İmamoğlu says Turkish state banks have blocked loans to Istanbul post-election

Ekrem İmamoğlu, an opposition candidate elected this past summer as mayor of Istanbul, has said that state banks are refusing to extend loans to the municipality. İmamoğlu said the city was in need of some $3.5 billion, more than half of it for stalled metro projects.

Istanbul Mayor Ekrem İmamoğlu addresses reporters during a press meeting on Nov 24.

Duvar English

Istanbul Mayor Ekrem İmamoğlu has said Turkey’s state banks stopped making routine loans to the city after a June election in which he pulled off a victory over former Prime Minister Binali Yıldırım, the candidate of the ruling Justice and Development Party (AKP). The mayor says the city has now been forced to borrow from abroad.

İmamoğlu, of the main opposition Republican People’s Party (CHP), told reporters on Nov. 24 that Turkey’s largest city needs more than 20 billion lira ($3.50 billion) in financing, more than half of it for stalled metro projects.

İmamoğlu, back in Istanbul after a fundraising tour of European capitals, said all municipal transactions and salary payments were made through state banks.

The city will increasingly lean on foreign lenders and private Turkish banks, he said.

“State banks are not even extending routine loans after the elections to Istanbul municipality. The doors of the state banks are closed to us,” İmamoğlu said of the city of around 16 million.

“I condemn the managers of these banks who show this kind of attitude towards the municipality. I have been patient for the past five months,” he added.

In a June re-run poll, İmamoglu’s decisive victory ended years of rule in Istanbul by the AKP.

İmamoğlu, seen by some as an eventual presidential contender for the CHP, has visited Paris, Berlin and London this month in part to seek financing for underground rail projects that have been stalled for two years.

He secured a 86-million-euro loan deal from the French Development Agency, and a 110-million-euro loan from Deutsche Bank that he announced on Nov. 24.

İmamoğlu said Istanbul had 28 billion lira of debt and needed permits from Turkey’s Treasury to issue municipal bonds.

“It would not be right for them not to give permissions,” he said.

The CHP also defeated the incumbent AKP earlier this year in the capital Ankara.

Its new mayor, Mansur Yavaş, said last week the central government had “disregarded” a previous deal over metro costs and also cut the city’s shares by 5 percent, leaving Ankara “under a serious financial burden.”