Home Construction World Bank offers $350m loan to improve Turkey’s rail connectivity and logistics

World Bank offers $350m loan to improve Turkey’s rail connectivity and logistics

The World Bank has agreed to provide $350m financing for the improvement of rail connectivity and logistics in Turkey. The financing will be provided for the Turkey Rail Logistics Improvement Project. In addition to reducing transport costs in selected rail freight corridors, the project will be undertaken to strengthen institutional capacity of the Ministry of Transport and Infrastructure (MoTI) in Turkey.

By strengthening MoTI, the project will enable the delivery of rail freight connectivity and manage rail-enabled logistics centres.

Through the project, last-mile rail and multimodal connectivity infrastructure will be delivered to prioritized nodes of Turkey’s national railway network.

The initiatives will help to revitalize the transport and logistics sector and can encourage cargo owners to sustainably operate supply chains in the project’s corridors in the aftermath of the Covid-19 pandemic.

To be implemented by Turkey’s MoTI, the project has three components. The first component incudes construction of railway branch lines and multimodal connections at priority network nodes, including Filyos Port, Çukurova Region Industrial Zones, Iskenderun Bay Maritime Ports, with additional priority sites to be selected during implementation.

The second component includes feasibility studies, detailed engineering designs, environmental and social documentation and construction supervision for rail last-mile connectivity infrastructure at additional freight nodes.

The third component will focus on Phase 2 COVID-19 response support, institutional strengthening, capacity building and project implementation support.   

World Bank Turkey country director Auguste Kouame said: “Despite having economic geography and commodity specialization characteristics that are in-principle favorable to the use of rail freight, rail accounts for only 4% of Turkey’s transported tonnage, leaving a large share of freight to be moved by road.

“This leaves significant economic value on the table in terms of avoidable logistics costs and environmental externalities. The project’s investments will contribute towards more fully realizing rail freight’s potential in Turkey.”

The Turkey Rail Logistics Improvement Project aligns with its Country Partnership Framework (CPF), which focuses on the objectives of growth, inclusion and sustainability.

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