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Thursday, 20 September 2018

MARSH AND ATI ARRANGE INNOVATIVE BANK SURETY SOLUTION FOR TANZANIAN HIGH-SPEED RAIL PROJECT


Dar es Salaam, 20th September, 2018 – Marsh, a global leader in insurance broking and risk management solutions, has provided a US$95 million innovative bank surety solution to Yapı Merkezi Construction and Industry Inc. (Yapı Merkezi), to support the construction of a new high-speed electric railway line in Tanzania.

The solution was structured in collaboration with the African Trade Insurance Agency (ATI), a multilateral pan-African investment insurer, and is backed by ATI’s treaty reinsurers (led by Munich Re) and a consortium of facultative reinsurers Trust Re (lead facultative reinsurer), BarentsRe, AfricaRe, and ZepRe.

Yapı Merkezi was awarded the contract to design and build the new US$1.25 billion, 300km (including 95km sidings/passing loops), high-speed electric railway line by Tanzanian state-run railway firm RAHCO: Reli Assets Holding Company (currently TRC: Tanzania Railways Corporation).

The line from Dar es Salaam to Morogoro will replace the century-old track and will have the capacity to transport 17 million tonnes of cargo each year.

To help enable Yapı Merkezi to comply with project requirements to use local Tanzanian banks, Marsh’s Global Bank Surety Syndication team, headed by Manuel López, structured an innovative solution that guarantees Yapı Merkezi’s contractual performance-related obligations and the repayment of advance payments.

“Collaborating with Marsh enables us to keep focused on one of our main priorities: to pave the way for increased investments into ATI’s African member countries. Frequently these inroads can only be made with innovative solutions, which this project embodies. ATI has mobilized investments well in excess of US$1 billion into Tanzania in recent years. Marsh was instrumental in helping us close this deal, thus supporting additional investments into the country and ultimately delivering critical new infrastructure to the people of Tanzania,” said Tusekile Kibonde, the resident Underwriter.

This insurance structure has allowed Yapı Merkezi, as the ultimate corporate beneficiary, to free up domestic Turkish banking lines and more optimally deploy its credit lines, which in turn allows the firm to take on more project risks. Additionally, this insurance structure allows local banks in African countries to take on more risk than their risk tolerance might otherwise permit.

In this instance, ATI supported CRDB Bank Plc and NMB Bank Plc, two top-tier Tanzanian banks, to issue guarantees for this infrastructure project.

“We are proud to have led the reinsurance panel for such a strategic project, working with Marsh and the African Trade Insurance Agency, both of whom share our mission to be innovative in providing solutions for clients”, said Domenico Esposito, Head of Surety Underwriting, Trust Re. “In countries where public and private sector investment in construction and engineering projects is thriving, we see substantial opportunities for contractors to benefit from surety solutions, as Yapı Merkezi has in this case.”

“Surety is quite new to the Turkish market and is still a developing instrument. We are delighted to support Yapı Merkezi in building a sound guarantee structure through the help of surety insurance. We hope this collaboration will help many other Turkish contractors in their future investments around the globe. Marsh Turkey is proud to be the pioneer of using a surety and bank syndication approach on behalf of a major Turkish contractor”, says Hakan Kayganacı, CEO of Marsh Turkey.

Formed in 2013, Marsh’s Global Bank Surety Syndication experts provide industry-leading bond consulting services that combine guarantee and surety capacity to corporate clients, insurers, reinsurers, and banks globally.



About Yapı Merkezi

Yapı Merkezi, founded in 1965, aims "to create and to realize construction projects that will serve humanity by creating happy environments". Yapı Merkezi realizes projects of universal dimensions and always reaches its targets with the determination to complete every project by delivering products and services on time, within budget and with the specified quality.

Yapı Merkezi Construction and Industry Inc., in its half a century history, has realized the design and construction of a wide variety of buildings, heavy construction and railway projects both in Turkey and abroad, especially in United Arab Emirates, Saudi Arabia, Sudan, Algeria, Morocco, Ethiopia, Senegal, Tanzania and Qatar.

From 1975 until today, with 3.600 km of railways and 400 stations in 51 projects, Yapı Merkezi provides safe transport for more than 3.5 million passengers daily in 3 continents.

Yapı Merkezi has been included in the “TOP 250 International Contractors List” published annually by ENR￾Engineering News Record since 1998 and was ranked 78th on 2017’s list.

In the Mass Transit / Light Rail category, Yapı Merkezi was ranked 4th largest company in 1998, 3rd in1999, 7th in 2000 and 9th in 2017.

About ATI

ATI was founded in 2001 by African countries to cover the trade and investment risks of companies doing business in Africa in order to encourage more inward investments. ATI provides Political Risk, Surety Bonds, Trade Credit Insurance and Political Violence and Terrorism & Sabotage cover. As of YE 2017, ATI had supported USD35 billion in trade and investments across Africa in sectors such as agribusiness, energy, exports, housing, infrastructure manufacturing, mining and telecommunications. Since 2008, ATI has maintained an ‘A/stable’ rating for Financial Strength and Counterparty Credit by Standard & Poor’s.

About Marsh

A global leader in insurance broking and innovative risk management solutions, Marsh’s 30,000 colleagues advise individual and commercial clients of all sizes in over 130 countries. Marsh is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), the leading global professional services firm in the areas of risk, strategy and people. With annual revenue over US$14 billion and nearly 65,000 colleagues worldwide, MMC helps clients navigate an increasingly dynamic and complex environment through four market-leading firms. In addition to Marsh, MMC is the parent company of Guy Carpenter, Mercer, and Oliver Wyman. Follow Marsh on Twitter @MarshGlobal; LinkedIn; Facebook; and YouTube, or subscribe to BRINK.



About Trust Re

Trust Re is a reinsurance company based in the Kingdom of Bahrain with branches in Malaysia and Cyprus, as well as a representative office in Morocco and a Liaison Office in India. With authorised capital of US$ 500 million and issued and paid up capital of US$ 250 million, Trust Re earned its recognition as a solid and reliable security through its long term professional commitment to the Insurance & Reinsurance Industry. It writes both life and non-life business on a Facultative & Treaty basis with a wide scope of geographical operation that includes: Africa, Asia, Russia, CIS countries and the Middle East and North Africa (MENA) Region.

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