The project sponsor is Metropolitan Municipality of Istanbul, serving a population of nearly 15 million inhabitants. Istanbul is the largest metropolitan municipality in Turkey. It hosts nearly 20% of the national population and has a diversified economic base. MMI plays a vital role in Turkey''s economic and social life, producing about 27% of the national GDP and collecting around 40% of national taxes. MMI has majority stakes in 24 companies and 2 affiliates that provide public services to Istanbul residents, ranging from water and sewer to public transport, from public housing to bread making.

MMI''s credit rating has been upgraded to Baa3 by Moody’s in May 2013, following the upgrade of the sovereign rating for Turkey to investment grade. Credit rating agencies unanimously recognize MMI''s strong operating performance, manageable debt profile, robust revenue growth and large asset base. MMI derives most of its revenues from the share of national taxes collected within its metropolitan area (~80%). Operating margins have averaged 56% since 2009 and are projected by rating agencies to remain above 50% over the next 3 years. Capital expenditures represent the bulk of Istanbul’s budget and are primarily associated with the large investments needed to modernize the City’s public transportation system.

The mayor, Mr. Kadir Topbas, was reelected for his third term in office in March 2014.

The construction of the 5.3 km Kabatas-Mecidiyekoy metro line including three stations, along with electromechanical works, is estimated to cost EUR 369 million. The proposed IFC investment is a EUR 110 million long-term loan, comprised of an A loan of approximately EUR 60 million and B Loan of approximately EUR 50 million.

65.49 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	65.49
Equity

* These investment figures are indicative

The Project will serve the metropolitan area of Istanbul, the largest city in Turkey.

The Project constitutes an integral part of MMI''s transportation master plan with the main goal of improving urban mobility and connectivity through an integrated, efficient and environmentally-friendly public transportation system that aims to eventually shift, from the current 13%, up to 48% of the total daily trips to rail transit by 2019. A more efficient public transportation will reduce travel times and contribute in the long run to higher productivity and economic growth in Istanbul. By alleviating congestion on the urban road network, the Project is also expected to lead to a significant reduction in CO2 emissions.

Between 2015 and 2019, MMI plans to invest approx. US$ 7.5 billion to build additional 288 km of rail network. Fiscal space at national and subnational levels in Turkey is limited, while long term financing is scarce in the local market. IFC would help MMI to raise the necessary long-term financing needed to complete its investment program, while sharing its global expertise to ensure that the project is implemented in accordance with the highest technical and E&S standards.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
Organizational capacity and Management Programs(%)	Organizational capacity and Management Programs(%)		Not Available	Not Available	Not Available
Stakeholder Engagement(%)	Stakeholder Engagement(%)		Not Available	Not Available	Not Available
Compensation and resettlement(%)	Compensation and resettlement(%)		Not Available	Not Available	Not Available

The project has been classified as Category B as it involves business activities with potential limited adverse environmental or social risks and/or impacts that are few in number, generally site specific, largely reversible, and readily addressed through mitigation measures.

The key E&S issue associated with the proposed project is stakeholder engagement and the capacity of MMI, its metro line operating subsidiary Istanbul Ulasim and construction contractor Alarko to manage Environmental, Health & Safety and Social (EHSS) matters associated with tunneling and station construction. Additional issues include labor and working conditions, especially occupational health and safety and contractor management, emergency preparedness and response, and community safety.

Please refer to the related Environmental and Social Review Summary (ESRS) document for this project.

Please refer to the Environmental and Social Action Plan (ESAP) tab in the related Environmental and Social Review Summary (ESRS) document for this project.