Top Turkish banks leery of Erdogan鈥檚 鈥榗razy鈥 canal
Print Edition
Some of Turkey鈥檚 biggest banks are reluctant to finance President Tayyip Erdogan鈥檚 planned Istanbul canal due to environmental concerns and the investment risks hanging over the massive construction project.
Two of four sources from top banks said a global sustainability pact that six of Turkey鈥檚 top banks have signed was a barrier to funding the Kanal Istanbul, which Erdogan dubbed his 鈥渃razy project鈥 when he floated it a decade ago.
The government expects to break ground in June on the canal, which would connect the Black Sea to the north with the Marmara Sea to the south, running 45 kilometers through marshland, farms and towns on the western edge of the city.
Erdogan says the canal would protect the Bosphorus Strait, which runs through the heart of Istanbul, by diverting traffic.
Yet Istanbul鈥檚 mayor, engineers and, according to one poll, most citizens, oppose the project on environmental grounds, saying it would destroy a marine ecosystem and resources that supply almost a third of the city鈥檚 fresh water.
Russia, meanwhile, has signaled unease about the project on security grounds as the canal would open a second passage to the Black Sea, home to a Russian naval fleet.
鈥淚 don鈥檛 think we can take part in the funding of Kanal Istanbul,鈥 said a senior banker who requested anonymity. 鈥淚t may trigger some environmental issues.鈥
Six Turkish banks, including Garanti Bank, Is Bank and Yapi Kredi, have signed the UN-backed Principles for Responsible Banking framework which calls on signatories to avoid harming people and the planet.
鈥淒efinitely we don鈥檛 want to give a loan to this kind of project because of the environmental issues,鈥 a second senior banker said, adding that signatory banks must abide by the UN-backed sustainability pact.
In 2019, the canal鈥檚 price tag was estimated at 75 million lira 鈥 or US$13 billion 鈥 in a government report.
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