Türkiye obtains €2.4B ($2.8B) in green financing for strategic Kars-Iğdır-Aralık-Dilucu railway project to link with Nakhchivan, Azerbaijan.
The deal, led by MUFG Bank with backing from Sweden’s EKN, Austria’s OeKB, and the Islamic Development Bank’s ICIEC, marks a major international collaboration.
The railway is a key part of Türkiye’s regional development strategy and aligns with its Medium-Term Program for infrastructure investment.
Türkiye has secured €2.4 billion ($2.8 billion) in green financing to fund the Kars-Iğdır-Aralık-Dilucu Railway Project, a strategic rail link connecting Türkiye to the Nakhchivan region of Azerbaijan, Treasury and Finance Minister Mehmet Şimşek announced Tuesday. The project aims to enhance regional connectivity, facilitate trade, and bolster sustainable transportation infrastructure in alignment with Türkiye’s Medium-Term Program for economic development.
The funding was arranged through a consortium of international lenders led by Japan’s MUFG Bank and was classified as green financing due to its alignment with environmental and sustainability goals. Export credit agencies from Sweden (EKN) and Austria (OeKB), along with the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), operating under the Islamic Development Bank, are providing guarantees. Several global banks and institutional investors are also participating in the financing package.
The railway will be implemented by the General Directorate of Infrastructure Investments under Türkiye’s Ministry of Transport and Infrastructure. It is expected to create a direct corridor between Türkiye and Nakhchivan, improving cross-border trade logistics and providing regional production centers with improved access to international markets.
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Minister Şimşek emphasized that the deal reflects international confidence in Türkiye’s economic roadmap. “We continue to support infrastructure investments that enhance our country’s competitiveness and productivity, while maintaining close cooperation with international institutions,” he said.
Including this project, Türkiye’s total external project-based financing for 2025 has reached approximately $6 billion, underlining sustained international engagement with the country’s infrastructure ambitions.
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