International Project Loans

We provide financial support to foreign buyers seeking to buy Turkish goods and services with regard to the projects undertaken by Turkish contractors or vessels built by Turkish shipbuilding companies.

What is the International Project Loans?

We help Turkish contractors gain competitive advantage as well as secure access to emerging markets by offering flexible payment options to foreign buyers under the International Project Loans.

We provide:

  • Financing support to foreign buyers aiming to finance their import of Turkish goods and services with respect to the projects undertaken by Turkish contractors overseas and the ships built by Turkish shipbuilders.
  • No limits on project size and company.
  • Coverage for commercial and political risks.

What are the conditions?

  • In general, we can provide support up to 85% of the Turkish content in the contract. Turkish content consists of goods and services to be exported from Turkey.
  • Exports from third countries cannot be subject to our financing. However, we can provide support up to 100% of Turkish exports of goods and services, which will not exceed 85% of the total exports from Turkey and third countries (Export Contract Value).
  • We can determine our financing amount depending on the Turkish and third country exports together with the local costs indicated in the feasibility report.
  • Our financial support is available for the projects with payback periods longer than 2 years.
  • All countries except Armenia, South Cyprus and North Korea are covered. However, we may be limited or unable to offer financing to projects in certain countries and under certain terms. We advise you to look at the Country Limits List and the Sustainable Lending page for the countries in which we operate and the credit limits that can be assigned to these countries.
  • We evaluate the loan applications by taking into consideration the convenience of the project, the project country, the borrower and the contractor, under the guidance of Organization for Economic Co-operation and Development (OECD) “Arrangement on Officially Supported Export Credits” and our appraisal criteria. The plausible applications are submitted for the approval of Board of Directors. The decisions regarding loans amounting over USD 20 million are also submitted for the approval of the Minister whom Undersecretariat of Treasury is affiliated with.
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Who is Eligible?

International Project Loans is available for overseas contractors and shipbuilding companies established according to the Turkish Commercial Code.

We require contractors have an Overseas Contracting Certificate (permanent or temporary) issued by the Ministry of Environment and Urbanisation of the Republic of Turkey. Click here to get more information.

Who can apply?

We expect the foreign borrowers (ministries, institutions, entities or banks) to apply for the loan.

Documents required

We require the application letter to contain the requested loan amount, collaterals and information of the project to be submitted by the borrower. In addition, we request “the Contract” signed between the buyer and the contractor and the "pre-feasibility report" indicating the export of goods and services to be realized from Turkey be annexed to the application letter.

Following the loan application, we require the documents below:

  • A feasibility report prepared/approved by an independent Turkish consultant who is a member of FIDIC and registered to the Association of Turkish Consulting Engineers and Architects.
  • Statement of Affairs of the contractor
  • Other Documents

How To Do?

Follow the seven-step process from application to loan disbursement to understand how it is done:

  1. Get in touch with Turk Eximbank:

    The contractor or project buyer contacts Turk Eximbank, describing the prospective export contract and project to be financed. It would be better if the loan application is submitted before the exporter and the project buyer sign the contract.

  2. The loan application:

    The prospective borrower (ministry, institution, entity or bank) must apply for the loan. The application letter should include the information on the project, the envisaged loan amount and the collaterals. The contract signed between the contractor and the project buyer and the feasibility report indicating the Turkish goods and services exports regarding the project should be annexed to the application letter.

  3. Financing proposal:

    Turk Eximbank prepares an indicative term sheet, outlining key terms and conditions in the financing proposal.

  4. Setting the loan amount:

    Once the borrower accepts the financing proposal, Turk Eximbank determines the loan amount in accordance with the Turkish content identified in the feasibility report.

  5. The facility agreement:

    Facility agreements are drafted tailor-made to reflect the financial terms of each loan, by international legal consultants taking into consideration the effects of several legal systems on the process. This loan documentation will incorporate Turk Eximbank’s terms and conditions, as well as the terms and conditions set by the borrower/guarantor. The Agreements are signed after the negotiations among Turk Eximbank, the borrower and/or the guarantor.

  6. Disbursement:

    Progress payment certificates which are prepared by the contractor and approved by the project buyer and the borrower are delivered to Turk Eximbank simultaneously with the utilization request of the borrower. Additionally, invoices and customs declaration forms regarding the export of goods and services are presented by the contractor to Turk Eximbank. If the documents are in good order, the payment is remitted to the contractor’s bank account in Turkey while the borrower is debited.

