Global private infrastructure investment in 2015 remained steady at $111.6bn when compared to the previous year, but Turkey raised the bar with the financial closure of seven projects for a record $44.7bn, absorbing 40% of global investment, the World Bank said on June 14 citing figures from the Private Participation Infrastructure (PPI) database.
A major portion of commitments in Turkey was comprised of Istanbul’s $35.6bn IGA Airport (including a $29.1bn concession fee to the government) and the $6.4bn Gebze-Izmir Motorway, the World Bank noted. The project that envisages the construction of Istanbul’s third airport is the largest ever entered into the PPI Database.
The $43.1bn in transport is Turkey’s highest ever investment, while the $1.6bn investment in energy is 80% below the five-year average of $8.0bn, the World Bank said, adding that all three energy deals were in power generation: one geothermal, one wind, and one natural gas-fired power plant.
Large infrastructure projects have been the hallmark of President Recep Tayyip Erdogan’s rule since 2002. His governments have encouraged the growth of the construction sector through public housing, highway and other infrastructure projects. The sector’s growth averaged 6.9% between 2002 and 2012. Last year, the construction sector grew by 1.7% and accounted for 5.7% of the country’s GDP. But, the ongoing political and economic problems are raising questions marks over the future of Turkey’s mega projects.
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