Istanbul mayor turns to foreign financing after state-run banks withdraw

Ekrem İmamoğlu, who became a figurehead for Turkey’s political opposition by winning an election for Istanbul mayor this year, said he plans to secure financing for municipal infrastructure projects from foreign institutions as state-run banks in Turkey are withholding lending, Bloomberg reported on Sunday.

“It’s sad that the state lenders remain distant to us since we came into office,” Bloomberg quoted İmamoğlu as saying.

During a visit to London earlier this month, the Istanbul mayor discussed with foreign investors a possible $500 million bond sale that could help fund major projects. He announced on Sunday that the municipality had secured 110 million euros ($121 million) of financing from Deutsche Bank for an underground transport project.

The Istanbul municipality has not been able to borrow from state-run banks even though they were the main source of funding under previous administrations, İmamoğlu said, according to Bloomberg. Istanbul was previously run by President Recep Tayyip Erdoğan’s Justice and Development Party (AKP).

“They haven’t even let us take out routine loans. The state banks seem to have shut the doors on us,” the Istanbul mayor said. The municipality has also secured loans for its basic day-to-day operations from Turkish and foreign private banks, he said.

Ziraat Bank and Halkbank, Turkey’s biggest state-run banks, are controlled by the country’s sovereign wealth fund, which is chaired by Erdoğan. The president’s son-in-law, Treasury and Finance Minister Berat Albayrak, is the fund’s deputy chairman.