  7. Repayment:

    Principal repayments and interest payments are realized by the Borrower under the conditions stated in the facility agreement. During the project completion period only interest payments are made within 6 monthly periods. The principal is repaid in equal semi-annual instalments throughout the life of the facility. First repayment date can utmost be 6 months after the project completion period.

How much?

Our terms of financing are determined on a case by case basis. We provide financing on commercial terms according to the OECD Arrangement on Officially Supported Export Credits.

Maturity: Maturity is determined pursuant to the nature of the project that consists of project completion and repayment periods. Project completion period is equal to the construction duration. Repayment period commences at the end of the project completion period.

Repayment terms: We provide support for the projects with payback periods longer than two years under the International Project Loans.

The maximum repayment period is often 10 years for infrastructure and superstructure projects while there may be some exceptions according to the OECD Arrangement.

Interest rate: The interest rate can be available with fixed or floating (LIBOR / EURIBOR + margin) rates. The pricing depends on the maturity and cost of funding at the time of the commitment.

Risk premium: It is mandatory to collect a risk premium which is calculated according to the current risk perception of the buyer country and the borrower due to the OECD Arrangement. The risk premium can either be paid upfront by the borrower or added to the loan amount as a result of the borrower’s choice and/or the nature of the transaction. (See Risk Premium Calculator)

Principal repayments and interest payments: Principal repayments and interest payments are realized by the borrower under the conditions stated in each facility agreement. During the project completion period, only interest payments are made within 6 monthly periods. The principal is repaid in equal semi-annual installments throughout the life of the facility. First repayment date can utmost be 6 months after the date of project completion period.

Commissions and expenses: Rates are determined on a case by case basis and paid by the borrower.

Management Fee: Paid one-off following the signing of the facility agreement.

Commitment Fee: Calculated over the unutilized portion of the loan and paid semi-annually during the availability period.

Additionally, the costs and expenses (including legal fees) in connection with the negotiation, preparation, printing and execution of the facility agreement are compensated by the borrower.

Other expenses: In case we require a site visit during the construction period of the project, the relevant costs and expenses (including the fees to be paid to the consultants) are compensated by the contractor.

Frequently Asked Questions

What is the International Project Loans?

International Project Loans aims to support to the foreign buyers seeking to buy Turkish goods and services with regard to the projects undertaken by Turkish contractors or vessels built by Turkish shipbuilding companies.

Who can be the borrower?

Public institutions, entities and or ministries authorized to borrow in the name of the state and the reputable banks (public or private) located abroad can be the borrowers under the International Project Loans.

What kind of projects will be financed?

Our financial support is available for the exports of Turkish goods and services regarding;

  • the infrastructure and superstructure projects undertaken by Turkish contractors overseas and,
  • the vessels built by Turkish shipbuilding companies.

What is the maximum amount of the loan?

We can provide support up to 85% of the Turkish content in the contract. Turkish content consists of goods and services to be exported from Turkey.

Exports from third countries cannot be subject to our financing. However, we can provide support up to 100% of Turkish exports of goods and services, which will not exceed 85% of the total exports from Turkey and third countries (Export Contract Value).

We can determine our financing amount depending on the Turkish and third country exports together with the local costs indicated in the feasibility report.

How are the country limits determined?

The limits are determined based on the OECD Country Risk Classification. Countries of operation and the limits to be assigned to these countries are determined by the Council of Ministers of the Turkish Government annually. (Please click here to get a list of Country Limits List.)

How are bank limits determined?

We determine the bank limits as a result of the analysis of the financial statements of the banks who want to the borrower. Once they meet the necessary financial qualifications, we allocate the limits to the banks and we support the projects within this limit.

How is the risk premium calculated?

The Risk Premium is calculated according to the risk situation of the borrower’s country and the borrower. The payment of the risk premium can be made as a maturity, depending on the preference of the borrower or by adding it to the amount of the loan. You can easily calculate your premium on our website.

What is the difference between letter of intent and the term sheet attached letter of intent?

Depending on the request of the contractor, the letter of intent can be issued in two different forms: with an annexed term sheet indicating the tentative financing terms or without a term sheet. Letter of intents with a term sheet have a validity of 3 months while those without term sheet are valid for 6 months.

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