Public Private Partnership (PPP) Projects in Turkey

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Erin Houston
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1 Public Private Partnership (PPP) Projects in Turkey Murat OZDEMIR Country Advisor - Canada Investment Support and Promotion Agency of Turkey (ISPAT) Montreal - June 4th, 2014

2 Agenda VISION 2023 PPP IN TURKEY IMPLEMENTATION STATISTICS CURRENT PORTFOLIO SELECTED ONGOING PROJECTS SELECTED PIPELINE PROJECTS

3 Turkey: Vision 2023

4 Public Private Partnership (PPP) Projects

5 Cumulative Value and Number of PPP Contracts ( ) $100,000,000,000 $75,000,000,000 $50,000,000,000 $25,000,000,000 As the end of 2013, total value of 180 PPP implementations is about $100 Billion Estimated cost of PPP projects pipeline : $86 Billion* $ %62 of implementations amounting 91% of total contract value are in Source : Ministry of Development was the peak year, 29 implementations with a contract value over $56 Billion

6 PPP Models Implemented in Turkey Built-Operate-Transfer (BOT) Built-Operate (BO) Built-Rent-Transfer (BRT) Transfer of Operational Rights (TOR) Number of implementations vs. Contract Value (end of 2013) BO 3% BO 4% TOR 37% TOR 24% BOT 54% BRT 7% BOT 65% BRT 6% Source : Ministry of Development

7 Transportation projects lead with 69.8 Billion USD (70%) Source : Ministry of Development

Ongoing PPP Implementations - Selected Projects Istanbul-Izmit-Izmir Motorway BOT

Construction started in 2010 3rd Bridge on Bosphorus BOT project, 10 years 2 months

Tender completed in May 2012, construction started in May 2013 Eurasia Car Tunnel BOT

8 Ongoing PPP Implementations - Selected Projects Istanbul-Izmit-Izmir Motorway BOT project, 22 years 4 months (construction + operation) 421 km including Izmit Bay crossing Construction started in rd Bridge on Bosphorus BOT project, 10 years 2 months (construction + operation) 299 km motorway, 115 km access roads (partially tendered) Tender completed in May 2012, construction started in May 2013 Eurasia Car Tunnel BOT project, 26 years (construction + operation) 14.6 km route, 5.4 km twin deck tunnel Construction started in 2011

3rd Airport in Istanbul (CAPEX ~10 Billion USD) Northwestern part of Istanbul 4 phases, 1st phase to be completed by 2016 BOT Model, 25 yrs of operation Passenger and traffic guarantees to be

9 3rd Airport in Istanbul (CAPEX ~10 Billion USD) Northwestern part of Istanbul 4 phases, 1st phase to be completed by 2016 BOT Model, 25 yrs of operation Passenger and traffic guarantees to be provided for 12 yrs (342 mln pax) Connection to North Marmara highway and 3rd bridge Ultimately 150 mln pax/yr (world largest airport with 6 runways) Tender completed in May 2013, 22.2 Billion Euros for 25 years

10 PPP Project Pipeline - Selected Projects Motorways High Speed Rail Health Campuses Channel Istanbul Container Terminals, Ports, Marinas

11 Estimated Value of Projects Announced by the Government* Area Cost (USD bn) PPP (USD bn) Transportation Highways Railways 64 1 Air Transport Sea Transport 34 6 Urban Development Urban Regeneration Istanbul Finance Centre 5 0 Other Health Campuses Canal Istanbul *As of May 2013

12 Motorway Network and PPP Projects 5,500 kms of new motorways, ring roads, and bridges 3 under construction and 14 new PPP projects

High Speed Rail Network High speed rail network to reach 10,000 km by 2023 13 new projects of 4,955 km

13 High Speed Rail Network High speed rail network to reach 10,000 km by new projects of 4,955 km have been announced completed under construction (completed before 2015) planned (completed after 2015)

Black Sea to Marmara by 2023 45-50 km long, 150 m wide, and 25 m

14 Canal Istanbul (CAPEX ~30 Billion USD) Man-made waterway planned to be built on the outskirts of the European side of the city Connect Black Sea to Marmara by km long, 150 m wide, and 25 m deep Urban developments Ongoing preliminary studies for two years BOT model

Filyos and Çandarlı Port Projects Filyos Port will be located in the Black Sea region and will facilitate exports of steel, will have 25 million metric tonnes/year throughput

For the port and industrial region in the surrounding area 6 million cubic meters were re-zoned for use.

15 Filyos and Çandarlı Port Projects Filyos Port will be located in the Black Sea region and will facilitate exports of steel, will have 25 million metric tonnes/year throughput capacity by Development plans for the port were completed in Siteworks tender in For the port and industrial region in the surrounding area 6 million cubic meters were re-zoned for use. BOT model (CapEx~640 M Euros) Located in the Aegean Coast, Gulf of Candarli in İzmir Hub for connecting MED trade lines to Black Sea countries Çandarlı port will have a capacity of 12 million TEU in three phases. To become the biggest port of Turkey and 10th the world when its construction ends. BOT Model (CapEx~950 M Euros)

years of construction + 25 years of operation An annual rent will be paid to the

16 Integrated Health Campuses (~11 Billion USD) 38 projects, 45,000 beds 4 under construction, 9 on contract phase, 3 on final bidding, 1 on bidding phase 2-3 years of construction + 25 years of operation An annual rent will be paid to the operators A web portal for all tendering processes by the Ministry of Health

17 Other Relevant Projects

560,000 sqm of office space 90,000 sqm of shopping area 70,000 sqm of hotel 60,000 sqm of residence 2,000 seat conference centre

18 Istanbul Finance Center - Ongoing Construction Projects Total construction area of 2,500,000 sqm; expected cost of 1.7 billion USD 6 km of subway construction New property development mainly in Non-CBD Asian side of Istanbul (aka Atasehir) 560,000 sqm of office space 90,000 sqm of shopping area 70,000 sqm of hotel 60,000 sqm of residence 2,000 seat conference centre Current property owners Ziraat Bankasi, Halkbank, Vakifbank Capital Markets Board of Turkey Banking Regulation and Supervision Agency Private companies

19 Source : EMRA Feed-in-Tariff Program for Renewables

20 Conclusion Upper middle income country, high economic growth & domestic demand growth will continue in the foreseeable future (2023 targets and fiscal prudence) Investment in long-term stability & additional growth The demand for infrastructure and related services is strong in Turkey Extensive pipeline of projects, Government aims to utilize PPP models for increasing number of projects with steady cash flows PPP provides additional investment and enhance management of operations and risk

21 Thank You... Q&A ISPAT Coordinates

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