Category A Project Supported: Ankara-Izmir High Speed ​​Railway Project, Turkey

1. Project description

UK Export Finance has agreed to provide support to the Department of Treasury and Finance in relation to the supply of goods and services by ERG International UK Ltd to the Department of Transport and Infrastructure for the construction and operation of a train 503.2 km high-speed train (HSR) connecting Ankara, the capital of Turkey, to Izmir (the Project).

One of the main objectives of the project is to improve the efficiency and adequacy of the transport system in the region by addressing the poor rail connectivity and the lack of sustainable alternative modes of transport. It is designed to reduce road traffic congestion and promote socio-economic development, which aims to support tourism in Izmir and economic opportunity.

The project includes:

  • Construction of a double-track high-speed line

  • Construction of underpasses and overpasses

  • Construction of bridges, tunnels and viaducts

  • Construction of stations and branch lines

  • Housing for temporary workers

  • Associated facilities, including quarries

2. Project sector

The project is in the transport sector.

The project is developed by the Ministry of Transport and Infrastructure

4. UK exporters

ERG International UK Ltd

5. Export Credit Officer Bank

Swiss credit

6. Amount of UK export finance support

The main value of the aid is around 2.13 billion euros.

seven. OECD Common Approaches and Equator Principles

UK Export Finance has classified the project as Category A, i.e. having potentially significant environmental, social and human rights (ESHR) as defined in the OECD Common Approaches to Officially Supported Export Credits and Environmental and Social Due Diligence of 2012 (revised 2016) (the “OECD Common Approaches” ) and the Equator Principles (2020).

As required by the OECD Common Approaches, UK Export Finance has disclosed its possible involvement in the project. A notification was posted on the UK Export Finance website on September 1, 2021 which directed interested parties to the contact hence the post ESHR information can be sourced. UK Export Finance received no comments from interested parties.

8. Environmental, social and human rights standards

Project related ESHR documentation was reviewed for alignment with the 2012 International Finance Corporation (IFC) Performance standards (PS) on environmental and social sustainability and the World Bank Group on environment, health and safety (EHS) Guidelines.

If applicable IFC PS were:

  • PS1: Assessment and Management of Environmental and Social Risks and Impacts

  • PS2: Work and working conditions

  • PS3: Resource Efficiency and Pollution Prevention

  • PS4: Community Health, Safety and Security

  • PS5: Land Acquisition and Involuntary Resettlement

  • PS6: Conservation of Biodiversity and Sustainable Management of Living Natural Resources

  • PS8: Cultural heritage

The relevant World Bank Group EHS The guidelines were:

  • General EHS Guidelines (2007)

  • EHS Guidelines for the extraction of building materials

  • EHS Guidelines for Railways

9. Kind of ESHR impacts

The examination of the potential ESHR risks and impacts considered the following impacts, receptors and issues during the construction and operation phases of the project:

  • physical and economic displacement

  • critical habitats

  • occupational health and safety

  • emissions to air (including soil, air and water)

  • atmospheric and sound impacts

  • Wastewater

  • waste and hazardous materials management

  • emergency planning and response

  • construction camp conditions

  • grievance mechanisms

  • community engagement.

ten. Evaluation of ESHR impacts

A review was undertaken in accordance with the requirements of the OECD Common Approaches and the Equator Principles to identify ESHR the risks and impacts of the project and how these would be effectively managed.

A review of project documentation by an independent environmental and social consultant (IESC), was also undertaken.

The review included:

  • site visit

  • desk review of project documentation: environmental and social impact assessment (ESIA), environmental and social management plans (ESMPs), including resettlement action plans (RAPS) and a resettlement policy framework , a Climate Change Risk Assessment (CCRA), a Biodiversity Management Plan (BMP) and a Critical Habitat Assessment (CHA); and a Stakeholder Engagement Plan (SEP)

  • follow-up meetings and interviews with relevant project representatives

  • a multi-stakeholder workshop in Ankara.

The results of this review formed the basis for the assessment of the project’s alignment with relevant international standards and recommendations for future compliance and monitoring.

Based on the review, the project was found to be likely to cause a number of adverse environmental and social impacts both during construction and operation. However, a series of controls proposed as part of the Project’s environmental and social management systems should facilitate the management of these impacts.

11. Climate Change Considerations

UKEF has taken into account the direct and indirect greenhouse gas potential (GHG) the project’s emissions and the effects of climate change factors on the project as part of its ESHR exam.

The design of the project incorporates measures to improve efficiency, by their nature electric trains are more resource efficient than conventional trains which use diesel, a fossil fuel.

A climate change risk assessment, including consideration of physical risks and quantification of Scope 1 and 2 emissions during construction and operation of the Project, has been undertaken. The assessment included the identification of relevant climate change trends, their potential impacts, and existing design and mitigation measures. The estimated emissions are considered reasonable, while the project will produce over 25,000 tonnes of CO2e emissions per year, this will be limited to a construction period of three and a half years. Operation will see the project switch to low-carbon public transport, which should have a positive impact by avoiding GHG emissions.

Physical climate change risks relevant to the project have been identified and it was confirmed in the review that relevant adaptation measures are integrated into the project design process.

12. Decision

Various actions have been agreed between the project promoter, the operator and the parties involved in the financing, which are necessary to ensure the continued alignment of the project with international standards. Following agreement on these commitments, it was concluded that the project should adhere to relevant international standards throughout the project cycle. UKEF has therefore decided to support the supply of goods and services by UK exporters to the project.

A condition of the support is that the project will be subject to monitoring and reporting to ensure that the project is aligned with relevant international standards throughout the duration of the support.

UK export finance

March 23, 2022