SACE Guarantees €400 Million for STAR Project

SACE, which is an Italian export credit agency, guarantee on a € 400 million line of credit as part of Socar Turkey Aegean Refinery construction project.

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SACE has joined in a mission of Prime Minister Matteo Renzi to Turkey, promoted by his office and the Ministry for Economic Development, to strength the potential for trade with this key market for Italy.

During the mission, SACE is announcing finalization of a guarantee on a € 400 million line of credit earmarked to finance contracts awarded to 50 Italian firms, including SAIPEM, as part of Project STAR (Socar Turkey Aegean Refinery).

The project, worth a total of 4.4 billion dollars, concerns the construction in project finance of a greenfield refinery at Aliaga near Izmir.

The facility will be of strategic importance for the country because, with its output of 200,000 barrels/day, it will reduce the country’s dependence on imported refined products.

SACE is making a € 2.1 billion line of guarantees available to Italian businesses operating or intending to operate in Turkey that will enable them to:

  • access loans guaranteed by SACE to support their development plans in the country (investments in distribution networks, industrial joint ventures, acquisitions of local companies, advertising expenses, retail outlets, machinery purchases, etc.)
  • sell goods and services by offering Turkish customers extended payment terms of up to five years, through the use of letters of credit, and ensuring them against default risk
  • collect payments from Turkish customers in advance, insuring them against insolvency risk.

SACE already has pre-commitments with the principal banking groups in the country: Turkiye Is Bankasi AS, Turkiye Garanti Bankasi AS, Turkiye Cumhuriyeti Ziraat Bankasi, Akbank TAS, Yapi ve Kredi Bankasi, Turkiye Halk Bankasi TAO, Turkiye Vakiflar Bankasi TAO, Denizbank AS.

One of the emerging favored markets for Italian exports with over € 13 billion in goods sold in 2013, Turkey has the third largest exposure in the SACE portfolio, with € 1.3 billion in transactions insured and € 1.5 billion in new projects currently under consideration, focused primarily on construction and infrastructure, steel and industrial equipment.

Turkey is one of the emerging countries SACE has indicated as high-potential markets, with sustainable risk profiles, to which Italian exporters should strengthen their positioning in the medium-long term to capture additional potential of € 38.5 billion in the next two years*, € 4 billion of it provided by Turkey.

A glance at SACE operations

In Turkey, where it has a representation office in Istanbul, SACE is intensely active alongside companies in various areas of industrial technology, with interesting activity on the part of SMEs.

The transactions currently on the table include project finance in both the private and public sectors, loans to banks and leasing companies, and a growing number of export credit transactions in favor of SMEs.

The supplier credit transactions, dedicated primarily to smaller companies, have been the most numerous in 2014, a year in which SACE has approved € 340 million in new transactions.