international bond to fund infrastructure

Imamoglu said work was continuing on securing finance for a new waste incineration plant and a subway line between the Istanbul districts of Beylikduzu and Sefakoy

  
A money changer counts U.S. dollar bills, with Turkish lira banknotes in the background, at an currency exchange office in central Istanbul, Turkey, August 21, 2015. Photo for illustrative purposes.

A money changer counts U.S. dollar bills, with Turkish lira banknotes in the background, at an currency exchange office in central Istanbul, Turkey, August 21, 2015. Photo for illustrative purposes.

REUTERS/Murad Sezer

ISTANBUL- Istanbul's mayor said the municipality is working on a possible international bond to fund new infrastructure projects, a year after the Turkish city completed its first Eurobond issue.

"We are working both on a bond issue and our talks are continuing on foreign resources for new infrastructure projects with different instruments," Ekrem Imamoglu said when asked if a bond issue in international markets was being considered.

The municipality secured $580 million in Eurobond financing last year to fund the completion of four subway projects around Istanbul. The Eurobond, which has a maturity of five years and a 6.6% yield, saw demand of more than $2.4 billion.

Imamoglu did not say in the interview on Monday with Reuters, when the bond might be launched. His comments come as Turkey grapples with the fallout from a 45% plunge in the value of the lira against the dollar this year.

After last year's issue, Imamoglu said the city of 16 million people was only resorting to foreign financing after repeated requests to obtain funds from Turkish state banks failed. 

Imamoglu, from the main opposition Republican People's Party (CHP), took office in June 2019 after defeating the candidate of President Tayyip Erdogan's AK Party in the mayoral election.

He is seen by some as a potential contender to challenge Erdogan in the 2023 presidential elections, although he says he is only focused on his job as mayor.

After the election, Turkish state banks stopped extending loans to Istanbul, which was run for 25 years by Erdogan's AKP and its Islamist predecessor party, Imamoglu said previously.

Aside from the subway, the municipality has invested 500-550 million euros ($564-620 million) in other projects.

Last month it opened an 85 megawatt (MW) waste incineration and power station, a biomethanation plant to produce energy and fertiliser from food waste, and a water purification plant.

Imamoglu said work was continuing on securing finance for a new waste incineration plant and a subway line between the Istanbul districts of Beylikduzu and Sefakoy, which is expected to require a 1 billion euro investment.

He said the municipality aimed for the metro to carry 30% of the city's passenger traffic, up from a current level of 15%. ($1 = 0.8872 euros)

(Writing by Daren Butler; Editing by Alexander Smith) ((daren.butler@tr.com; +90-212-350 7053; Reuters Messaging: daren.butler.thomsonreuters.com@reuters.net))


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