Privatization plan just around the corner
The municipal authorities of Istanbul want to proceed with privatizations and financing agreements with banks in order to raise billions of dollars of funds, which will be channeled into the needs of the city. For this reason, the privatization of the Igdas company, which manages the city’s gas network, is underway, while there are also thoughts of selling a significant percentage of the Ispark municipal parking lots, according to Bloomberg.
The information said that the value of Igdas could even reach 10 billion dollars. The authorities intend to gradually reduce their stake in the company from 90% today to less than 20%, according to the head of financial services of the Istanbul municipality, Neslihan Vural, who spoke to the international news agency. She said that the initial public offering of Igdas has already started to be implemented.
In addition to Igdas and Ispark, other possible stake sales may be in water bottling company Hamidiye and bread maker Halk Ekmek, according to the same Bloomberg sources.
In addition, the mayor’s office plans to raise $1.1 billion in capital this year from money markets, commercial banks and the European Bank for Reconstruction and Development (EBRD). It is also planned to issue green bonds, from which Istanbul wants to raise funds of 225 million dollars for its needs.
Strengthening infrastructure
The issue is also political. Now that Turkey’s opposition has a majority in Istanbul’s city council, local government officials see an opportunity to advance fundraising plans to bolster the city’s infrastructure and make the opposition even more popular there. The financing of Turkey’s big cities had become an issue in March’s municipal elections.
The head of the opposition CHP party, Uzgur Özel, had accused President Tayyip Erdogan of not allocating enough funds to some major cities as punishment for not getting a majority of the vote there. However, the government in Ankara denies this accusation.
