The growth market of Turkey: KfW IPEX-Bank is financing the export of German equipment for steel manufacturer Kardemir

• ECA-covered loan for around EUR 140 million with a term of 12 years
• Largest order in German exporter Schuler's company history; further deliveries from Italy
• Indirect support to expand the Turkish infrastructure
• Follow-up financing as part of a large modernisation and expansion programme

KfW IPEX-Bank is financing the export of an ultra-modern production line for the manufacture of train wheels in Turkey. The borrower is Turkish company Kardemir Karabük Demir Çelik Sanayi ve Ticaret A.Ş. (Kardemir), the first integrated Iron and Steel plant which was established in 1937 and the only rail manufacturer in Turkey and also in the region. The plant exporter is the traditional German press manufacturer Schuler from Göppingen, which is posting the largest individual order in its company history with a volume of more than EUR 90 million. “The Turkish economy is growing, and along with it, the country's role as a logistics hub between Europe, Asia and the Middle East. German and other European suppliers, which can provide direct or indirect support in the infrastructure sector, are presented with fantastic sales opportunities here – business that we are happy to assist with as a financing partner with country-related expertise,” explains Markus Scheer, Member of the Management Board of KfW IPEX-Bank, at the contract signing ceremony.

In total, KfW IPEX-Bank is providing Kardemir with a loan for around EUR 140 million. The financing encompasses a term of 12 years and cover from both the German company Euler Hermes and Italy's SACE. After all, in addition to the train wheel production line and auxiliary plants supplied by Schuler, Kardemir is also using the funds to finance the purchase of a complete bar and wire rod mill, exportet from Italy.

The deliveries are key components of the ambitious modernisation and expansion programme, which Kardemir would like to use to boost its annual production capacity from 1.1 Mt to 3.3 Mt and to strengthen its rail division. Kardemir is already producing rails and points for high-speed rail tracks, which the Turkish state is currently very keen to expand. According to information provided by the government, Turkey's entire rail network should be doubled by 2023, stretching across a length of 25,000 kilometres.

Kardemir is an important customer in the steel segment for KfW IPEX-Bank. Indeed, back in April 2013, KfW IPEX-Bank financed a basic oxygen furnace for the factory's eco-friendly exhaust gas purification plant as part of the modernisation and expansion programme.

About KfW IPEX-Bank
Within the KfW Group, KfW IPEX-Bank is responsible for international project and export finance. Its function of providing financing to boost the German and European economy is derived from the legal mandate assigned to KfW. It offers medium- and long-term financing to support key export industries, to develop economic and social infrastructure and to fund environmental and climate protection projects. KfW IPEX-Bank operates as a legally independent group subsidiary and plays a major role in fulfilling KfW's promotional mission. It is represented in the most important economic and financial centres across the globe.