EBRD provides tailwind for Turkey’s sea freight sector

EBRD Press Release
23 Dec 2014

Logistics operator Alternative to buy vessels with Bank’s loan

The European Bank for Reconstruction and Development (EBRD) is boosting Turkey’s maritime logistics sector with a €63 million loan to Alternative Tasimacilik (Alternative) for the acquisition of three ships it has so far been operating on a charter basis.

Alternative is a fast-growing local sea transportation firm and operates three roll-on/roll-off (ro-ro) cargo ships on long-distance Mediterranean routes linking Istanbul with the north-eastern Italian port city of Trieste. The ships, each with a capacity of 240 trailers, carry wheeled cargo such as cars, trucks, trailers or railroad cars that are driven on and off the vessel.

As part of an innovative two-stage financing model, Alternative has been chartering its ships for two years. As the route proved successful the company now intends to acquire the three vessels. With the EBRD’s help Alternative has secured the necessary long-term financing to buy the ships.

The Bank’s €63 million investment comes under an A/B loan structure where the A-loan of €55.5 million is for the Bank’s own account and the B-loan portion of €7.5 million is syndicated to Cordiant Capital Inc, a Montreal-based infrastructure fund manager specialising in emerging markets.

Sue Barrett, EBRD Director for Transport, said: “We see strong growth potential for Turkey’s logistics sector which currently represents 12 per cent of Turkey’s GDP. With its geographical position and the second largest fleet in Europe, Turkey serves as a logistics hub connecting Europe to Asia and the Middle East. Our investment in Alternative is a vote of confidence in this fast-growing operator and the sector.”

85 per cent of Turkey’s international trade is seaborne and is growing at a rapid pace, creating an ever-larger need for reliable logistics services. The size of the industry has tripled in the last 10 years and the growth potential for logistics companies like Alternative is significant.

Alternative was established in 2012 by Ahmet Musul, the founder and majority shareholder of Ekol Lojistik, one of the country’s leading third-party logistics providers, with over 25 years of experience and numerous locations in Turkey and nine European countries. Building on the know-how of its sister company, Alternative gained a market share of as much as 18 per cent in its first year of operations.

With its own vessels, greater efficiency and increased profits, the company will aim to further expand its client base and service area. In addition, it is planning to launch – new Mediterranean routes and add two more ro-ro ships to its fleet.

The founder and chairman of Alternative, Ahmet Musul, said: “Since the establishment of Alternative two years ago, we worked hard and did a very good job in terms of developing not only our company, but also the Turkish logistics market. With this support coming from EBRD, I believe we will carry this success to far beyond. As we increase our capabilities with the collaboration with EBRD, we are sure we will do more, and we hope to join forces for upcoming projects in the near future.”

Michael Davey, the EBRD Director for Turkey, added: “This project will boost a growing industry, vital for Turkish international trade, and will foster ties between Turkey and EU countries, supporting growth in the wider region. Mobilising long-term finance for such projects is one of the priorities for the EBRD in Turkey.”

The Bank started investing in the country in 2009 and currently operates from offices in Istanbul, Ankara and Gaziantep.

To date, the EBRD has invested almost €4.5 billion in the country in more than 130 projects in infrastructure, energy, agribusiness, industry and finance. In just five years the EBRD’s portfolio in Turkey has become one of the largest among the countries where the Bank invests.