Turkish Banks Hesitant About Erdogan's 'Crazy Project'

Some major banks in Turkey are wary of financing the construction of the 'Istanbul Canal' due to environmental concerns and investment risks, reports Reuters, citing four senior bankers.

Two of the sources stated that the global pact on sustainable development has become an obstacle for the financing of Kanal Istanbul. The government plans to begin construction of the canal in June, which will connect the Black Sea to the Sea of Marmara, stretching 45 km in length. Erdogan claims that the canal will protect the Bosphorus strait.

However, the Mayor of Istanbul, engineers, and according to a survey, the majority of citizens are opposed to the project due to ecological considerations. Six Turkish banks, including Garanti Bank, Is Bank, and Yapi Kredi, have signed the UN-backed principles for responsible banking, which urge signatories to avoid causing harm to people and the planet.

In 2019, the cost of the canal was estimated at 75 billion lira or 13 billion dollars. The refusal of some Turkish lenders to finance the project increases the likelihood that state and foreign funding will play a significant role in realizing Erdogan's dream.