The British government has announced a loan to Turkey for a high-speed railway line.
The United Kingdom’s Export Finance department will loan Turkey $2.33 billion to build the 503 kilometers (312 miles) of high-speed electric railway connecting the capital Ankara to the coastal city Izmir. The loan, meant to reduce carbon emissions, is structured by the British financial services firm Standard Chartered and the Swiss bank Credit Suisse, UK Export Finance said in a press release.
Why it matters: The loan is the latest example of strengthening economic cooperation between Turkey and the UK. Turkey is the UK’s second-biggest export market, and the two countries signed a free trade agreement last December. Both countries’ tensions with the European Union have made them somewhat natural allies, Amberin Zaman wrote for Al-Monitor.
The EU sanctioned Turkey last year due to its offshore drilling activities in waters claimed by Greece and Cyprus. The EU is also critical of Turkey’s poor human rights record. The UK’s relationship with the EU, meanwhile, has been strained by Brexit.
Cooperation with Turkey has faced some criticism in Europe, including a boycott campaign in the UK.
Turkey has a mixed record on renewable energy. The environmental watchdog Ember reported that Turkey’s use of wind and solar power increased in 2021, but coal usage remains relatively high.
What’s next: The contracts for the construction of the railway will be awarded to British and Turkish businesses.
A UK Export Finance spokesman told Al-Monitor that the railway is expected to be completed by 2025.
This article was updated to include comments from the UK Export Finance office.