World Bank Board Approves $660 million Financing for Rail Connectivity in Türkiye

• World Bank Board Approves $660 million financing for rail connectivity in Türkiye

• World Bank’s financing for modernizing and expanding rail connectivity will make Türkiye logistics hub of Eurasia says Humberto Lopez, World Bank Country Director for Türkiye.

• Railway Project is a key part of Trans-Caspian International Transport Route linking China, Central Asia, the South Caucasus, Türkiye, and the European Union through rail and sea

Washington: The World Bank Board today approved $660 million in financing to support Türkiye’s efforts to expand electric rail transportation that will help improve the efficient movement of goods across the country, boost exports, create jobs and reduce greenhouse gas (GHG) emissions.

The Eastern Türkiye Middle Corridor Railway Development Project will help expand and modernize one of the oldest and outdated sections of Türkiye’s existing limited rail network. It will replace diesel-powered trains and expand connectivity between Divriği, in Sivas province, and Kars (near the border with Georgia) in the country’s northeast via a 660-kilometer, fully electrified and modern railway line. It will span four provinces and provide a significant boost to the well-being of nearly 600,000 people living along the train route as well as local firms and farms. 

The Divriği-Kars-Georgia border section is also a key element of the Trans-Caspian International Transport Route linking China, Central Asia, the South Caucasus, Türkiye, and the European Union through rail and sea. Once completed, the project will increase rail freight capacity from about 750,000 tons to 20 million tons per year, eliminating a major bottleneck in the Trans-Caspian Middle Corridor.

“By modernizing and expanding rail connectivity, Türkiye can make progress towards several strategic goals, including boosting local economies and creating jobs in underserved areas, contributing to the country’s objective of becoming a logistics hub and decarbonizing the transport sector,” said Humberto Lopez, World Bank Country Director for Türkiye.

Türkiye currently relies heavily on its road freight transport system as a facilitator of economic growth, with about 95% of goods transported by road. This project will reduce travel times and logistics costs and improve connectivity between western and eastern Türkiye.

Freight transport by road is also responsible for as much as 50% of GHG emissions from the transport sector. Decarbonizing freight transport is, thus, crucial for decarbonizing Türkiye’s economy and reducing emissions of Turkish industry, particularly its exporters if they are to remain competitive in global trade. Reducing the carbon footprint of Turkish exporters is particularly vital as the European Union (EU) begins imposing tariffs on carbon-intensive products from 2026.

 The EU market accounts for 40% of Turkish exports. It is estimated that in 2030, when the project is fully implemented, it will result in the avoidance of 72,332 tons of carbon, with the annual volume of avoided emissions growing to 245,835 tons by 2060.

The enhanced connectivity, for passengers and freight, is expected to bring considerable socio-economic benefits in the four host provinces – Sivas, Erzincan, Erzurum, and Kars – which lag national averages on economic well-being, including GDP per capita. The provinces are also highly exposed to extreme weather events, underscoring the need for resilient infrastructure that can withstand the impact of floods, landslides and wildfires.

 “By improving climate-resilient connectivity to economically-lagging regions, the project has the potential to significantly benefit women, youth and vulnerable communities by creating jobs and providing improved access to markets,” said Murad Gurmeric, one of the World Bank Project Team Leaders.

The World Bank is working with other development partners to support expansion of the Middle Corridor in Türkiye. Additional financing for the Eastern Türkiye Middle Corridor Railway Development Project is being provided by the Islamic Development Bank and Asian Infrastructure Investment Bank, to supplement sizable financing from the Government of Türkiye.

 Türkiye, in line with her geographical location between continents and regions, supports the development of regional transportation projects.

Trans-Caspian East-West-Middle Corridor Initiative shortly named as “The Middle Corridor”, which begins in Türkiye and passes through the Caucasus region via Georgia, Azerbaijan, crosses the Caspian Sea, traverses Central Asia and reaches China, is one of the most important component of the efforts to revive the ancient Silk Road.

The corridor passes by rail and road respectively through Georgia, Azerbaijan and Caspian Sea, (crossing the Caspian transit corridor) and reaches China by following Turkmenistan-Uzbekistan-Kyrgyzstan or Kazakhstan route. On this route, ports of Baku/Alat (in Azerbaijan), Aktau/Kuryk (in Kazakhstan) and Turkmenbashi (in Turkmenistan) are the main points of multimodal transport on Caspian transit corridor. Moreover, the Middle Corridor gets attraction of the regional countries, especially the landlocked ones.