Izmir Metropolitan Municipality signed a foreign financing agreement of 125 million Euros with the French Development Agency (AFD) after the European Bank for Reconstruction and Development (EBRD) for the Üçyol-Buca Metro, which will be the largest investment in the city's history.
The foreign financing agreement with a total maturity of 12 years, without Treasury guarantee, 4 years of which is with no principal repayment, was signed by Izmir Metropolitan Municipality Mayor Tunç Soyer and France's Ambassador to Turkey Herve Magro and AFD Balkans, Middle East and Asia Director Philippe Orliange.
Izmir Metropolitan Municipality Mayor Tunç Soyer, Buca Mayor Erhan Kılıç, France's Ambassador to Turkey Herve Magro, French Development Agency's Balkans, Middle East and Asia Director Philippe Orliange, Izmir Metropolitan Municipality General Secretary Dr. Buğra Gökçe, Izmir Metropolitan Municipality Deputy Secretary General Eser Atak, Izmir Metro A.Ş General Manager Sönmez Alev, Izmir Metropolitan Municipality Purchasing Department Head Övünç Özgen, French Development Agency Turkey Deputy General Manager Emilie-gang Huang, AFD Urban Development Senior Project Manager Ali Doğan Şalva attended the signature ceremony.
Speaking at the ceremony, Izmir Metropolitan Municipality Mayor Tunç Soyer emphasized that Izmir received very little investment from central resources, but that they were determined to solve the city's infrastructure needs with the possibilities of the Metropolitan Municipality. Reminding that even in such a difficult period, they continue to work with international financial development institutions for the biggest and most important project in Izmir's history, Buca Metro, and for other projects, Izmir Metropolitan Municipality Mayor Tunç Soyer said, “Today, I am happy to approach one step further towards the realization of Buca Metro, the most important investment of our city. Despite the unfavourable economic conditions both in our country and in the world, our municipality's provision of this great financing under very favourable conditions is an indication of the world's trust in Izmir. As it is known, within the scope of the building and construction part of the Buca Metro Project, we signed a foreign financing agreement with the European Bank for Reconstruction and Development (EBRD) in the amount of 125 million Euros last July. Now, we are proud and happy to sign a financing agreement with the French Development Agency of 125 million Euros, with a total maturity of 12 years, without Treasury guarantee, 4 years of which is with no principal repayment.”
At the beginning of 2022, the pickaxe will be shot.
Izmir Metropolitan Municipality Mayor Tunç Soyer stated that the construction tender for the Buca Metro has been made and the review process continues, and said, “We are planning to announce the result of the tender on 15 December. In the first days of January, we will experience the pride of laying the ground breaking together.”
“It will set an example for what the two countries will do”
Stating that she is very happy that France supported this project with the participation of AFD, France's Ambassador to Turkey Herve Magro said, “This project is primarily aimed at providing a reliable, accessible and inclusive transportation experience for city residents of all ages, genders, socio-economic status and physical abilities. Therefore, it is a socially beneficial project. Secondly, it will increase city residents' access to key points of interest such as universities, healthcare facilities and recreational areas in a more seamless and efficient manner, thereby saving significant time. Third, the Buca Metro will contribute significantly to Izmir's carbon footprint targets by reducing carbon emissions harmful to the climate, and to Izmir's air pollution targets by reducing other atmospheric pollutants harmful to public health. In short, this project is an example of what two countries can achieve when our institutions work in harmony. Dear Izmir Metropolitan Municipality Mayor, I hope we will have more opportunities to develop projects of this quality soon. You can count on the constant support of the French Embassy in Ankara and the French Consulate General in Istanbul.”
“Izmir is one of our most important partners”
Reminding that the majority of the world's population prefers to live in cities, Philippe Orliange, Balkans, Middle East and Asia Director of the French Development Agency, said, “Turkey is rapidly urbanizing. For this reason, a large number of investment needs arise from infrastructure to superstructure. Izmir is one of our most important partners. This is our fifth loan agreement that we have implemented in Izmir. The fact that we are signing contracts without Treasury guarantee shows the financial strength of Izmir for AFD.” Referring to the importance of rail system investments for the global climate struggle, Orliange said, “The climate struggle is an important step for both Turkey and the world. It is very valuable that this project comes to life after the Glasgow Summit, where Mr. Mayor made a remarkable speech. I cannot imagine what it would be like to be the mayor of a city with more than 4 million inhabitants. In this sense, I congratulate you for the socio-cultural investments you have made, your strong economic policy management and the strong diplomacy you have established with France.”
Strong corporate structure
Soyer also answered the questions of journalists at the ceremony. Noting that the municipality had a foreign debt of 790 million Euros when he took office on March 31, 2019, Tunç Soyer said, “Our municipality, affiliates and companies had a foreign debt of 790 million Euros when we took office on March 31, 2019. This escalated to 923 million Euros at the end of October 2021. In other words, there is a total of 17 percent borrowing in foreign currency. But in the same period, we also made a debt payment of 351 million Euros. Moreover, this is the period of the pandemic and earthquake. The reason why I say these is to show that Izmir Metropolitan Municipality has a very safe and secure budget. This is actually a resilience brought by life and the political conjuncture, the ability to stand on one's own feet for 20 years. The will to not be destroyed no matter what the conditions are, to continue to develop and move the city forward, and the institutional structure formed in relation to this. So of course we are affected. The Euro, which was 6.24 TRY at the end of March 2019, is 12.34 TRY on November 18, 2021. There is an increase of 97 percent in between,” he said.
Stating that Izmir Metropolitan Municipality has an additional debt burden of 3.1 billion Turkish Liras due to this exchange rate increase, Soyer said, “When we look at it in terms of Euro, there is a sustainable and stable debt picture with an increase of 17 percent. In summary, as an institution that has managed to maintain this despite all this picture and the difficulties Turkey is going through, I am proud of both my colleagues and the strong structure of the institution. If it were otherwise, we wouldn't be signing this today. If we can sign this today, it is a work created by mutual trust. Therefore, we do not have any anxiety or fear. We are walking in a way that we can build the future better.”